It is reported that due to the gradual contraction of the postal business, Singapore Post ("Singapore Post," hereinafter referred to as "SingPost") will bet its future growth on the logistics business, the old company once again into the highly competitive logistics industry.。

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SingPost's delivery and parcel business suffered an operating loss of S $15.9 million (approximately US $11.8 million) in the fiscal year ended March this year.。It was the business's first-ever loss due to customers "digital transformation during the pandemic, as well as rising fuel and labor costs.。As a result, the company's overall net profit fell 70% to S $24.7 million。

Against this backdrop, SingPost's CEO Vincent Phang said at last week's earnings announcement that his company was assessing the commercial sustainability of the domestic postal business.。

SingPost dates back to 1819, when postal services began as a city-state.。Even after it was privatized in 1992, it has maintained a monopoly on postal services, but this position has become a financial burden, prompting a reflection on the entire postal system。

However, Freight Management Holdings Australia (FMH) is at the heart of the business transformation.。SingPost first took a stake in the transportation company in 2020 and increased its stake from 51% to 88% in January this year, with a total investment of 2.S $700 million。

It is understood that FMH's advantage lies in planning logistics solutions for enterprises, using artificial intelligence to evaluate both time and price to determine the most effective route, and now Australia has about 500 customers。Moreover, the company has signed contracts with its own fleet of aircraft, ships and trucks, allowing FMH to scale up while minimizing its investment in vehicles and storage.。

Thanks to the acquisition of FMH, SingPost's logistics operating profit almost doubled to S $84.7 million in the last fiscal year.。The business accounted for 70% of overall sales, compared to about 30% in fiscal 2018, while the delivery and parcel business accounted for about half of sales.。

It's not hard to see that Phang has been trying to reform SingPost into a "global logistics company."。Prior to joining the company in 2019, he served as CEO of ST Logistics Singapore, where he led the postal business until his current role in September 2021.。

Phang sees strong demand for cross-border e-commerce, including freight from China to Southeast Asia, and SingPost hopes to use Singapore as a shipping center to connect China with markets in Southeast Asia, Australia and Europe.。the company plans to set up a second logistics center in hong kong to expand the scope of its services, according to relevant sources。

Competing for investors in the logistics industry at home and abroad is difficult to calm down.

As for the domestic market, SingPost is teaming up with Lazada, an e-commerce subsidiary of Alibaba Group (SingPost's second largest shareholder), to strengthen its logistics business.。Last year, the two began working together to launch autonomous parcel drop boxes for online retailers at post offices and have more planned spots at train stations and shopping malls.。The deployment complements SingPost's local network of more than 100 parcel lockers to make parcel delivery more efficient。

However, the market competition never stops, and SingPost is constantly under threat from competitors as it develops.。Local start-up Ninja Van and Indonesia's J & T Express quickly took hold in the market。According to industry sources, the market has been divided between the two companies and SingPost.。

Due to Singapore's small size, which limits the size of the market, international business has naturally become the key to the growth of the industry.。Figures show that 86% of SingPost's revenue last year came from overseas, with FMH-derived revenue among them.。

But the competition in the international market is also very cruel.。On May 12, Nippon Express announced the acquisition of Austria's Cargo-Partner, enhancing its ability to transport between Asia and Europe.。

However, this is not SingPost's first foray into the overseas logistics market.。The company acquired two U.S. e-commerce companies in 2015, but both had sluggish businesses, forcing SingPost to write down the full value of its investment in 2019, and the sudden resignation of multiple employees on the management team during the acquisition process also deepened investor distrust to some extent.。

The transition to logistics has also been a challenge for postal companies in other regions.。In 2015, Japan Post Holdings invested about 620 billion yen (about 45.$200m) for Australian logistics firm Toll Holdings, but eventually sold part of the stake after the business ran into trouble。Colleagues, Australia Post mulling cutting postal service and increasing parcel delivery service。

Whether Phang succeeds or not remains to be seen, but most investors seem skeptical.。SingPost shares fall below 0 after earnings release.S $50, a record low。