Supplier Spotlight

Does the integration of parcel tracking with digital PAs pose any security concerns?

Industry Opinion

« back to blog listings

A mixed bag?

Elmar Toime, a leading international postal consultant, looks at the main considerations for posts looking to combine lettermail and parcels into one delivery stream

For both parcels and letters, operational strategies are driven by productivity needs and quality of service. Letter delivery has regulatory requirements in terms of service and price. Whereas parcel delivery is driven by market competitiveness and the demands of senders and receivers for safe, fast and cheap delivery.

At a superficial level, the idea of combining delivery seems attractive. Letter carriers carry small parcels anyway. Letter volumes are falling, so there should be capacity on the delivery route. Parcel volumes are increasing, and rather than increasing parcel routes, the letter-delivery worker can take on more parcels. Combining the two rounds could save labor costs, keep service standards in place, and perhaps reduce delivery costs for both letters and parcels. However, it is not that easy.

There are many things that need to be considered. First is the impact on work processes. In a finely tuned, highly productive mail delivery service, routes are determined by detailed analyses – number of stops per route, distance between stops, optimal start and finish points, etc. Adding a new step, such as having to stop and wait for someone to answer the door, disrupts the routine. It is a marginal cost, but it is still a cost.

On the other hand, where letter delivery is not so tightly managed, there can be capacity to add more parcels to the route. This highlights that the effectiveness of combining parcel and letter delivery is more feasible in rural or low address density areas. There, the carrier is likely to already have a van or vehicle and adding parcels may be less of a problem, compared with a postal worker in the inner city using a trolley.

Capital investment may also need to be made. Adding greater e-commerce parcel volumes can make on-foot and bicycle delivery unfeasible. Delivery routes may need to be equipped with new vehicles, such as Deutsche Post DHL’s new StreetScooter electric delivery vehicle, which has been designed to accommodate greater parcel volumes.

Investment may also need to be made into redesigning last-mile delivery hubs. Lettermail usually arrives in these hubs sequence sorted so that loading up the carrier’s mail containers is a far more efficient process. Making parcels fit into this routine adds complexity and cost.

Another complication is the trend for the number of letter delivery days to be reduced, from five or six days per week to three and possibly less. However, e-commerce is demanding seven-day, same-day and time-slot promised delivery, as well as returns pickup and proof of delivery, all at lower cost. There is a great difference in customer expectation between mail and parcel service.

The business case for combining letter and e-commerce parcel delivery streams depends on many factors, which will be different for each post. Getting this right is a sophisticated exercise and raises a final question: If combining delivery is judged to be an appropriate operational solution, can we still think about parcels in terms of marginal costs, or is it the parcel operation now driving the costs of the new delivery route?

Bio:
Elmar Toime is an independent advisor to the postal sector. He was chief executive of New Zealand Post Limited from 1993 to 2003 and then executive deputy chairman of the Royal Mail Group from 2003 to 2004. He was a member of the Supervisory Board of Deutsche Post DHL from 2006 to 2016. Today Toime is chairman of Postea Group and a non-executive director of Qatar Post. Other directorships include Solution Dynamics and Blackbay. He is a fellow of the New Zealand Institute of Management and the UK’s Royal Society for the Encouragement of Arts, Manufactures and Commerce

December 1, 2016

 

Comments:

There are currently no comments.

If you would like to post a comment about this blog, please click here.

Video Exclusives


Drone footage of Hermes super hub

Hermes UK has opened its new purpose built, automated parcel distribution hub in Rugby, the biggest of its kind in the UK. The £31m (US$40m) development represents the most significant investment in the company’s history and will create more than 100 jobs. Located in Rugby, the Midlands super hub measures 270,000ft², the equivalent of 34 soccer pitches, and has the capability to efficiently process in excess of one million parcels each day.

23 August, 2017


UPS delivery drivers trained using VR simulations

UPS has announced that it will start training student delivery drivers to spot and identify road hazards using virtual reality (VR) headsets that simulate the experience of driving on city streets. The company will launch VR training at nine UPS Integrad training facilities in September.

To read more about the training simulation, click here.

16 August, 2017

Read Latest Issue

Read Latest Issue

Exclusive Articles

Ahead of his presentation at POST-EXPO 2017, Holger Winklbauer, CEO at International Post Corporation (IPC), talks to PPTI about the latest changes in e-commerce markets.
Click here to read more


Justine Clark from Honeywell Safety and Productivity Solutions looks at how posts can refine last-mile delivery and save cost and time by embracing new technologies in distribution centers.  September 12, 2017
Click here to read more


Interest in physical trackers for monitoring parcels is at a high as customers demand more accurate and reliable information about their deliveries. Kirstie Pickering looks at the progress of parcel tracking devices.
Click here to read more



Supplier Spotlight

Supplier SpotlightClick here for listings and information on leading suppliers covering all aspects of the postal technology industry. Want to see your company included? Contact helena.hunt@ukimediaevents.com for more details.

فروشگاه اینترنتی فروشگاه اینترنتی سیستم همکاری در فروش ماهواره آنلاین اندروید کانال تلگرام ماهواره آنلاین اندروید چت روم دانلود فیلم فروشگظ;ه اینترنتی

Submit your industry opinion

Industry BlogDo you have an opinion you'd like to share with the postal technology community? We'd like to hear your views and opinions on the leading issues shaping the industry. Share your comments by sending up to 500 words to helen.norman@ukimediaevents.com

Submit Your Recruitment Ad

Recruitment AdTo send us your recruitment advertising or to receive information on placing a banner please email helena.hunt@ukimediaevents.com