The innovation challenge facing postal operators worldwide dominated discussions on the first day at the Universal Postal Union’s World Strategy Conference as postal executives, government representatives and private companies debated how to best respond and adapt to the rapid changes thrust upon the sector by technological change.
“Together we must take stock of our organizations and the postal sector today, and shape our future tomorrow,” UPU Director General Bishar Hussein told the conference.
The rapidly expanding e-commerce sector was of particular interest during the opening day of the conference. While this sector promises great growth for postal operators, it brings many challenges as well. Consumer demands when it comes to delivery of e-commerce goods, for example, are changing quickly. As well, it is still unclear whether e-commerce giants, such as Amazon, are interested in handling last-mile delivery themselves.
“The future of commerce is a blurred landscape, where the consumer dictates how, where and when he will consume,” said Stefan Krawczyk, associate general counsel and head of government relations at eBay. “That means the delivery operators will have to adapt to what the consumer dictates.”
Postal operators are already changing the way they deliver packages, including introducing package lockers and sending delivery notifications to customers via text messages. Krawczyk, however, stressed that consumers are looking for transparency and predictability when it comes to package delivery. A seller in Europe needs to feel certain that when they send an item to a buyer in South America, it will arrive on time. They also want the service and pricing to be transparent and logical, Krawczyk added.
Dimitry Strashnov, director general of Russian Post, seconded that viewpoint. Postal operators, for example, should analyze what kind of delivery their customers need and expect. “Do we need to deliver all the parcels in one day or two days?” Strashnov asked. “Would a customer be satisfied having three-to-five day delivery but with a high predictability level. Can we deliver on the promise? This is getting more and more important today because the cost of five-day delivery is lower than one day.”
Postal operators must also be efficient to maintain their profitability, Strashnov said. This, in turn, allows them to invest in their infrastructure to create new products.
The development of new products is an important focus for postal operators worldwide. Take Saudi Post, which is leveraging its established assets such as its transportation infrastructure, last-mile delivery network, postal offices and technology to expand its range of products, according to Mohamed Saleh Ben Taher Benten, the organization’s chairman and chief executive officer. For example, Saudi Post has transformed its transportation network into a logistics network. Its NAQEL logistics joint venture, in which it holds a majority stake, provides services for many different industries in Saudi Arabia, including fashion retailers and food processors.
Another attractive area for expansion is postal financial services. In Indonesia, the government has asked the Post to conduct a pilot project called the “post savings account” in six provinces as many people in that country still store their cash at home, according to Kalamullah Ramli, Indonesia’s director general of the ministry of communication and information technology.
The development of such value-added services is what makes Moulay Hafid Elalamy, Morocco’s minister of industry, trade, investment and digital economy, optimistic about the future for his country’s postal operator.
“From my point of view, posts will continue to be profitable in coming years if they modernize,” Elalamy told the conference.
However, it’s not just the postal operators that have to adapt, but the rules as well, according to speakers at the conference. Philippe Wahl, president of France’s La Poste, said work on the development of the UPU’s global integrated postal programme, known as ECOMPRO, is necessary for the further development of the e-commerce market.
“We need to communicate and exchange information with all members from the UPU,” Wahl said. “It’s the next big step we are taking together.”
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