UPU Review 2020: Discussing Postal Challenges
The following story covers the World Leaders Forum and the Parcel and Post Expo 2020, which for the very first time was held virtually.
Posts around the world continue to redefine operations in the face of digitalization, competition, changing consumer demands and now a global pandemic, speakers said at the UPU World Leaders Forum, held on the first day of UKi Media’s Parcel and Post Expo 2020.
Leading figures in Posts from around the world gathered this week for this year’s unique expo held in live video sessions online from 12-15 October.
While there are plenty of challenges, such as the longtime trend in declining letter volumes, Bishar A. Hussein, the Director General of the Universal Postal Union, said Monday, that postal organizations are coming out ahead during the pandemic driven by the growth in eCommerce.
“We need to have innovation, innovation, innovation to be able to meet the expectations of our society,’ Hussein says.”
“I think the postal organizations have always adapted to every situation that they have faced in the past,” Hussein says. “The same technologies that have really been a concern for us have helped us actually grow other segments of our business, particularly the packets and parcels.”
Still, Posts are gathering this week to discuss in more than a dozen sessions the pressing issues they face. These challenges range from competition and consumer expectations to the environmental impact of increased package volume.
“We need to have innovation, innovation, innovation to be able to meet the expectations of our society,” Hussein says.
UPU’s head also discussed the UN agency’s top priorities for the remainder of 2020. These priorities include reforming member contributions to the union, and Mr. Hussein notes there is a major proposal to determine the future model guaranteeing the Union’s sustainability. After decades of discussions, the union is also close to opening up to other players, including eCommerce providers. “That is where the future of the union lies,” Hussein says.
In the COVID-19 era, Posts have had to evolve rapidly due to the continued declines in letter volumes and skyrocketing package volume, grounded airlines, and reduced staff, all while the digital world has transformed consumer expectations.
“With the touch of a button we order a taxi. With the touch of a button we order groceries,” says Peter Somers, the CEO of Emirates Post. “The Customer expects immediate action, delivery, visibility, and transparency.”
Changes at Emirates Post include rolling out a new website and application to extend its digital services. The Post also launched a souvenir stamp to honor frontline workers with the proceeds going to the Red Crescent.
The CEO of Australia Post, Christine Holgate, outlined how volume trends have been accelerated by COVID-19 pandemic. She informed the audience about the massive growth in parcel delivery, and the changes in the way Australia Post is viewed by its biggest customers. Ms. Holgate also underlined the very real need to be aware of the bottom line and the constant need to highlight and to deliver efficiencies.
Community outreach is also advanced by technology, says Khalil Daoud, the Chairman and Managing Director of LibanPost, a private postal company in Lebanon. The Post used iris scanners while working with the influx of 1.5 million Syrian refugees to verify identities before processing food vouchers in coordination with the World Food Programme.
“The pandemic has also highlighted a sustainability question, Charles Brewer, the Chief Operating Officer of Canada Post, says.”
And, after a deadly explosion rocked Beirut in August, the Post placed mobile post offices in areas affected by the explosions, “to act as a social system in a crisis and to maintain our service,” Daoud says.
The pandemic has also highlighted a sustainability question. Charles Brewer, the Chief Operating Officer of Canada Post, says the spike in total volume reached numbers not expected for another nine years.
This kind of expansion, when overlapping with other delivery networks, is not sustainable environmentally or economically, says Elena Fernández Rodríguez, Director of International Affairs and Sustainability of Correos, the public postal operator in Spain.
“All post operators are focusing on new technologies in electric vehicles in order to reduce the environmental impact,” she says. There is also talk, Fernández Rodríguez says, of creating a kind of traffic control system to generate efficiencies in delivery networks.
Still, efficiencies are also reached in data, says Asta Sungailiene, the CEO of Lietuvos pastas in Lithuania. Posts need a culture where decisions are based on data, she says. In Lithuania, data from various sources, including the Post’s network of parcel lockers and tablets, allow the Post to plan routes and monitor orders, movement, efficiency and service quality, Sungailiene says.
Underlying all of this is the UPU’s role in creating the exchange conditions of the networks and the standards, says Pascal Clivaz, the Deputy Director General of the UPU.
“At the end of the day, if you want to make sure we are doing things in a rational and sustainable way,” Clivaz says, “… UPU must make sure we implement the sustainable goals. … That is one of the rationales behind our strategic approach to opening the UPU. We need to understand that our world will never be the same.”
Second day of Parcel and Post Expo 2020 stresses postal reinvention
When a shipment from Slovenia is intended for Croatia, a complex cross-border delivery system makes dealing with every-day disruptions time consuming and costly.
But a new postal project has been introduced to adapt to real-time needs and to allow for agile responses.
The solution is called the Cognitive Adviser tool and its project manager, Slovenia Post’s Alen Kahvedzić, outlined the main objectives at the Parcel and Post 2020 Expo on Tuesday.
“We would install a system or a mechanism that could respond to any changes in the environment,” Kahvedzić says. “Any ad hoc event, such as traffic interference or border crossing closures, or any other discrepancy, can be resolved with this technology.”
The tool is based on cognitive logistic objects, which can be anything in the supply chain such as delivery trucks or post offices, he says.
“It’s no longer sufficient just to look at the address and deliver the piece.”
Many other posts are considering what actions to take for their own cross-border services as new data requirements for Europe are scheduled to come online next year.
JP Thorpe, the global director of business development for parcel solutions at BlueCrest, at a presentation Tuesday, said data is becoming more and more relevant as Posts face new cross-border compliance requirements.
“It’s no longer sufficient just to look at the address and deliver the piece,” says Thorpe. “You have to show and tell everybody that cares about that piece what you’ve done with it when it’s been delivered.”
Today, 8 percent of parcels passing through a postal network have a valid tracking or unique number. In the future, Thorpe says, parcels with incorrect or insufficient data will be the exception. There will be no room for duplicated tracking numbers or incorrect formats in the data behind the bar code.
“Ultimately, the modernization of Posts to deal with higher volumes means you have to be able to rely on data,” Thorpe says.
Also on Tuesday, speakers shared their experiences working during the COVID-19 crisis.
The Ukraine Post, in a pilot project, partnered with a start-up marketplace for pharmacies to provide citizens delivery of pharmaceutical products, says Oleksandr Pertsovskyi, the Post’s former Chief Operating Officer. It started small scale, but now the Post delivers a few thousand pharma orders daily. The programme was widely supported and eventually a law was passed to keep pharma delivery as a permanent service.
The Post also grew its mobile post office programme, which is a network of vans that service small rural communities. In 2018, the programme was launched in one of Ukraine’s 24 postal regions with plans to move into another six. With the COVID crisis, the Post accelerated its efforts and now plans to cover the entire country with its mobile post offices by the end of 2021, Pertsovskyi says.
“The COVID-19 crisis has shown the need for flexibility and adaptability.”
“What the mobile post office represents is not just a traditional postal service, but is indeed the window to the modern world to people in the small, rural communities,” he says. “Pharma deliveries are done through those mobile post offices, also grocery deliveries.”
The Post is also pushing to expand its financial services. Pertsovskyi says approximately 4 million retirees depend on the Post to deliver cash pensions. But in a pandemic, this creates a possible point of disease transmission via the cash itself as well as exposure from human contact. The Post would like to bring services like these into postal savings accounts. He says the Post is hoping to get parliament’s final approval for full scale banking activities in the next few months.
“We should think beyond traditional postal or logistics services, and with the COVID challenges, postal players can reinvent themselves and think of all the adjacent services and business lines they can develop,” Pertsovskyi says.
The COVID-19 crisis has shown the need for flexibility and adaptability. One area in particular is the sorting process, says Dirk van Lammeren, the commercial director of Prime Vision BV.
“We believe COVID is not so much a revenue crisis but an uncertainty crisis,” van Lammeren says. “Our customers had to deal with a decline in available staff through sick leave and reduced productivity. It’s a paradox that requires even more automation to deal with heavy fluctuations in assets, volume and people.”
He says companies need to prepare themselves for ongoing turmoil in the market, but also to utilize data. Data on volume, customer response and performance can help Posts optimize, he says.
He also sees new ways of sorting in the future, such as autonomous sorting, as well as a need for open technology and
Last mile dominates discussions on third day of the Parcel and Post Expo 2020
The days of businesses setting the terms for customers may be at an end, and Posts who align their businesses in a customer-centric way will come out on top, particularly in last mile flexibility, according to Petri Princis, Senior Business Developer of PostNord, the post provider in Denmark and Sweden.
“No matter what the PostNord customer chooses, there is always a request for feedback.”
Princis, whose job is to develop last mile arrangements, says the recipient is really all that matters. Customers determine when, where and how their packages will be received, and posts will be hired again based on their experience.
“Last-mile orchestration is next generation logistics,” he says.
PostNord created an app for customers to track their shipment and choose how they will receive it--at home or at a retailer or parcel locker. Other features include augmented reality to get a sense of the parcel size; customers can also see real-time tracking on a delivery map, including how many stops are left before they receive the parcel.
The Post also updated their parcel locker service so that there are no longer text messages with codes the receiver needs to enter.
No matter what the PostNord customer chooses, there is always a request for feedback.
“I can’t stress this enough, because the recipient doesn’t want the fuss,” he says. “They really want their goods as fast as possible and frictionless. If we, and our app, can provide this experience, for sure we will be hired again.”
Customers continue to grow ever more demanding and the pandemic has only accelerated this trend. Kevin Seller, VP of sales at Escher, says we have seen five years of change happen in the last five months.
“We’ve begun to see changes to the traditional customer journeys and the central themes really are around convenience, accessibility, supporting online, and more and more self-service based journeys,” Seller says.
The trends in customer behavior indicate a continued increase in customers turning to online shopping and when they do go to physical locations, they prefer self-service options. Customers want their goods immediately and they want it at their convenience.
Seller says that a new customer journey may look something like this when they want to ship a package: They log into a shipping aggregator or a Post website. Then, the customer enters all relevant details themselves, such as names, addresses, any details about the contents for customs declarations and they pay for the parcel online.
“Delivery has gone from express, to next day, to same day and now to real-time delivery.”
The customer is provided with a QR code and later they take the parcel to a self-service kiosk where the code is scanned and a label printed. They then drop the package into a parcel locker. Later the customer will receive a text when the receiver collects the package, maybe also from a parcel locker.
These customer journeys will put an extra demand on our networks as well, he says, so Posts need to be ready to meet these demands by being able to serve the customers in different ways.
One way that Escher has visualized these options is by putting postal services in alternative locations, such as retail and gas stations. Convenience stores have longer hours making postal services more accessible to customers.
“We may need to expand networks quickly and go where the customer wants to go,” Seller says. … “Digital transformation is the absolute imperative, but it’s got to be with a customer-centric perspective and then Posts will discover many, many opportunities along the way that will strengthen their position in the market and long-term sustainability.”
Technologies presented on the third day’s expo sessions showed how Posts can transform in response to the growing customer demand for speed in deliveries.
Delivery has gone from express, to next day, to same day and now to real-time delivery.
For example, in China, Alibaba has promised delivery in half an hour, says Jian Zhang, President of Geek Plus Europe. He says 80 percent of customers are willing to pay a premium for this level of service.
Zhang presented Geek Plus’s robotic solution for the warehouse that improves flexibility and scalability of the logistics network. One key development is their robots with 1.5-meter reach that can access multiple bins and expand warehouse storage capacity by 2.5 times.
Nelson Fernandes, senior vice president for product and global business development at Planet AI, says Posts will continue to be relevant in our highly digital world because humans still need physical goods and Posts play a critical role in fulfilling those needs.
AI can be used to automate tedious, error-prone tasks to increase accuracy and speed. For instance, scanned data could be sent to the sender and receiver both in real time, he says, which would dramatically streamline cross border shipping by reducing the complexity, time, and cost.
Debate on climate action closes Parcel and Post Expo 2020
Post CH, IKEA, Bank of America, CLIF Bar & Co., HP Inc., these are among the 88 companies that will make the switch to electric vehicles by 2030 as part of the EV100 Initiative.
This represents 75 corporate fleets totaling 410,000 vehicles, nine leasing companies with 4.4 million vehicles, 25 service contracts, 23 customer-charging programs with 4,300 sites, and 66 workplace charging programs consisting of 2,250 sites.
Sandra Roling, who heads the EV100 Initiate for The Climate Group, an international NGO that works to accelerate climate action, shared insights into the role of electric vehicles on the final day of the Parcel and Post Expo 2020 Thursday.
“We know that if we want to keep climate change at manageable levels, we need to get to net zero emissions by 2050 and that means we need to halve emissions within the next decade,” Roling says. “That is a very, very steep curve.”
“Companies are also in a position to promote electric vehicles with their staff by offering workplace charging.”
She says 58 percent of light duty vehicle sales are expected to be electric by 2040 as solutions are developing quickly. Battery technology has improved driving prices lower and the vehicle range is expanding. But there are still supply issues.
However, companies have vast power to show the automotive industry that demand exists. In Europe, some two-thirds of all new vehicles are sold to companies.
Companies are also in a position to promote electric vehicles with their staff by offering workplace charging, for example.
Deutsche Post DHL Group (DP DHL), a founding member of EV100, committed to net zero by 2050, with 70 percent of first- and last-mile services to be clean by 2025. It already has more than 11,000 electric vehicles on the road. And with its StreetScooter, DP DHL saw savings of about 60 percent to 70 percent on fuel and 60 percent to 80 percent on maintenance and repair.
Austrian Post, with 1,500 vehicles on the road, found that 70 percent of their routes could be completed with one charge.
“The vehicles are built with the circular economy in mind, beginning with design, such as its steel frame that can be recycled when a vehicle is returned to the company.”
EV100 member companies can choose their own paths to compliance, but they report to the Climate Group once a year to verify their progress.
“These are difficult times,” Roling says, “but this is also an opportunity, as many governments are now thinking about rebuilding their economies, to think about how we use those investments and the momentum that they create to not just rebuild economies but build back better. I think electrification has a big role to play within that.”
Philipp Heim, Project Manager at Kyburz Switzerland, an electric vehicle producer, says there are substantial environmental benefits in using their light electric vehicles in last-mile delivery.
The vehicles are built with the circular economy in mind, beginning with design, such as its steel frame that can be recycled when a vehicle is returned to the company.
Battery production is energy intensive, he says, but during usage, emissions are very low. And since Kyburz takes returns from customers who no longer need the vehicle, the battery can be used in a “second life” in a refurbished vehicle or in other applications, like energy storage systems. Eventually the battery is recycled at Kyburz in a process they developed that requires little energy and no chemicals, Heim says.
Its fleet management system includes stop reports that help with route optimization as well as eco reports that create notifications, for example if a driver stops too quickly. These reports can encourage more environmentally friendly driving.
It can be tricky determining if the switch to electric is right for a company. But the sales and business development director of Voltia, an electric van producer, offered several tips companies can consider before making a decision.
“The Universal Postal Union also contributes to this work through its Online Solution for Carbon Analysis and Reporting.”
“We know that sustainability is more than just switching your vans to electric,” Pullman says, “but this step really helps the air we are breathing in the cities and you can start doing this immediately.”
The first step is to know the reason for the company’s change, which will help get buy-in of stakeholders. Companies must analyze routes, choose the right vehicles, and consider charging infrastructure. The company should then plan its financing and educate its drivers.
Things to be aware of, for instance, are that highways and hills tend to shorten the range for a fully electric van, so does the cold weather, he says. Recognize that an electric fleet will contain different size vehicles to match different scenarios in the plan.
One place to begin is with vehicles whose lease expires in the next twelve months. If they are operating on urban routes, these could be replaced with electric.
“Today you can service all your routes with electric vehicles if you want to,” he says. “You don’t have to wait for restrictions or low-emission zones to force you to do so.”
The Universal Postal Union also contributes to this work through its Online Solution for Carbon Analysis and Reporting – a platform to measure, report and reduce the impact of the postal industry on the climate.