Postal operators can fight off new challengers with technology-based innovative services to defend and expand their parcels business, according to a leading consultant, Brody Buhler from Accenture.
Posts should take more advantage of technology such as artificial intelligence and big data to develop innovative and cost-effective services, he told the Leaders in Logistics Post & Parcel Europe conference in Berlin last week in a wide-ranging presentation on the challenges and opportunities for postal and parcel players.
Buhler, Accenture’s Global Managing Director, Post and Parcel Industry Group, said an estimated 60% of online retail offers in 2016 included free shipping, which had reportedly risen to 80% last year. Retailers were moving inventory closer to customers to speed up deliveries, with Amazon alone now operating about 1,000 warehouses. “All this is possible because of their use of data. They can put goods closer to customers,” he said.
However, he was critical of start-up crowdsourced delivery companies who were heavily loss-making and effectively subsidised by venture capital investments. “There are massive subsidies of free and fast deliveries,” he commented.
The experienced postal industry consultant argued that postal operators are the only companies “who can do crowdsourced delivery with the right economics”, citing the example of Deutsche Post DHL’s new US B2C delivery service Parcel Metro.
Mark Harrison, head of markets for the International Postal Corporation (IPC), presented the latest research on the fast-growing cross-border parcels market, showing that postal operators delivered 70% of all such parcels in 2017, a drop of three percentage points as competition increased. According to the IPC figures, “consumers care less and less about who is delivering their goods,” he commented.
Rainer Schwarz, head of DPD Austria, presented some of the parcel company’s recent product innovations for the Austrian market, including deliveries of online grocery orders for HelloFresh, delivery ratings, evening and Saturday deliveries, and urban deliveries via City Hub micro-depots. Looking ahead, he said customers will soon be able to enter their delivery preferences in the MyDPD app.
In a panel discussion, Schwarz admitted that free delivery offers by retailers “are putting big pressure on parcel companies”. He declared: “We need to get prices up because this (B2C) service costs a lot of money.”
However, the long-serving DPD Austria chief played down the potential for final-mile delivery collaboration. “Handing over the final mile to others means losing contact to consignees. I think it has to remain in our hands,” he commented.
Other postal executives also explained at the conference how they are modernising and developing new services.
Shinya Koike, Executive Manager, Postal Business Planning Division at Japan Post, said the postal operator is introducing more flexible delivery options for its fast-growing Yu Pack service but faces the challenge of a high 20% level of failed first-time deliveries. “We have to reduce the redeliveries,” he said. In response, the company has introduced Hako Post parcel lockers in well-used public places along with collections from convenience stores as alternative delivery solutions.
In parallel, Japan Post wants to use technology to solve not only this challenge but also that of a serious driver shortage in a rapidly-aging population. It is looking into collaborating on linehaul transportation capacity, is considering using drones for deliveries in remote areas, and has just tested a robot that would transport parcels to convenience stores for customer collection. “We are thinking about starting to use drone this year,” he said.
Ivan Culo, CEO of Croatian Post, whose parcel volumes are currently growing 30% a year, presented the company’s new ‘Yellow Click’ e-commerce webshop solution for SMEs as well as investments in sorting capacity. Daniel Sánchez Blázquez, Customer Experience Director for Spanish postal operator Correos, underlined that “Spanish consumers want convenient delivery, not free or fast delivery”.
Some 200 postal industry managers and suppliers attended the Leaders in Logistics Post & Parcel Europe conference, which was organised by Marketforce.
