The Russian expediting company Sovmortrans and the courier holding MXP (its Russian trademark is MaxiPost) have announced a merger. During its first stage, Sovmortrans acquired 10% of MXP shares; it is supposed to buy out the remaining 90% within a year. Following the merger, the two companies plan to create an integrated logistics company which will offer B2B and B2C services in Russia and abroad.
According to Sovmortrans General Director Igor Osokin, the company has long searched for a way to diversify its business, aiming to join the B2C segment. Having two options – to create B2C from scratch or to purchase an existing infrastructure – they chose the latter, considering a quite competitive environment in the express delivery segment, the rapidly growing market, and the high barrier to entry. Sovmortrans began market research and started looking for a partner to suggest they join efforts.
Sovmortrans chose MXP Holding, a rapidly developing courier company that operates in several countries (Russia, China, Morocco, Nigeria and South Africa). MXP specializes in B2C services in courier delivery and e-commerce. In the past 12 months, MXP has showed the 5-fold growth of the number of packages, and its forecasted revenue for 2019 (including offices in all countries) is over RUR 3 bln ($47 mio).
Among Sovmortrans’s clients are rail transport and sea freight companies. The operator will now offer shipping by land, including customs clearance and door to door delivery. Clients of MXP – mainly online stores – will be able to use sea container transportation.
According to market experts, the extension of the container transportation to the ‘last mile’ can significantly improve the international online trade market and give it a new boost; in particular, by increasing the flow of large consumer goods from China to Russia. Large cargoes are mostly delivered by air or railroad, therefore the shipping cost of, say, a refrigerator, often exceeds the price of the product. The use of sea transportation will significantly lower delivery costs in this segment and will also significantly speed up the delivery of large cargoes.