Connecting Canada, the US and Europe
What GLS' latest acquisition could mean to cross-border e-commerce aspirations
Photo courtesy of GLS
UK-based postal operator, Royal Mail further expands its international operations through its subsidiary, General Logistics Systems (GLS) with the acquisition of Canadian freight operator, Rosenau Transport, announced on Oct 8.
The acquisition of Rosenau Transport comes three years after GLS acquired Canadian parcel carrier, Dicom from private equity firm, Wind Point Partners. At the time of the 2018 acquisition, Dicom offered ground-based parcel, freight, and logistics services through a network of 28 depots and collaboration with partner carriers across Canada to provide pan-Canadian logistics services.
Rosenau Transport owns 24 facilities throughout four Western Canadian provinces, Alberta, Saskatchewan, British Columbia, and Manitoba, and offers less-than-truckload (LTL), full-truckload (FTL), flat deck/flatbed, small parcel, and warehousing services. A number of value-added services are also offered including dangerous goods shipping, same-day/hotshot service, and residential delivery.
This latest acquisition will create a network stretching across Canada which will enable GLS to cover the vast majority of the Canadian population and deliver further growth and synergies according to the press release.
But, even more important is that the acquisition of Rosenau will expand GLS’ cross-border services and connect with its operations in the US which comprises of its 2016 acquisition of regional small-parcel provider, GSO, 2017 acquisition of regional small-parcel provider Postal Express and 2019 acquisition of freight carrier, Mountain Valley Express.
Combined, the former acquisitions provide GLS with parcel and freight delivery services in California, Arizona, Nevada, New Mexico, Oregon, Washington, Idaho, and Utah.
How does this all benefit postal operator Royal Mail?
Easy.
International cross-border. Besides serving as an alternative revenue stream, GLS is able to drive parcel and freight volume in Canada and the US and work with consolidators to ship goods to the UK where the Royal Mail can handle customs clearance, if needed, and final mile delivery in the UK.
Royal Mail & GLS
Since privatizing, postal operator Royal Mail faces an increasing amount of direct competition thanks in particular to the rise in e-commerce and multichannel commerce.
However, perhaps one of its great assets is its GLS subsidiary. Headquartered in the Netherlands, GLS was acquired by the Royal Mail in 1999 and offers parcel and freight delivery services across Europe, Canada, and the US.
For the fiscal year ending March 31, parcels represented 72% of the Royal Mail Group’s revenue, up from 63% from the prior year. GLS parcel volumes increased 26% with B2C (57% of total parcel volumes) and international volumes (16% year-over-year growth) attributed to the growth.
As part of its updated strategy introduced early this year, GLS plans to “drive more international volume from non-Europe based shippers by offering dedicated services covering import, customs clearance and delivery,” according to Royal Mail Group’s annual report for the period ending March 31.
This strategic focus will not only benefit GLS but the Group as noted in the annual report, “Market developments, including the growth in international and B2C volumes will benefit both Royal Mail and GLS, and create opportunities for future potential synergies through leveraging the capabilities of both businesses.”
So, as GLS builds out its domestic presence in Canada and the US, it is creating international opportunities for Canadian and US shippers by extending their relationship with GLS beyond the US and Canadian borders.
However, it will find itself competing against a crowded competitive market including an ever-growing Amazon and Alibaba/Cainiao, third-party logistics providers (3PLs), express providers, and others.
Differentiation, speed, and customer service will set players apart.
- Cathy
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