The Business Year

CorreosExpress

SPAIN - Transport

Karim Fabrice El Kouche

CEO, Correos Express

Bio

Karim El Kouche has more than 20 years of experience spearheading growth, driving transformation, and steering operational excellence across CPG and Healthcare industries. Before joining Correos Express, he worked in listed multinationals and private equity companies, such as Linneo Health, where he was Director of Operations; Mars inc., as Finance Director Royal Canin Iberia; and British American Tobacco, as Head of Portugal, Andorra and the Canary Islands. He holds an MBA from W. P. Carey School of Business, University of Arizona, a Master’s degree in Finance from Toulouse Business School, and a BS in Electronics and Automated systems from Paul Sabatier University.

"The packaging market has experienced significant growth over the past decade, accelerating during the pandemic and continuing due to sustainability and e-commerce trends."
TBY talks to Karim Fabrice El Kouche, CEO of Correos Express, about a changing market, e-commerce in Spain, and goals for the coming year.
What have been some major milestones for the company since 2021?

The packaging market has experienced significant growth over the past decade, accelerating during the pandemic and continuing due to sustainability and e-commerce trends. The market has shifted from B2B to B2C and is now evolving toward C2C. The traditional model of a company sending a package to another company is being replaced by direct delivery to consumers; however, challenges remain as demand structures evolve. A notable trend is the rise of out-of-home delivery. Previously, deliveries were made to companies and homes; now packages are often sent to pick-up points. This trend is less developed in Spain but is expected to grow. As the market expands, there is a need for increased capacity and investment in centers due to rising volumes. Customers also demand faster deliveries, often within 24 hours, and greater technological efficiency and trackability. They want to know the status of their packages and have flexible delivery options, which technology enables. In Spain and other countries, customers increasingly expect free delivery, but rising fuel costs, inflation, and higher expenses due to the Ukrainian war create financial pressure. The solution lies in providing more value to clients, encouraging them to pay premium services while maintaining low costs. Achieving this involves scaling up operations and embracing digitalization, ensuring we remain agile and responsive in the rapidly evolving competitive landscape.

In terms of digitalization, there has been a strategic plan since 2019 to increase automation. What is new about this strategy?

Digitalization encompasses many facets. One is automation in which Correos Express has invested heavily in. Another is AI and digital improvements, which offer significant potential. We focus on three key logistic areas. First, national routes between centers. By digitalizing and optimizing these routes, we achieve faster, cheaper, and more efficient transport, maximizing capacity. This optimization has become crucial as our volumes have doubled in five years, requiring more direct and complex routing than human planning allows. Second, last miles routes are dynamic and need constant efficiency improvements which can be done through sophisticated algorithms. Better routing enhances flexibility and delivery times, adjusting dynamically to the number of deliveries that traditional methods cannot match. Third and last, Customer service benefits greatly from AI, by accelerating response times and freeing up human resources to address more intricate issues. our services evolve in tandem with technological progress, setting new benchmarks for efficiency and customer satisfaction.

What new strategies is Correos Express developing regarding sustainability, and when will your goal of being 100% carbon neutral in Spain be accomplished?

We are committed to addressing these challenges, driven by global trends and client demands. Our focus extends beyond environmental sustainability to include social responsibility and governance. We strive for equity and transparency by adhering to regulations and clear practices. Environmental responsibility is both a corporate duty and societal imperative. Our environmental impact is two-fold. First, while our centers have a limited impact, we optimize energy usage and transition to sustainable sources. The larger carbon footprint stems from transportation. To address this, we reduce consumption through optimization and transition to decarbonized electricity. Relying on external transporters poses challenges. We advocate for electric transport, but market readiness is limited. We are installing electric vehicle chargers, navigating infrastructure requirements, and working with vehicle providers to expedite supply. Challenges persist, especially in less populated areas with underdeveloped infrastructure. Given these challenges, a one-size-fits-all solution is impractical. We are exploring region-specific solutions and recognizing the current limitations of large battery-equipped trailers.

What benefits has the growth in e-commerce in Spain brought to Correos Express?

E-commerce is indeed a significant trend that is likely to persist, offering environmental and corporate benefits. According to our 2024 e-commerce survey, 70% of participants reported that online sales have increased the visibility of their brands and products. Additionally, 33% of online shoppers make purchases at least monthly. In this scenario, Correos Express stands out with its capability to deliver across all Spanish territory in under 24 hours. We grew by 8% in 2023 and continue to see growth. It’s crucial that we maintain close collaboration with our clients to ensure we fulfill customer expectations sustainably.

When choosing partners, Correos Express thoroughly checks the values of the companies and their interests. Is this a way of promoting Marca España?

Our emphasis on partnerships, many of which are long-established, and others that stem from specific agreements with Grupo Correos, is fundamental. These close collaborations are the cornerstone of our innovation and smooth operations. Our market presence and service excellence are a clear synergy with Marca España. As a public company, we take pride in this role.

What are Correos Express’ goals and objectives for 2024 and 2025?

Our goals are faster, more reliable, sustainable while profitable deliveries. We aim to achieve this through digitization, dynamic routes, and infrastructure. Increasing capacity is essential to meet market demands, and we are also focusing on sustainable transportation and packaging. Expansion is on our agenda, though it requires careful planning. We are exploring opportunities and forming strategic alliances, leveraging Correos’ strong presence in Spain and Portugal. Spain’s landscape has transformed significantly, now advancing rapidly in Europe and globally. The growing start-up ecosystem and robust market offer many advantages for international investors seeking opportunities in Spain.

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