Logistics operator InPost has revolutionised the Polish parcel delivery market with its automated parcel lockers. Now, CEO and founder Rafał Brzoska is planning rapid expansion in European markets as sustainability tops the agenda and Covid-19 increases demand for automated logistics.
InPost has transformed delivery services in Poland. How did you do it?
When I had no more room to grow my core business of unaddressed mail delivery, I decided to tackle a much bigger segment of the market: postal services. At the time, Polish Post had a monopoly, so it was difficult to break into the market. In 2006, we went public as Integer.pl in order to gather the funds we would need to break the monopoly.
Six years later, we had 35% of the market share in Poland’s letter business and had become the fastest-growing private postal operator in Europe. But by then I had already begun to understand the impact e-substitution and e-invoicing were having on the western European postal market, and I realised I had to adjust my business.
I found a way to redesign German post office [PO] boxes for e-commerce, and that’s how we got started, in 2010: we set up a small network of 100 fully automated parcel lockers in Poland. In 2016, we decided to completely withdraw from the letter business and transform the business into a pure parcel player with a network of about 2,000 machines in Poland and a small presence in the UK, Italy and France.
I took something that has been present in the market for 40 years – something as simple as a PO box – and automated it. And it grew into a best-in-class disruptor in logistics and the largest e-commerce logistics business in Poland.
Like other industries, logistics is facing calls to operate more sustainably. What have you done to your business model to improve sustainability?
For a start, we pick up about 20% of our parcels in a locker, which means we save money on the first mile. But the biggest gain comes with the last mile of delivery. On average, one driver delivers 80 to 90 parcels door to door in an eight-hour shift, generating 1.4kg of CO2 per parcel. But each of our drivers supplies 10 different lockers with 100 parcels each, which means we deliver about 1,000 packages during one driver’s eight-hour shift. So we are 10 times more efficient than a traditional door-to-door delivery, and we generate only 0.14kg of CO2 per parcel, according to studies by the University of Milan and the Polish University of Technology.
By the end of 2021, we want to convert our fleets in the 10 largest Polish cities to fully electric vehicles [EVs]. We have developed a locker terminal with an EV charger built into it, which is connected to the grid, so our customers and our drivers can then use that location to charge their electric vehicles. The EV charging infrastructure makes our terminals attractive for European cities that are trying to reduce their emissions footprint – it's a perfect fit for the EU’s net-zero emissions strategy, which is becoming a key driver for obtaining EU funds.
Has Covid-19 affected your expansion plans?
The coronavirus has boosted e-commerce, which of course provides a tailwind for logistics. And growth is even faster for us than for our competitors, because we have the automated lockers. They’re now the safest delivery method with 24/7 access for pick-up and delivery, because they’re contactless. In Poland, we are locating dozens of new parcel lockers every week and quickly increasing their number from the current 8,000. We’re going to reach 10,000 parcel lockers soon and seek to add another 5,000 in the coming years. Parcel lockers are quickly gaining popularity not only in large cities, but also in small towns and villages. We want to provide our services wherever our clients live.
We also had to invest heavily in our transport and logistics network, of course. So we have recently hired more than 1,500 new employees, and we are building 18 new warehouses.
The biggest challenge now is to replicate our Polish success in other geographies – including the UK, which is the largest e-commerce market in Europe. Our plan is to deploy 500 new lockers in the UK by the end of this year, and 2,500 in 2021. We’re also in the study phase for France and Spain, and our most optimistic scenario has Germany on the map. My dream is to have a huge network of at least 10,000 to 15,000 lockers in each country, and to make it happen more quickly than we did in Poland.
What advice would you give the next generation of changemakers?
Be open-minded. Look at examples of experienced people who have adapted to change and have created a unique product.
Those just starting out may have to forget about work-life balance. I set up my unaddressed mail delivery business when I was a university student. When it reached a 40% market share, a venture-capital fund offered to buy me out for €13 million. I refused because it was too early for me to retire – at least from my first business; instead, I decided to grow it by acquiring competitors.
You only have 10 to 15 years to build a solid background and learn from your failures. An important characteristic of a mature businessperson is that they’ve had at least one or two catastrophic failures in their career, and they’ve learned from them. I was in on the verge of bankruptcy in 2015 because the state postal monopoly eliminated private companies from the postal business. However, thanks to appropriate and timely decisions and cooperation with an excellent management team, I was eventually able to rescue the company. The lessons I learned from that are priceless.