Postal Service Business is not what it used to be in the 70s or the 80s. It is no longer the dominant mail and parcel market as it was, prior to the internet revolution. What changed the incumbent monopoly of Postal Networks around the world? One of the prominent reasons is the heavy competition in terms of cost and margin, from new urban post carriers.
Operational costs and evolution of last mile service attributes (speed, visibility, consistency) have pushed the National Post Carriers towards dropping revenue margins, which are expected to flatten by the end of 2025.
Last Mile Delivery Automation (Smart Lockers, Drones, Autonomous Vehicles) may yet lend them the edge –required to rebound from these dark depths. By leveraging their existing delivery network, they may force the corporate and consumer mail markets to route business through their automated service systems.
Problems with Postal Delivery Networks in the 21st Century
Mail Delivery Networks need ‘Big Money’
While mail delivery networks are bound by an unsaid obligation of universal service rates; the costs to fulfil the last mile operations for the post are not so consistent. Mail Delivery Management Operations require separate business functions of collection, sorting, trunking, and delivery. Each of these functions is not only met with a labour demand but an equal investment in equipment and real estate. If the postal networks can’t appropriate their excess workforce, they should employ it alternatively and effectively to expand operations while streamlining business support functions through automation.
It’s Rural Postal Branches vs. Urban Postal Branches
Rural Post Office Branches tend to employ the same per capita workforce to collect and deliver mail in underpopulated areas compared to their Urban counter parts. Evidently this increases their cost to scale and cost per mail. Most global rural mail networks thus tend to absorb the revenue generated by urban branches. If only there could be a cost-effective last mile mail delivery solution, that stabilized cost of collecting and delivering mails, postal networks could focus on investments for service improvements.
Modern Post needs to Smarten Up – Say hello to Smart Lockers!
So, Post and Mail Carriers cannot control their pricing, nor can they control the competition from their own rural branches. What they can control is underlying operational costs at the last mile.
Automating deliveries and collection can help incumbents stabilize cost per mail across the network. While selective automation for sorting, logging, distributing have been there for a while, cumulative automation solution of Smart Postal Lockers is rapidly rising as a new favorite.
Leading Postal Networks are already using Smart Lockers
Numerous government and privatized networks across the world have already started using Automated Postal Lockers to save costs and improve services.
- Australia Post (National) has a 400+ strong network of free to use 24/7 Parcel Lockers located near post offices, train stations, supermarkets and residential units.
- German National Post (Deutsche Post) managed by DHL runs a PackStation™ Network of 6500 Postal Lockers since 2001. It’s also looking to expand the network to 12000 Smart Lockers by 2022 (Source: Deutsche Post News).
- USPS (United States Postal Service) GoPost® is a pilot programme being run in the country for streamlining consumer and corporate mail across all USPS products such as flat mail, priority mail, media mail and more. The service is free for now but is likely to be monetized for corporate consumers in coming times.
What’s to gain from Smart Lockers in Postal Services
For over a decade Mail Networks have only registered a 1%-2% growth in productivity gains, while e-commerce, logistics, banks have shown 17% to 300% growth in the same time. Automated Lockers can help Post and Logistics Delivery Networks scale this gap.
Common Post Office Networks reach beyond the last household threshold with their inherent nationwide infrastructure. Smart Lockers can empower these networks with autonomous and scalable delivery automation to make mail experiences fast, trackable, engaging and secure. Apart from converting common mail exchanges into digital experiences, Smart Lockers can help mail and post carriers with:
- Contactless Last Mile Deliveries
- Reduction of Sorting, Logging, and other pre-delivery functions
- Elimination of Cost Oriented with Doorstep Deliveries
- Staff Optimization for serving greater territory
- Saving the Carbon Footprint of overall Mail Delivery System
- Reduction of Theft, Handling, and Pilferage losses
- Increase in Delivery Efficiency and Postal Network Capacity
- Two-Way interaction with customers for trackable deliveries
Smart Lockers are No Threat to Mail Workers or Post Office Wallets!
Automated Mail and Post Locker directly benefit the Mail Workers/Officers delivering doorstep service, as the last mile is replaced with a personalized and centralized delivery hub. Setting up an Automated Postal Locker Network also does not require a large CAPEX, or for that matter a great deal of initial investment. The savings in routing, mail handling capacity, fuel and transport alone adjust the cost of first few years.
Smartbox as a pioneer provider of End-to-End Automated Locker Management Solutions offers customizable Mail and Parcel Lockers for need-based post office requirements. It helps postal networks expand their footprint and eliminate operational barriers by automating the labour and cost intensive operations. Powered by a proprietary locker management suite, Smartbox ensures absolute security of end-customer data and seamless integration with inherent IT and other source systems.
Smart Lockers and Redemption of Postal Delivery Networks
Mails per capita is still on the rise. Countries like USA, China, Australia, Singapore still deal with more than 100 letters per capita every year. The dilemma of Post Office Networks is that of a Fixed Cost Revenue Structure. Saving their Variable Costs can redeem them from the counter-effects of internet revolution. With the severely low margin on each transaction, postal delivery networks need must focus on optimizing the last mile dynamics of Delivery Networks to recover their dominance in the Global Market. Who knows maybe, E-Commerce and Large Scale Urban Logistics might succumb to reach and technical might of Postal Networks in the future.
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