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The right track

The demand for transparency from customers makes the postal service one of the most intensely monitored industries in the world. Posts have to cater for customers like never before, thanks to the rising popularity of online shopping and the increasing demand for a choice of delivery services.

Tracking has become an essential part of the customer experience, with customers eager for up-to-date information about the location of their parcels and when they can be expected to arrive.

Most delivery companies offer online tracking, but these services often lack the precision and accuracy about a parcel’s location that customers now demand. Increasingly posts and delivery companies are turning to new technologies, such as the use of physical tracking devices, to improve the quality of data for the monitoring and tracking of parcels.

Delivery information

Putting physical trackers inside parcels is one way for customers to be better informed. Switzerland-based Kizy Tracking commenced operations in 2014 and has developed a tracker that weighs just 47g. GPS is the most commonly used technology for trackers, but the Kizy device instead uses cell phone and wi-fi networks for localization and communication.

Alexandre Luyet, co-founder of Kizy Tracking, says, “In the global supply chain market, cost, battery life, autonomy and coverage are the critical factors for a successful tracking device. GPS trackers don’t work inside buildings and containers. Data transmission, especially abroad, is still costly and the technology uses too much energy. Other technologies, like RFID work well inside closed logistics paths, but once you go outside the infrastructure you have no information.”

Kizy’s main market is currently with freight shippers and transportation companies. However, the company sees a large market for its device in individual parcel deliveries. Senders that use Kizy’s device set up an account online and buy credits to access the tracker’s data. Users select online whether they require updates daily, hourly or every 15 minutes. The details of the parcel are then entered before the delivery ‘mission’ is started.

The pay-as-you-go pricing model means senders only pay for the days their mission is running and there is no fixed subscription per device, which Luyet claims makes it the most flexible solution on the market.

The tracker is sent to the sender, who packs it with the goods. The device then begins to collect data about the location of the shipment and transmits alerts and notifications. Once delivered, the tracker is returned by the recipient through the post. Most of Kizy’s users include prefranked global response envelopes for the recipient to use to send the tracker back.

“We offer a solution that enables end-to-end supply chain visibility on a large scale at an affordable cost, anywhere in the world,” says Luyet. “We have built our technology and business model around the actual needs of the industry and aim to provide our customers with the data they need, when they need it.

“More than tailoring Kizy to specific needs, we aim to build a solution that can service the great majority of our customers. To enable large-scale deployment of thousands of trackers by a single customer, we have built a system that automates the tracker configuration process to make things as simple as possible for the user.

Luyet adds that one of Kizy’s main challenges is to educate customers on how to use the device and its benefits. “I think they clearly see the need for enhanced visibility, but need ideas and concrete examples of how it brings value. Creating case studies helped to accelerate the deployment, especially when you can quantify the results.”

Internal tracking audits

Postal company Asendia operates in 220 countries and is working with Kizy to add its tracking functionality to the services it offers. “The quality of tracking information is very high with Kizy Tracking, as you can see whenever you want to know where an item is,” says Elliott Mallows, head of marketing at Asendia.

“The tracker provides the maximum delivery transparency and security for our shoppers. We also use Kizy tracking for internal control of quality when testing delivery routes. By adding the trackers to a selection of items, we are able to follow them over the whole delivery chain and can recognize bottlenecks in processes and continuously improve delivery.”

Location and condition

Another physical tracker option comes from UK-based Hanhaa, which describes itself as an Internet of Things (IoT) company. Hanhaa is working with the postal and logistics industries through its project ParceLive.

ParceLive is a live tracking service that allows users to determine the exact location and condition of their parcel in real time, anywhere in the world. ParceLive’s tracking device has six sensors – temperature, humidity, GPS, tilt, impact and light – and has used 75 devices in its trials to date.

An accelerometer can tell if the parcel has been dropped, for example, and the light sensor can tell if it is opened. Updates on the condition of the parcel in transit also help the firm’s tracker stand out from other tracking solutions, says the company. The pharmaceutical industry, where deliveries are often time critical and temperature controlled is an early adopter of the technology.

Each postcard-sized tracker is battery-operated and embedded with a SIM card that runs off Hanhaa’s own mobile network, which uses existing infrastructure to function. They feature an e-paper screen to display the address for the recipient to return the tracker, which can change according to the parcel’s destination.

The trackers have just entered the first stage of mass production, with 20,000 expected to be available before the end of 2017, increasing to 100,000 by the end of 2018. Last month the company received its first batch of 500 mass-produed trackers.

Franchise model
Christopher Riley, marketing coordinator at Hanhaa, says that the company is using a franchise business model, much like Visa offering its services to banks, which then create their own terms.

“Clients pay a fee for each use of the tracker and we refine the software to make it specific to their needs,” he says. “We also redesign the packaging with the client’s branding because, as well as looking sleek, customers are loyal to brands they are familiar with, so this increases the chance of the trackers being returned.

“The client decides how to use the data created by the trackers, and many offer temperature tracking as a premium service to customers. The flexibility for clients to use the tracker as they wish is a huge selling point.”

The packaging of the tracker includes a prepaid postal license, allowing it to be returned without any additional charge in 36 countries, a number that Hanhaa hopes to increase. Despite this, getting the end-user to return the tracker remains the company’s biggest challenge.

“We have employed a consumer behavior specialist to help us engage with recipients so that they return the device,” says Riley. “This has helped our approach to packaging design and ways in which we can educate recipients so that they know the tracker is there for their benefit. It is also important for the end user to know the tracker should not be disposed of in household waste because it contains a battery.

“We currently have more than 90% of our trackers returned, and are now experimenting with ways to get closer to 100% in the future.”
Upon receiving the returned tracker, Hanhaa resets it and prepares it for reuse. Each tracker has an expected two-year life, based on two deliveries a month.

“Next year we want to provide countdown capabilities for parcel delivery slots and hope customers will push back data so that delivery details can be as accurate and detailed as possible,” says Riley. “This will further help us predict where problems occur in a parcel’s delivery cycle, such as being held up at customs or noting places where parcels often go missing.”

Customer demand for more detailed updates on their parcel’s whereabouts can only increase, and the call for more advanced technologies looks set to stay. It is in the hands of delivery companies to listen to their customers to ensure that they provide what the market demands.

Whether physical trackers are part of this picture remains to be seen, but companies such as Kizy and Hanhaa are pushing hard, with both individual customers and postal and parcel delivery companies, to ensure they are.

 

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