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Pitney Bowes and TZ lose out on Oz parcel terminal deal

Thursday, May 31st, 2012

Pitney Bowes and its parcel terminal supply partner TZ Ltd (TZ or TZL) has been informed it has failed to win a major tender in Australia.

The outcome has led to TZ chief executive John Wilson, who was closely involved with the tender proposal, to step down, with the company board taking direct control.

The tender was understood to have been with Australia Post, although owing to confidentiality obligations the parties involved cannot name it, other than describing it as “one of Australia’s largest parcel delivery and logistics operators”.

Pitney Bowes Australia and TZ have been running a trial for four of the automated self-service parcel terminals in post offices around the East Coast in recent months, a trial that is being expanded to 10 machines in the next few months.

However, in a statement to the Australian stock exchange today, TZ chairman Mark Bouris confirmed that the partners had failed to win the tender for the wider rollout.

Bouris suggested in his statement that pricing of the contract proposal – something controlled by Pitney Bowes as the lead on the project – and the integration of the terminals with the potential customer’s network were factors in failing to secure the tender.

No details about the final winner of the tender were made known to Pitney Bowes or TZ. Australia Post told Post&Parcel it could not comment on its parcel tender at this time.

Pitney Bowes also declined to comment on the Australian tender, although spokesman Matt Broder told Post&Parcel: “Pitney Bowes is disappointed in the outcome of the parcel terminal tender in Australia.”

Proof of concept

“TZL’s technology is equal to world’s best practice, and is no longer a work in progress”

Bouris told investors that the parcel lockers on the trial have been working successfully during peak periods, and that the trial has allowed TZ to develop its knowhow on the parcel terminal solution, as well as offering a proof of concept.

He said: “TZL has witnessed first-hand the entry mechanisms into this lucrative market segment and believes this is a major growth area globally and that TZL’s technology is equal to world’s best practice, and is no longer a work in progress.”

TZ has now been invited to bid for contracts in Asia, the Middle East and North America as a result of the Australian project, its chairman said, and is in discussions with other Australian logistics firms and online retailers.

Bouris also revealed that his company would be looking to change its approach to market, no longer limiting itself to being just a supplier.

“TZL will look to provide a complete alternative parcel pick-up solution,” he said, going on to say that his company was also “aggressively” pursuing a potential partner to develop individual parcel lockers suitable for couriers and delivery companies to securely drop off packages at individual residential addresses. A prototype is set to be trialled within the next 30 days, he said.

Cost cutting

In his statement, the TZ chairman also confirmed that the company would be acting to reduce its cost overheads “at every level” within the next month in the wake of failing to pick up the Australian tender.

The company CEO has had his resignation accepted, but will remain working with the company as a consultant to assist in the transition, although no replacement is to be hired at this stage as Bouris and other executive directors take on the CEO responsibilities.

Along with the postal and logistics business, TZ has been gaining interest in its parcel terminal machines from apartment building managers, and also by large businesses looking to allow employees to receive online purchases at work.

Bouris said he expected TZL to achieve its first break even month during the last quarter of the financial year ending June 2013.

Source: James Cartledge, Post&Parcel

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