Part one - Cutting the costs

Part two - Knowledge is key

Part three - Putting the customer first

Part four - Aligning key success factors with customer needs

Part five - Tools for the job

Part six - Trend setting

If you would like to discuss any of the above articles with Dennis, please find his contact details at the bottom of this page. Alternatively, please feel free to use Post&Parcel’s comment facility below.

Dennis Gilham - Biography

A Chartered Engineer and Fellow of the Chartered Institute of Marketing with over 30 years experience of delivering customer facing solutions in the postal sector. Dennis has held senior industry roles as Head of Corporate Partnerships, Group Business Line Director, Group Director of Product Marketing and Director of Research & Development. He has built a unique set of skills and knowledge in promoting new solutions for business customers of all sizes in mail, express and parcels.

Having worked with Posts worldwide, contributing to their business development through customer insight, marketing strategy and innovative solutions, Dennis now has the opportunity to help postal management in his capacity as Independent Strategy Advisor.

+44 (0)79 74 97 50 00

dg.concretconsult@talktalk.net

Postal strategies:  the four categories

Accenture has been monitoring developments in the global postal industry for many years using our High Performance Business Methodology, evaluating the performance of postal operators from both a quantitative and qualitative perspective.  This body of research allows us to monitor how the industry has changed over time and to better understand how market demands are forcing postal organizations to strive to continually improve.  Perhaps this is best evidenced in the area of the postal organizations’ strategy.  In 2006, our research showed that choice of strategy did not seem to be a major factor in determining success; having strategic clarity was sufficient.  In 2009, we found that strategic choice had become more important and, indeed, four strategic categories were emerging across the industry.  In 2010, we discovered that choice of strategy was absolutely vital to success and reflected as a top priority among our league table of postal players achieving high performance.

Figure 1 (click on image to enlarge) presents our four strategic categories and positions each of our surveyed organizations under the strategic category that best reflects their assessed performance.  While such a snapshot at a point in time is interesting, it is the progress over time that gives us the best insight to the industry and the characteristics associated with high performance.

• Global players: the geographic diversification that is being pursued by these organizations is truly global. They have identified the market segments that work best in a global sense, i.e. logistics and express, and invested heavily in building capabilities across the international marketplace. DPWN and TNT are the only two postal organizations that have adopted this strategy on such a global scale and the reality is that when evaluating their businesses at a corporate level, it is difficult to make a comparison with other posts. Therefore, express and logistics services players, UPS and FedEx are included in our global player category for benchmarking purposes. Looking forward, it is difficult to see any other global players emerging.

• Regional diversifiers: this category approaches geographic diversification on a more regional basis with organizations extending into adjacent markets. Looking at the operators who are pursuing this strategy highlights similarities in many of their domestic markets. Most notable is the size of the domestic market which in almost all cases is relatively small. As a result, while a nationally-based service diversification strategy could offer new revenue streams these are likely to be limited. The proximity of other geographies, therefore, offers an attractive opportunity.

• Service providers: these postal operators have adopted a focus that is primarily based around expanding the range of services within their domestic market. This would appear to be the most obvious choice of strategy for postal operators in large countries- expanding operations where their brand is already strong and they have an existing operational platform. An additional factor may also be the lack of opportunity for geographic expansion as a significant proportion of our service providers are operating in geographies which are discrete islands.

• Traditionalists: the traditionalist category has been historically the preserve of the operators who are focused on continuing to provide traditional postal services. The focus is on providing better versions of these services by integrating technology, improving flexibility and overall reducing cost. Certainly many, in fact most, of the operators offer products and services that are the same as service providers. But the financial contribution of these services is too small to affect their current financial performance.

The path to high performance

While adoption of a specific strategy is important to achieving high performance, it is not the only factor.  When we take a closer look at the postal organizations that achieve high performance, we discover some common themes around their business approach.

• Customer centricity: postal organizations that achieve high performance adopt a customer- centric approach, prioritizing customer needs at every juncture of their business operations -from product development through to customer service. These operators recognize that customers have the ultimate choice and they do all they can to continue to improve their offering and maintain their customer base.

• Cost focus: for postal organizations that achieve high performance, cost focus extends beyond improvement of their own operation to a fundamental consideration of their structure and the opportunity to outsource both core and non-core elements. These operators are not just looking to outsource back-office systems: they seek to incorporate lower cost, more flexible providers into their core operations.

• Digitization: technology is seen as an opportunity not just a threat for our postal organizations achieving high performance. They are using digitization to offer enhancements to the existing product offering, to create new products and to streamline their operational processes. Both physical and electronic environments are being embraced to help maximize their full potential.

• Sustainability: the environment is a significant factor for all businesses today. Postal organizations that achieve high performance view this not as an imposition or an overhead cost but as an opportunity. They have developed products and pricing strategies that position their businesses with the impact of sustainability in mind and are using the changed practices and behaviours to drive new revenues.

The common theme running throughout our research findings is the critical importance of mindset.  Postal organizations that achieve high performance appear to have a mindset that actively seeks out potential opportunities. Whatever changes occur in their operating environment and the broad marketplace, they are willing to challenge the fundamentals of their business to grow.  It is this proactive “survival of the fittest” mentality which is perhaps the greatest asset in the path to achieving high performance.

The advantage of ambition

A final critical factor that arises from our analysis of postal organizations that achieve high performance is ambition.  Associated with mindset, ambition is the starting point for growth and progress.  Today, postal organizations are operating in very different environments with some still largely under the control of government and many needing to accommodate the needs of the private sector marketplace.  This environment provides the context for each post; the balance of focus between social service provider and commercial business; between doing the same better and diversifying into new business areas.  However, with the volume decline that has been experienced as a result of the global economic recession, it is clear that continuing to do the same but better is not enough.

Cost reduction alone will not ensure survival -diversification must be a consideration in every postal organization’s strategy.  By recognizing the importance of diversification, postal organizations can take action and target the future aspirations for their business.  By establishing positive future goals, based on a core ambition to succeed, postal organizations can generate the energy, enthusiasm and commitment that is needed to emerge from this difficult economic period with a sustainable business that sets the standard for achieving high performance.

Want to know more?

For a copy of the research findings Achieving High Performance in the Postal Industry: Accenture Research and Insights 2010 visit accenture.com or contact the report’s authors Brian Moran, managing director of Accenture’s postal industry group, at brian.j.moran@accenture.com or Vineet Narang, postal industry program manager within Accenture at vineet.narang@accenture.com.

Mail has come a long way in the 800 years that have passed since the era of Robin Hood and co., but, you can’t deny the efficiency of the key method of mailing from that time. In a day where we regularly hear the buzzwords: smartphones, e-mail, hybrid mail, and so on and so forth, the fact that up to 2,000 years ago, people were able to pass messages to each other via pigeons is quite astonishing - and more often that not over a distance of hundreds of miles. Furthermore, looking back as late as the First World War, pigeon carriers were crucial during battles, and their correspondence often made the difference between defeat and victory.

Pigeons are effective carriers due to their natural homing abilities. The bird in question would be transported in a cage from a said destination, and once released, would return directly to where it considers home, carrying a message, usually attached to its leg.

According to encyclopedia entries, the method of mail delivery probably began during the Persian period, with the Romans later using pigeons during their vast and fruitful military expeditions more than two millennia ago. Levi Wendell suggests in The Pigeon, that Julius Caesar used the homing pigeons during his conquest of Gaul. The methodology was also prominent in Baghdad during the 1100s.

As the centuries passed, pigeons remained the key messaging service, as noted in the diary of naval chaplain Henry Tongue, who described a regular service being used between merchants in the Levant during the 17^th century.

There was a renaissance in the training of pigeons being used for military purposes after they were deployed successfully during the siege of Paris during the 1870-1 Franco-Prussian War. With the Prussian army encircling the French capital, and cutting all telegraph lines, as well as refusing entry or shooting postmen trying to enter with mail, pigeon post remained the sole way to communicate with officials inside the besieged city. Thousands of messages were delivered. Later, a number of European countries founded societies that specialised in raising and training the birds as a result of its success.

In 1987, a Mr Howie’s Pigeon Post service was launched, which was the first regular air mail service in the world. It connected New Zealand’s Auckland suburb of Newton with Great Barrier Island. It is also believed that from this service derived the world’s first air mail stamps.

Into the 20^th century, and during the Great War, one homing pigeon, named Cher Ami, was awarded the French Croix de Guerre after delivering 12 messages whilst suffering with terrible injuries. Thirty-two birds were awarded the Dickin Medal during the Second World War, for gallantry and bravery in saving human lives with their actions. The list included the Irish Paddy and the American GI Joe. Homing pigeons were extensively used throughout Operation Market Garden and the Normandy invasions, two of the key battles fought during the six year conflict. Throughout Operation Market Garden, the pigeons were used as intelligence vectors for local resistance agents, with their loft situated in London, 240 miles away. During the invasion of Normandy the birds carried vital information to troops in France, and were used instead a radio service, which was made redundant due to the threat of interception.

One of the last pigeon post services to be active was in the Orissa state of eastern India - used as a communication service in case of natural disasters in the region. This service was discontinued in 2002 due to the growth of the Internet.

It took more than 2,000 years for mankind to develop a quicker form of mail delivery than pigeon post, which is quite remarkable. So maybe next time you are left fuming because your important letter has not arrived, investing in a pigeon could be the way to go.

This article was published in June 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here

Posts are evolving into integrated communications services providers. The Universal Postal Union (UPU) has created a three pillar model:

-the classic universal service of letters up to 2kg and parcels up to 20kg

-postal financial services

-secured electronic postal services including postal registered e mail and electronic certification marks

As the declared postal role widens, so the legal and regulatory framework needs to reflect national and global best practices; and access should be granted to all, not just national posts, on an equal and non-discriminatory basis.

Developments so far

The 2004 UPU Bucharest Congress took the first step in extending postal service provision into the internet, culminating in the recent agreement between the UPU and ICANN to sponsor a new top level domain, dot-post (.post).  As Ahmed Kada explains in the previous article, this will allow postal operators designated by the member countries of the UPU worldwide to offer new services to their customers, such as hybrid mail, secured and registered services, yellow pages and electronic certification marks. Postal universal service is being extended into the internet, on a global and universal scale.

The posts’ must be in the Internet

Postal service provision is based on trust. The integrity and privacy of correspondence is a fundamental and universal right safeguarded by postal services globally, adhering to highly regulated and standardised principles.

I would argue that the sole purpose of a postal service is to provide an infrastructure which enables global communication.  With the advent of Information and Communications Technologies (ICT) the extension of the postal value chain upstream and downstream, and the provision of new services, make the extension of postal services into the internet unavoidable.

The framework, principles and policies developed by the UPU envisage an infrastructure in which the integrity of the document (whether digital or physical), the authenticity of the parties involved (senders and recipients) and the privacy of the communication are secured. All this takes place in an exclusive, regulated environment, provided by postal services globally.

However, there is a challenge here.  There are issues to be addressed before we can be confident this brave new world will unfold in the best interests of all.

Unanswered questions:

Is this new development exclusive to designated operators?

Limiting this extension of postal service provision to a pre-selected group of postal service providers, typically the national postal operator in each country, would lead to the creation of a new reserved postal service area. This would contravene policies and regulations.

Postal service providers not designated by UPU member countries must be provided with equal access on a non-discriminatory basis.

What is the legal and regulatory framework?

This needs to be developed and implemented in parallel with the policies drafted by the UPU at the national level.

What are the standards and principles for access to this exclusive postal network on the internet?

These need to be determined so that all postal service providers, designated and non-designated, are given equal access according to clear and transparent status, standards and principles.

Is the UPU as the sponsor of the framework and domain best positioned?

The UPU is going through a major transition period. The 2004 and 2008 Congresses led the way into new services.

In these circumstances the role of the UPU as an inter-governmental organisation driving the extension of postal service provision requires a structural adaptation, with the involvement of those postal service providers who are not currently represented within the membership of the UPU.

The UPU also needs to include technology providers and customer organisations on a wider basis and allow them to play a much more active role in the reshaping of global infrastructure in a way which is fit for purpose to serve everyone in the field of secured communication services.

Yes, posts should and must extend into the internet. But the rules have to change to ensure that there is proper inclusion of all interested parties.

There is an old joke I heard when I was in college. It goes like this: Two guys decide to start a wholesale potato business. They get a truck, and from a farmer they buy a load of potatoes at fifty cents a pound. When they get to town, they sell the potatoes to the grocer for fifty cents a pound. They operate the business like this for a few weeks and then tally their profits. Realising they have none; one guy turns to the other and says: “Do you think we should get a bigger truck?”

It is a silly story, but it raises a valid strategic point for postal services around the world that are fighting for their financial survival. When facing fundamental challenges to a business model, it is crucial to ask the right question.

Financial challenges

For today’s posts that imperative to ask the right question is more important than ever. Around the world, posts are struggling with declining mail volumes due to digital alternatives plus competition after liberalisation in European postal markets. Earlier this year, the Dutch post and express delivery group TNT reported lower earnings, stating cost cuts and cash generation would remain a focus. TNT is not the only European postal company to do so.

The financial woes faced by the USPS mirror those of its European counterparts. Yet, unlike other posts around the world, the USPS’s business model is restricted by statute and is dependent on its monopoly of letter delivery and competition in parcels for survival.

The financial challenges of posts around the world promise to have a profound impact on mailers, employees, consumers and potentially national budgets. Postal leaders are exploring cost cutting and revenue generating alternatives that will help alleviate these financial pressures. Similar to the two guys and the potato truck, something fundamental has to change in postal operating models.

Rethinking postal operating models

Some of the questions being asked these days are: How can I cut my costs to adjust for lower mail volumes? How can I stimulate volume? How can I reduce labour hours without disrupting my labour force and quality of service? How can I close offices without enraging consumers and local elected officials? What are the legal adjacent spaces where I can gain market entry and compete?

Traditional answers to these questions are steeped in the historical role of postal services.  Mail binds a nation together. Mail connects citizens to their government, to each other, and to the companies that want to do business with them. Mail provides a trusted, secure, and universal method of communicating confidential information around the corner or across the country. And yet with ubiquitous wired and wireless broadband, less expensive laptops, netbooks, and smartphones; email, texting, IMs, Facebook, Twitter, ooVoo, and most recently the iPad, there are now numerous digital alternatives available to businesses, governments and consumers to exchange information and build relationships.

Trends in history

With this trend in mind, I am reminded of Henry Adams’ essay The Virgin and the Dynamo. When Adams visited the Great Exposition in Paris in 1900 he was awestruck by the dawning electric civilisation of the twentieth century and the inherent cultural disruption it portended– in contrast to the motive force symbolised by the great medieval cathedrals and centuries of cultural stability in a largely agrarian society.

If Adams were alive today and he was a postal executive, would his essay now be entitled The Mailbox and the iPad? In many regards, postal executives are awestruck by the dawning globally interconnected society of the twenty-first century and the inherent cultural and business disruptions it portends– in contrast to the centuries of stability of the legacy postal business model.

As important as these questions and ponderings of postal executives is, I think, the critical assessment framework which comes from Harvard Business School strategist Clayton Christensen. Christensen, who advises companies facing disruptive competitive pressures, focuses on understanding why customers “hire” their product. For postal operators, that means asking what job is the mail being hired to do? Or conversely, why is mail being fired?  And who is responsible for the hiring and the firing?

The importance of the customer’s customers

Postal executives are focused on their customers: the mailers and primarily business entities that pay for postage and shipping. But what about the customer’s customers, the people receiving that letter or package? They are traditionally viewed as a cost of doing business, represented by distribution expenses, labour expenses, fuel, wear and tear, among others. But it is the customer’s customers who order the packages. It is the customer’s customers that ultimately determine if they want physical mail or digital alternatives. They are ultimately responsible for the hiring and firing.

It is therefore incumbent upon posts, mailers, and their technology and services suppliers to work in concert to develop offerings that create more value for the customer’s customers as well as the mailers. Fortunately, mailing technology is also advancing to the point that mailers and consumers can increasingly get exactly what they want and need from the mail channel, and therefore will become more likely to “re-hire” mail for future communications.

For the mailer it is obvious - reducing barriers to attract, retain, and serve customers while reducing costs.  For the consumer, in the face of a jobs crisis, credit crisis, health care crisis, and retirement crisis - mail helps them manage their lives.

Transpromo

One good example of the application of mailing technology that benefits mailers and consumers is when a transactional statement is combined with key attributes of a direct mail piece, often called Transpromo technologies. What makes Transpromo unique is its ability to combine variable content, or data from different sources, into one stream of information on a customer. What makes Transpromo most valuable is the combination of a highly trusted document such as a banking statement, credit card statement, tax bill, pension plan or invoice with relevant advice, counsel, and offers in the context of that statement on how customers can best manage their wealth, health, and their lives.

To take the example of healthcare, profitability is linked to a plan member’s health and welfare.  Insurers are incentivised to change the behaviour of their clients for a win-win scenario. Some examples include: for patients to use preventative services through their primary care doctors instead of emergency rooms; to use mail order vs. retail pharmacy; to manage their chronic conditions vs. risking worsened health. A Transpromo document with its high openability and read rate is the perfect context for improving profitability while aligning with the member’s need for medical guidance and counsel on how to better manage this or her life.

The same is true for financial services.  In these days of financial reform banks and investment houses will earn profits from providing better advice to their customers rather than using their assets in risky derivatives and credit default swaps. Forrester Research reports that consumers who see products in the context of their financial situation are ten times more likely to take action. I know of few venues as effective for assessing the context for their financial situation as a well crafted transactional statement.

In addition, Transpromo technologies have matured to the point where they can lower the barriers between the mailer’s marketing, IT, and operations functions to allow customer insight to drive relevant communications, advice, counsel, and offers in these high open rate vehicles. When effectively applied they offer the opportunity for mail to be rehired by both the mailer and the consumer.

Conclusions

In addition to services and technology, mailers also play an important part in today’s digital age. As referenced previously, the contrast of the Mailbox and the iPad holds the key. Many posts view themselves as a pipe between mailers and consumers; however, it is not the only framework within which to find solutions.

From a consumer’s perspective, the Post is a trusted aggregator and consolidator of mail.  Therein is the digital opportunity: where mailers, technology and service providers and posts can lever their assets, capabilities, and brands to repurpose the content inside and outside of the envelope. In this way they can replicate the post’s role as a trusted consolidator and aggregator of mail in a fixed or mobile digital environment. Within this framework, new opportunities exist for posts to play a very relevant role in helping consumers better manage their lives using both physical and digital channels.

This article was published in June 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here

His background in successfully managing mergers led to his appointment as President and CEO of Posten AB in July 2008, as a precursor to taking over the top job in Posten Norden in June 2009 after the formal merger between the Swedish and Danish posts.

Posten Norden had 47,319 employees in 2009 with over 55% coming from Sweden.

The Swedish side of the business handles around 4.5bn items of mail per year (addressed and unaddressed), and Denmark 1.1bn. Around 500,000 parcels per day are also collected and delivered.

Nordstrom confirms that 2009 has been a tough year. Net sales excluding currency and structural changes fell 7%.

Before talking more about market conditions I asked about the merger itself.

Anatomy of a merger

“The merger of Post Danmark A/S and Posten AB is a well timed offensive move. Conditions in the communications and logistics markets are changing due to liberalisation, technological development, internationalisation and environmental issues. The market is facing a structural transformation that will have major consequences for market participants. The merger makes Posten Norden more competitive, thereby arming it to meet the challenges of tougher competition and weakening letter volumes while maintaining high quality postal services in Denmark and Sweden,” Nordstrom explained.

The parent company Posten Norden AB is a Swedish company, owned 60% by the Swedish state and 40% by the Danish state, but with 50:50 voting rights.

The EU required some divestment of Danish parcels operations, which were sold to GLS.

The CEO emphasised that “the two businesses, Mail Sweden and Mail Denmark, will continue to focus on their local markets, but with a clear Nordic offer. Logistics and Information Logistics have a Nordic organisation with a distinct Nordic offer”. At the group level legal, communications, finance, business information solutions (IT), business development, production development, and human resources, are shared.

Nordstrom expressed himself generally pleased with progress to date. “We have made a good start in forming our organisation, finding measures for a joint business planning process, and securing identified synergies.” The business has achieved this “whilst not losing focus on our daily operations and serving our customers well. Our quality has improved from an already high level. Our customers are more satisfied. Our employees are more motivated.”

For the medium term, the focus is on service reach and quality at reasonable prices, and on the development of new services. “We need to be aware that the communications landscape is changing. We have the knowledge and edge to be the best provider of competitive solutions in the Nordic region.”

Managing through the recession

“Our operations have been impacted by extremely low market activity. Our customers have suffered from falling demand, meaning we have had fewer mail items to deliver. The increased focus on costs has also meant that people communicate less and rely more heavily on digital communications channels. This has led to sharply declining volumes and to pressure on prices”, Nordstrom told me.

Posten Norden had seen the signs of market weakening back in the late summer of 2008 and moved forward already planned cost cutting measures as well as identifying new opportunities. Costs were reduced by 4% after adjustment for currency and restructuring charges. SEK1bn of restructuring costs enabled reductions in production capacity, modernisation of the service network, and rationalisation of administration.

Nordstrom added that “the sale of Post Danmark’s share in Belgium Post De Post-La Poste produced a capital gain of SEK2.2bn, allowing us to maintain our stable financial position as we laid the foundations for future essential structural measures and investments. Earnings before tax of SEK2.4bn, although considerably lower than last year, represent a reasonably good result under the circumstances.”

Strategies in communications

On future challenges, Nordstrom explained: “Letter volumes are bound to decrease over a longer period of time. It is our job to find strategies and appropriate means to meet the new market conditions.”

My understanding is that the core Posten Norden strategy is to operate in the wider communications market, not just physical mail: taking input data in any form, providing delivery in any format, and operating across the whole value chain directly and through subsidiaries such as Stralfors.

Nordstrom confirmed that this is indeed the case, arguing “it is actually a logical step. Combining digital and physical solutions increase efficiency for us and for our customers. However, margins are lower and competition is tough … We also have interesting solutions in the Danish E-boks. They provide e-solutions for Danish customers and have had a very good start.”

This leads on naturally to a wider discussion about e-commerce and parcels.

Providing Nordic solutions

“Possession of an attractive, cohesive distance selling offer is a distinct growth area” Nordstrom believes. “This involves being able to manage messaging and logistics flows for businesses as well as meeting buyers’ needs for reliability and ease in receiving their ordered items, and, where necessary, offering a simple, secure, returns process. In Posten Norden, we offer a unique infrastructure for businesses in e-commerce … they can reach customers in all the Nordic countries except Iceland.”

This Nordic wide approach applies also to the B2B parcels business: Posten Norden is aiming for “further development of an integrated Nordic logistics offer”, whilst also serving the needs of local markets.

Nordstrom also sees the post’s retail outlets as convenient pick up points for parcels. Unlike many posts he has no plans to extend into financial services. It is not a natural part of the core business.

Whilst some parts of the company operate on a global basis, it is clear from our discussion that the Nordics is the primary focus. “A growing number of logistics purchasers view the Nordic region as one market, geographically large but with limited volumes due to a relatively low population … It will be of increasing strategic importance to have the capacity to capture flows from other parts of the world into the Nordics via strategic European hubs, and to offer corresponding solutions from the Nordics”, is how the CEO summarised the approach.

Competition and trust

I am particularly interested in Nordstrom’s views on competition, given that the Swedish mail market has been fully liberalised for almost 20 years, and Citymail has been a high profile competitor.

“First of all it is important to know that …. Bring Citymail is owned by the Norwegian state-owned Posten Norge which holds a monopoly in its home market”, is his forthright opening statement. “Faced with ‘liberalisation’ or deregulation, new national regulations for European postal markets are being formulated. There is a significant risk that these regulations will show greater consideration to satisfying national special interests than in ensuring fair market conditions and a level playing field. Such an outcome would benefit neither our customers nor postal operators and their owners.”

So what advice would he offer to posts facing full liberalisation?  He told me “they need to describe the actual market situation and what short term and long term effects they foresee. Not only are we facing a dramatic change in the market, but also we risk being discriminated through new regulations that will for sure impede sound development.”

A major theme from the World Mail & Express Europe conference was trust, so I asked Nordstrom how important he sees this as an attribute for his organisation. His response: “Trust is a clearly defined customer benefit. We deliver it through continued high quality and reliability throughout the value chain, by providing environmentally efficient solutions, and through fulfilling the universal service obligation.”

Priorities

As the interview came to a close, I asked what are the three major priorities for Posten Norden during the next stage of its development.

Nordstrom describes three orientations: customer, performance and profit.

Posten Norden has to “listen to our customers and meet their communications and logistics needs with the highest standards of quality and cost efficiency”.

Performance orientation means “we must always act in our customers’ best interests, resulting in excellent service for our customers and ensuring Posten Norden’s short and long term competitiveness”.

And finally, the focus on profit: “Posten Norden can offer its customers attractive communications and logistics services thanks to the strong cost consciousness that pervades the whole group. This serves as the basis for stable financial development that in turn yields good returns for the owners and enables investment in new technologies, new services, and climate efficient distribution solutions.”

I was left in no doubt that Posten Norden, led by Lars Nordstrom, is focused on success.

This article was published in June 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here

Over the years I have held Commercial, Operation and Technical roles at Director level in the Postal Industry and have extensive experience of successfully delivering complex information systems. It has always been difficult to pin a “label” on exactly what I do. Although my business experience covers a number of industries lets take “postal” as an example.

On the business side of the Postal sector we talk about things like “Last Mile Solutions”, “Hybrid Products”, “Designated Postal Operators”, “Terminal Dues” and “Liberalisation” which are terms that are fully understood within the industry but Gobbledegook to an IT analyst trying to design a new application.

The IT sector talks about things like “CMMi Level 5″, “BPMN Business Process Modelling Notation”, “Client Server”, “Next Generation Networks” which is Gobbledegook to a Business Manager.

I understand both these domains intimately and can speak both “langauges” and translate between the business and the IT solution provider.

However translation in itself is not enough. A “postal” operator is looking to improve its business processes and become more competititive than the other operators in the industry. There is therefore often a need to re-engineer and improve the information processes before automating them!

This is my world. I think in terms of “logical data structures”, “entity life histories”, “Data Flow Diagrams”, “third normal form analysis” and “psuedo code”. This help me make sense of the business in information terms and allows me to understand improvement opportunities. You might be familiar with old style tools in this field like SSADM and IEW. I would never talk to Business or Technology Solutions people in this language because it would not be understood and would only confuse. However it is an excellent business langauge to use between a business analyst working for the Business and a business analyst working for the IT solution provider.

So actually I am a “Domain Engineer” and not just a “Domain Expert”. If you are looking for information solutions and your IT solution providers dont get it - why not give me a call and I will help you understand and then translate. This is the best way to avoid the type of application system disasters that are only too common these days

So I might redesign my business cards this weekend and call myself a “Domain Engineer” I would really like to hear from you and understand whether this makes sense to you ? Please let me have your views richard.wishart@del-mgt.com

An average of 34% of B2B companies in the UK, France and Germany indicated that they have put personalised messages on bills, statements and customer service communications. This trend is also reflected outside Europe, with the USA recording a similar figure of 31%.

Business executives are exposed to multiple advertising messages in the same way as consumers. Messages communicated via transactional mail, a medium trusted by recipients, are better equipped to catch the attention of the recipient. As the report shows, businesses are realising that adding marketing messages to transactional documents that are already being despatched has the potential to generate significant revenue. Alternatively, the Transpromo technique can be used to simply inform the customer of new or complimentary products and services; policies or other useful information. At a time when every business is under pressure to generate revenue, transpromo gives companies the opportunity to increase their productivity through cross-selling.

The report reveals that the rise of transpromo is not confined to larger businesses - businesses of all sizes are reaping the benefits - though they might implement transpromo techniques differently. Transpromo has the flexibility to be used in a variety of ways - inserts can be included in the envelope or information can be embedded in the document itself, for example.

Transpromo is an evolving marketing tool and the survey results show that the B2B community is already excited about the possibilities provided by new Transpromo technologies such as full colour envelope printers.

Hina Sharma, head of brand and content development, Pitney Bowes, said: “Whilst transpromo has been widely discussed in the media and in business circles, these findings show that it is now a reality. Previously, much of the focus has centred on transpromo being used to communicate with consumers. These findings clearly show that this view neglects the wider appeal of transpromo to target business decision makers - transpromo is being used by the B2B community, in the same way as by those targeting consumers.”

To view the report, click here

The “Postal Innovation” concept is about physical, virtual and financial postal services in a trusted environment. Posts that have adopted this model have achieved good financial results despite the recession. The so called threat of “physical substitution” is in fact a myth. On a recent visit to Abu Dhabi, Richard Wishart gave a TV interview on this topic.

http://www.idworldabudhabi.com/index.php?id=richardwishart_vid10ad

“Retailers need to start planning now if they are to take advantage of both the opportunities and challenges the VAT rise will bring, and this is likely to have a major impact on the logistics sector,” according to Dan Derry, managing director of OPS. “With the tax changes occurring in the middle of the peak, (note:  Peak is Oct to early Dec; VAT is not until Jan) this will not only encourage the consumer to buy earlier this year to beat the rise but also create spikes in the demand to put increased pressure on the supply chain.”

Consumer trends show that consumers tend to avoid paying extra tax by buying large ticket items before any tax increases, such as the 2.5% rise in VAT that was announced by Chancellor of the Exchequer George Osbourne. With the increase planned for 4^th January, this will coincide with the Christmas peak and therefore affect usual buying habits.

The paper explains that in order to meet this change, businesses need to ensure that their respective supply chains have the flexibility to meet these future challenges. Companies must review their entire supply chain to ensure they have the best value for money approach and can ensure customer satisfaction, whilst having the adaptability to quickly meet a changing economic climate. Those that follow this process will be in a much stronger position to weather any downturn, which might materialise.

“The biggest challenge this year is not only coping with an unusual peak but also the subsequent slump,” explains Derry. “Post Christmas can always be a hit or miss affair, depending upon sales and consumer response, but this year we predict it to be quieter than normal, as consumer spending habits change in line with the effects of the budget and because people have less disposable money available. Therefore, logistics operations need to be planning ahead and being proactive to find alternative uses for supply chain resources or looking where infrastructures can be streamlined.”

The full white paper can be obtained via the OPS Logistics Consultancy website www.opslc.com.

To visit OPS Logistics Consultancy’s P&P directory listing, click here.

-Brand boosters

-Performance analytics

-Coupon comeback

-Clubbing

-Social networks and tomorrow’s spenders

Brand boosters: Many brands are changing the focus of attention from one way communications to interactive assistance. Convenience loving customers now expect to receive supporting services and ‘brand boosters’ have recognised the value of providing them. The USPS has created an online virtual simulator that allows customers to check the size of objects for posting against standard parcel sizes.

Performance analytics: Performance optimisation is now at the heart of business objectives; without the right data management must steer through business blind-spots. Whether the focus is on cutting out waste or achieving growth doesn’t matter, performance data and measurement is gaining importance in every aspect of business life. The beauty of modern communications systems is analytics that have depth. Joined-up customer communications requires multi media channels to work effectively together; that means networks are expected more and more to provide usage and event data plus management reports and analysis tools.

Coupon comeback: Vouchers and loyalty schemes are making a comeback; with new technology coupons are being transforming into a cutting-edge customer favourite. It is hard to think of another marketing tool that can deliver such consistent returns with their ability to increase footfall and basket size, to cross-sell and to introduce consumers to new products. Coupons having unique serial numbers and offering a choice of activation methods, counter, mobile and online, can motivate customers and collect essential data. Coupons provide a gateway to long lasting customer relationships and the opportunity of promoting new and innovative solutions.

Clubbing: Membership card-carrying is still rising. Once signed up for something of value, made a commitment, the relationship becomes strong and takes on part of the customers’ identity. This is equally true in the business world. Business clubbing works best when they offer more than simply access to a service; when they unite customer groups with a common goal or experience. Think of interest groups, professional groups, and travel groups, for example. There is another advantage of club building and that is loyalty.

Social networks and tomorrow’s spenders: Teenage spending power appears to be defying the trends; proving a resilient and lucrative market during the downturn. Media-savvy, continually connected, today’s teenagers are fickle as they flit between communications channels, latch on to trends, explore social networks and virtual worlds, but view much of the advertising with scepticism. Comfortable with technology, opinionated and hard to please, winning them over is a challenge and an opportunity. Teenagers appreciate the qualities of mail; however, solution providers must connect with teenagers in their own environment offering relevance and intrigue. Companies have to combine the right brand with the right message in a transparent and honest way - appropriate to the age group and surroundings. Fashion retailers, mobile phone operators and multimedia service providers are just a few of the industries offering life style support to this important customer group.

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In this exclusive series of six parts on customers and the postal sector we looked at the importance of insight, its’ relevance to developing a strong business strategy and to cost cutting. We also discussed putting customers at the centre of operations and the importance of aligning postal sector success factors with the needs of customers. Finally we reviewed five essential management tools for improving customer focus and five key customer trends to watch.

Dennis Gilham: Biography

A Chartered Engineer and Fellow of the Chartered Institute of Marketing with over 30 years experience of delivering customer facing solutions in the postal sector. Dennis has held senior industry roles as Head of Corporate Partnerships, Group Business Line Director, Group Director of Product Marketing and Director of Research & Development. He has built a unique set of skills and knowledge in promoting new solutions for business customers of all sizes in mail, express and parcels.

Having worked with Posts worldwide, contributing to their business development through customer insight, marketing strategy and innovative solutions, Dennis now has the opportunity to help postal management in his capacity as Independent Strategy Advisor.

+44 (0)79 74 97 50 00

dg.concretconsult@talktalk.net

The date was very significant for Estonia Post, following the launch of the state enterprise Estonia Post Ltd on 1 June. We had to build up a comprehensive postal service and restore the traditions of a trustful and customer friendly postal company; and to develop a new approach to the provision of up to date postal services. Gaining understanding of new goals and a new corporate culture amongst employees was also a big challenge.

We received a lot of support from our Nordic neighbours to help increase quality of service and to update our processes to meet European requirements. It was hard work: for example, in the course of the transition process, problems occurred with regards to the means of postal payment. The rouble denominated stamps provided by Moscow ran out before new stamps had been printed.

Furthermore, in a rapidly changing and developing society, traditional postal services were no longer profitable and volumes dropped significantly. A number of new services were implemented in 1993 and 1994. These allowed an increase in profitability to be achieved.

Facts and figures

Estonia Post Ltd employs 3,200 people. The company has almost 400 post offices.

The Group includes subsidiaries Estonian Electronic Mail Ltd (50.86% of shares) and Estonian E-Invoicing Center LLC (50.1%). Through Estonian Electronic Mail the Post has 33.3% of the shares of Elektronpost.kz in Kazakhstan.

Letter volumes have been declining annually by up to 10%. We regard high penetration of different e-services as the reason for this decline. Development of e-services is our priority considering the large number of Internet users and nationwide mobile network coverage.

We are also focusing strongly on developing logistics services include parcels, express and warehousing. Although the overall economic situation and declining volumes have influenced our results negatively in recent years, we have made profits in 2008 and 2009.

About 45m letters were sent in 2009, which is nearly 15% less than in 2008. For the coming period we expect a 7-10% decrease. The total domestic parcels market is some 3.5m items a year.

The Universal Service Obligation

The USO is defined in the postal act as the continued and high quality provision of postal services at an affordable price throughout the whole territory of the Republic of Estonia, for correspondence up to 2 kilos and for parcels up to 20 kilos as well as registered and insured items.

Ordinary letter mail is delivered to residents’ post-boxes, and registered mail to recipients against a personal signature. Parcels are delivered according to customer requirements: to the home or to the nearest post office or the customer can collect from the delivery centre.

Delivery of letters is five days a week, and for newspapers six days.

The Post is 100% state owned. Privatisation is one of the possible options for the future. Our main activity is regulated by the Estonian Competition Board.

The impact of the recession

The Estonian economy was hit not only by the global financial crisis but also by a period of overheating in the national economy along with the bursting of the property bubble when the country’s two main banks tightened lending conditions.

GDP dropped by 14% in 2009 and the unemployment rate rose to 13.8%. However, a full fledged crisis was avoided due to existing buffers and a determined response by both the public and private sectors. In 2010 we expect a 0.9% rise in GDP.

In both 2006 and 2007, Estonian Post was not profitable even though the economy was booming. In the second half of 2007 and in 2008 we made major structural changes which helped us during the downturn and to make us profitable in 2008 and 2009.

Responding to competition in parcels and letters

We have more than 30 competitors in the express segment. As the market is so fragmented our strategy is to remain competitive and to sustain our market leader position by investing in technological solutions and by widening our service range. We have moved into pallet transportation and warehousing including value added services. Our technology investments are intended to enhance customer service levels and the overall visibility in our value chain, including track and trace and EDI.

For one of our main competences, the B2C segment, we are planning to offer different delivery options to provide recipients with more choice. We are strong in door-to-door deliveries and we have improved our delivery service to outlets. The next step is to offer automated delivery machines.

All our main express services are available over the Internet for both business and retail customers. Of course we utilise our extensive door-to-door delivery network covering all addresses in Estonia, and the largest network of delivery points in our post offices. We have to a great extent redesigned both of our networks to reduce costs and to offer cost efficient services to our customers.

In direct mail services, we have managed to leverage the product portfolio with new added value services such as database management, address validation and print services.

Last but not least we have also learned from the market that high level quality has always been the standard for selling direct mail services. This is why we measure quality regularly and take into account any client feedback received through market analysis or everyday operations.

Other posts are actively represented in our market. Itella, Bring (Norwegian Post) and Posten Norden are all involved in express and logistics. One of our main competitors in the domestic express segment is DPD, and of course we have all the global brands such as DHL, TNBT and UPS represented here in Estonia.

Developing a Baltic strategy

Due to economic changes in our region many of our domestic customers are changing their strategy. More and more distribution is now centred on one location for the Baltic region, and in these circumstances companies demand pan-Baltic distribution services. Another regional trend is that many Estonian companies, especially e-tailers and distance sellers, are looking for market expansion and the main target is the other Baltic countries. The third driving force is the global trend to supply chain disintermediation and the growth of B2C.

Estonian Post’s strategy is therefore to cover a larger region with unified services. We want to offer the same service levels and customer interfaces in all Baltic countries. Our plan is to extend our parcels services to Latvia and Lithuania, with door to door deliveries by couriers, and deliveries to collection points, including automated delivery machines.

Search for partners

As the Estonian market is relatively small from a European perspective we also see that, by covering a larger region, we can be a more attractive partner for global operators. Our aim is to integrate into a global network to obtain the economies of scale and of scope that are so crucial in the logistics industry. We are looking for alternative partnerships to improve our services for parcels.

Partnerships with strong companies in the fields of web services and database management, as well as business development, will give us greater confidence. In e-commerce we envisage partnerships with webshop application providers and integration of e-shopping companies with our logistics and database services.

Other products and services

Estonian Post’s e-invoicing operator eArvekeskus has developed an e-invoicing platform which makes it possible to enter the paperless bookkeeping era.

My Mark is an Estonian Post e-service where it is possible to order your very own postage stamp from photos.

Financial services are not our first priority and only 7-8% of our revenue comes from the provision of financial services. We offer delivery of pensions and post bank services in co-operation with SEB. We mediate different payments and we offer domestic and international money order services as well as Western Union.

The future

E-services are one of the key opportunities on a five to 10 year time horizon: e-invoices, e-document management, e-receipt, e-delivery order; or mobile based services integrated with web based solutions and secure authentication.

What is as challenging as e-services is database management such as address databases, geographic co-ordinates, different registers and CRM databases. Here data protection will be the key issue.

Since there is still a lot of paper in circulation, we will also offer document digitalisation services and hybrid mail solutions for direct marketing.

This article was published in June 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here.

-           Customer complaints logs and analysis

-           Customer journey maps

-            Insight demonstration

-            Website optimisation

-            Business planning charts

Customer complaints logs and analysis: When customers take the time to complain they are taking the time to tell us what went wrong with our service. The industry can ill afford to lose committed customers and it is sensible working to keep customers rather than trying to replace them. Answering, analysing and acting on complaints improve customer focus.

We need to listen for the customer need or want behind the complaint; it can actually be the inspiration for a new idea or a new way to approach a problem.  It takes real talent to listen and reframe a complaint to discover the gem inside; whilst maintaining its basic meaning, reframing presents the complaint in a way that is more likely to find a resolution.

Complaints need to be managed effectively. One way is triage by level of importance (value of customer) and significance (value of complaint) plus dedicated and empowered response teams. Many straight forward complaints can then be quickly resolved following simple guidelines. Otherwise complaints get escalated for a managed response or executive decision. Log all complaints, analyse and act to avoid repetition.

Customer journey maps: Wouldn’t it be nice to better understand interactions with the organisation from the customer’s point of view? Mapping the customer journey allows us to anticipate problems and helps us to identify improvements to our products and services.

The five steps to map the customer journey: 1) collect internal information; inputs, touch points and insights; 2) develop first ideas about customers’ interactions to test; 3) research customer processes, experiences, needs, wants and perceptions; 4) analyse research results; and 5) map the customer journey.

To get the most from these maps, share and review findings, incentivise action and new ideas and improve the picture over time.

Insight demonstration: Customer insight specific to an organisation is valuable. Business processes can be aligned to deliver ideas, predictions and demonstrations of value. Steps: 1) imagine value - create lots of ideas that offer new customer benefits and rejuvenate the existing value proposition; requires setting challenging boundaries based on customer insight together with an igniting purpose, productive capacity and a co-operative mindset; 2) predict value - research customer preferences and intentions using comparisons, historical models and concept testing to better predict uptake and contribution from promising new ideas; 3) demonstrate value - systematic approach to gathering evidence and building a business case with emphasis on key data and influences (e.g. competitors moves and trends); and 4) learn and improve - feed-back at each step with rigour of analysis, results monitoring, post-phase reviews and driving down waste; lost time, scrapped projects and re-work.

Website optimisation: The world is changing with new tools although the same rules apply when it comes to customer experience. Many websites fail to achieve a dialogue with the customer or the response is too slow. Customers have two important needs when it comes to online experience; personalisation and performance.

Online conversations require relevant messages, text or images that improve the perception of the business. The right landing page and ‘call to action’ on each page are critical for success. A personalised URL (PURL) is a web address that is unique to each individual customer and can be integrated into direct mail campaigns or assigned during an online registration or sign-up. Multiple versions of websites can be created for different customer groups and personalised with slightly different content.

Website tools are readily available for optimisation and providing useful customer analytics. These include tools for testing the speed of a website; after 3 seconds there is exponential drop-off. Images can be compressed plus comparisons between alternative versions and best-in-class websites.

Analytics helps provide consistent views about customers, joined-up services and flag online problems that need to be fixed; it’s about optimising the customer web journey and content experience.

Business planning chart: One of the most challenging tasks for any business is to get everyone in the organisation working from the same page. The best way to keep the team in tune with a customer-relationship plan is to map it out on a single sheet. A strategic plan has a better chance of success when it’s shared and easy to understand by everyone. Using connected bullets: 1) put this year’s two or three big objectives straight across the top of the page (better customer service, stronger branding…); 2) position the goals (cut complaints by half, grow online business by 50%…) beneath with arrows connecting to the appropriate objectives; 3) on the third row describe and connect the strategies required to reach these goals (assign executive sponsor and fix top complaints, add training in active listening…); 4) list the tactics to be used to execute those strategies (launch online expert help, use customer experience surveys, re-engineer customer response processes, deploy new front line support tools, develop certification system…)

A detailed strategic plan can be too complex in word-driven format; it’s easier for everyone to understand when it’s a single page chart.

Next time, the last in this series, we consider five essential customer trends that the postal sector cannot ignore.

Dennis Gilham: Biography

A Chartered Engineer and Fellow of the Chartered Institute of Marketing with over 30 years experience of delivering customer facing solutions in the postal sector. Dennis has held senior industry roles as Head of Corporate Partnerships, Group Business Line Director, Group Director of Product Marketing and Director of Research & Development. He has built a unique set of skills and knowledge in promoting new solutions for business customers of all sizes in mail, express and parcels.

Having worked with Posts worldwide, contributing to their business development through customer insight, marketing strategy and innovative solutions, Dennis now has the opportunity to help postal management in his capacity as Independent Strategy Advisor.

+44 (0)79 74 97 50 00

dg.concretconsult@talktalk.net

What will they want to ask Royal Mail before deciding whether to pursue the opportunity of taking a 49% stake?  We have pulled together the key 10 questions we would ask if we had them in the Dragon’s Den?

• How would I get my investment back? If I needed the cash in future how can I exit the arrangement?
• What exactly do you need a cash injection for, and what return on investment would that cash give to the Royal Mail Group?
• What is your dividend strategy?
• What controls on the business will remain with the 51% shareholder ie the State?
• How do you expect to control or cap cash calls from your pension funds?
• How many of a) your senior managers and b) all your employees to you expect to hold shares? Will your senior managers be buying shares themselves?
• What are your profit and volume and cash flow projections for the next 5 years?
• What certainty do you have over the regulatory regime for the next five years, particularly in relation to price control?
• What are your future plans for your GLS parcels subsidiary, given it contributes such a disproportionate part of your profits?
• Will the Trade Unions cooperate in your future change programmes, given their opposition to this share sale and the fact that the benefits of change will flow back to shareholders?

No doubt we can all think of other questions to ask, but an investor would surely need comforting answers to the vast majority of the above questions to consider an investment seriously?

The real question for all potential investors is why?  What will a minority stake in Royal Mail do for my long term business strategy?  Can I leverage higher returns elsewhere in my business or do I get above average returns from taking the risk in investing in the old state monopoly?

Please comment below…

Green shoots of economic recovery are evident across the world. Is this UPS’s experience? What differences do you see in different regions and countries?

AD: As UPS’s latest quarterly financial results attest, we are indeed beginning to see some green shoots as the global economy starts to recover. However, I think our solid financial performance in the first quarter of fiscal 2010 was driven more by UPS’s ability to fully leverage our global network, manage costs, and increase productivity than by any significant improvement in the economy.

In late 2009, UPS stated that we believed the economic recovery would be gradual and that is exactly what is happening. That said, we are seeing shipping levels begin to rise. Outside the US, UPS’s total average daily volume in quarter one was up 18%, and export volume increased more than 9%. All the major regions of the world experienced export volume improvements, with Asia leading the way, up over 20%, followed by the US and Europe, both of which showed strong year over year gains. Our non-US domestic shipment volume also increased, led by 13% organic growth in Europe, substantially outpacing the market.

UPS has said the company has emerged from the “worst recession in decades leaner, more focused and better positioned”.  However, has the recession altered your company’s long-term aspirations?

AD: If anything the global recession has reaffirmed that UPS is doing exactly what we should be doing, and that we are very well positioned to take advantage of improving global economic trends.

Even throughout the recession UPS continued to make strategic investments in infrastructure, including two new facilities in China and a significant expansion of Worldport, UPS’s all-points international air hub in Louisville, Kentucky.

This August we will celebrate UPS’s 103^rd anniversary. In the century since our founding, UPS has navigated successfully through all manner of economic recessions, and we have always emerged stronger. This recession was no exception. I am very enthusiastic and optimistic about UPS’s future.

What would you say are the main differentiators between you and your global competitors such as FedEx and DHL?

AD: UPS’s key differentiators are our integrated global network, our diverse portfolio of services and solutions, and a human network embedded in the global community with more than one hundred years of experience and insight. Whilst we have some worthy competitors, no other company in our industry can match UPS point-for-point.

How do you intend to grow the business post-recession?

AD: UPS exists primarily for the purpose of helping our customers compete in an ever changing and dynamic global marketplace. While that certainly includes providing transportation services, it also involves managing complex supply chains. It involves providing the right kinds of technological support tools. It involves creating logistics solutions that make our customers more efficient, more flexible and more profitable. These will remain our areas of focus because we know that this is what our customers want and need from UPS, in times of recession as well as in times of prosperity.

Given the current economic situation, are customers opting for a reduced cost deferred service over a more expensive next day delivery service? If so, will this continue after the recession is reversed?

AD: During the height of the recession some shippers chose more economical deferred services when it was feasible, but there was and always will be a need for time critical next day services as well, regardless of the economy. One of UPS’s greatest strengths is our diverse service portfolio, so if our customers’ shipping needs change, we are able to retain their business because we can offer them a wide range of service options.

How important is the growth of e-commerce to UPS?

AD: When the term e-commerce first emerged in the mid-1990s, UPS was already a leader in helping e-tailers connect with their customers. Since then both consumers and businesses have turned increasingly to their computers (and now wireless devices) as a major conduit for buying and selling.

UPS has a relationship with all the major e-businesses, many of which have embedded UPS’s shipping solutions into their online platforms. Most recently UPS introduced industry first applications for the iPhone, iPad, BlackBerry and Google’s Android. These allow customers not only to ship and to track packages with UPS from their wireless devices but also to find the nearest UPS location. It is an old cliché that the world is getting smaller, but it is true, and technology is both the catalyst and the mechanism that is responsible.

Do you still see mail as an important strategic area? Can you summarise your current activities including Mailboxes?

AD: Mail is not a strategic priority for UPS but we have partnered with a handful of postal organisations around the world, including USPS, to handle various aspects of their transportation needs.

The UPS Store and MBE networks are not associated with our postal customers. These retail outlets serve as key access points for the occasional UPS shipper, offering packing supplies, document printing services, access to UPS’s full range of shipping options, and other value added services.

What partnerships do UPS currently have in place, and how important are they to the business?

AD: Where it makes sense UPS operates in some countries through joint ventures with local firms or agencies to ensure delivery coverage. Over time we usually see the business grow to a point where we assume full control but, until that happens, these partnerships are important.

As a global business, are there any particular countries and regions that excite UPS for the future?

AD: While there still are growth opportunities for UPS in the US, the potential for significant and long term growth outside the American market is unparalleled.

As you might expect China represents an incredible opportunity for UPS and we have taken several strategic steps during the last few years to position ourselves as a leader there. In 2005, UPS became the first in its industry to establish wholly owned operations in China. In December 2008 we opened our new international air hub in Shanghai and in February of this year we began operating our new intra-Asia hub in Shenzhen.

Whilst Europe is a fairly mature market for UPS, we still see great opportunities there as we continue to leverage our integrated ground and air network. This served us very well during the recent Icelandic volcanic eruption. While many of our competitors lost the ability to serve their customers during the disruption, UPS was able to fly aircraft into non-impacted airports in Europe and to transport international shipments to their final destinations via our ground network.

What is the single most important objective for your business over the next twelve months?

AD: Coming out of the recession, we have to sustain the enhancements we have made to our cost structure and continue to invest for the future while remaining focused on disciplined, profitable growth. 2009 will go down as one of the most challenging years in UPS’s history, but it also brought about some important changes that will help us capitalise on the growth opportunities ahead.

Given the CO2 factor of the whole industry, what measures do you have in place to be as green friendly as possible?

AD: Earlier this year UPS was recognised by Fortune as one of the top ten global companies in climate innovation, but the substantial commitments UPS is making toward reducing our carbon footprint are not motivated by the desire for environmental awards.

We recognise that as a transportation company we have a special responsibility to do our part. Our long term strategy is to optimise the processes that consume non-renewable resources, but we also understand that UPS is a critical component of our customers’ supply chains, and that we have an obligation to help them operate in a more environmentally sustainable way too.

We continue to supplement our delivery fleet with alternative fuelled vehicles (more than 1,900, the largest in our industry). UPS also operates the youngest fleet of aircraft in our industry, utilising the latest innovations in technology that make our aircraft amongst the quietest and most fuel efficient of any airline in the world. In addition, UPS has committed to reducing the CO2 emissions of our air fleet by another 20% by 2020.

UPS also continues to provide environmentally friendly service options such as Paperless Billing and Paperless Invoice. In 2009, UPS became the first small package carrier to offer its customers the ability to offset the carbon dioxide emissions generated by the transport of their packages within the United States.

We believe these and the other steps that we are taking are important not just for UPS but also for our customers. The global economy depends upon reliable transportation, and part of being reliable is being a good steward of our planet.

Andy Dolny was speaking to Chris Dolan (chris.dolan@triangle.eu.com)

This article was published in June 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here.

In previous parts we looked at the importance of customer insight, its relevance to developing a strong business strategy, and to cost cutting and putting customers at the centre of operations. Now we consider aligning key success factors for the postal sector with the needs of customers.

Key success factors are quality of service (including security), performance and total customer experience. Service bandwidth must increase and adapt according to changes in the needs of customers to stay relevant and valued. Mail has unique attributes for business of all types and sizes as well as consumers young and old. However, the product offer must align with changing needs. Companies rely on digital processes and professional mailers need the services and tools to achieve improved efficiency, visibility and control for their businesses. Consumers are mobile and like social networks.

Many postal products don’t integrate well with modern day business processes and as such have shortcomings and create efficiency problems for mailers. Consequently these products become more vulnerable to substitution - the big threat that the industry is concerned about. The postal network offers physical delivery and payment management. It now needs to complement these two layers with an information layer that can work with digital processes, mobile communications and social networks.

Probably the two most important factors to succeed are having the means to digitally connect with every item of mail that passes through the network (some posts have started) and an open specification that allows partners to innovate the many new applications desired by existing and future customer groups; reference, for example, the iPod and iPad open apps success model.

With considerable investment going in to modernise the postal sector, only targeting performance/cost savings risks failure. Network process excellence on its own will not be enough. Unless new value propositions emerge that meet the needs and wants of customers, competition will ultimately win. Things cannot continue as before and sitting back in hope is not the way. Building a future on customer insight specific to the organisation is a better way.

Next time we look at five essential management tools for improving customer focus.

Dennis Gilham: Biography

A Chartered Engineer and Fellow of the Chartered Institute of Marketing with over 30 years experience of delivering customer facing solutions in the postal sector. Dennis has held senior industry roles as Head of Corporate Partnerships, Group Business Line Director, Group Director of Product Marketing and Director of Research & Development. He has built a unique set of skills and knowledge in promoting new solutions for business customers of all sizes in mail, express and parcels.

Having worked with Posts worldwide, contributing to their business development through customer insight, marketing strategy and innovative solutions, Dennis now has the opportunity to help postal management in his capacity as Independent Strategy Advisor.

+44 (0)79 74 97 50 00

dg.concretconsult@talktalk.net

It is said: “Be obsessed about customers and not markets. A market never paid a bill”. Natural segmentation and brand value are probably top of the most important considerations in becoming customer centric. We don’t segment customers, customers segment themselves; customers have particular needs and wants, and it’s these that identify what group or segment customers are in. So we look for characteristics that describe an important group of customers with common buying motives. In the postal sector this philosophy can be applied to senders of mail, predominantly businesses, and receivers, predominantly consumers.

Once these natural segments are identified an organisation can focus on its real strengths and brand values to develop a unique position and new value propositions. I often see organisations use mail volume, verticals and industries as ways to group customers. Approaches based on needs driven motivators are still in the minority. Consequently, it is difficult to achieve good contextual driven marketing where customers are presented rationale to choose your offer because they can identify with it and use it to get some needed job done.

Start by having conversations with customers to uncover the issues that drive their needs and behaviours, the problems as well as those all important silent needs, for example, more end-to-end visibility, more control over delivery, more process efficiency, more management support… Once segments emerge a sufficient sample of qualified customers can be interviewed to better quantify and build confidence in the results. A structured process is best, tuned to the size and needs of the organisation. The organisation can then become serious about putting customers at the centre of their operations.

Strong marketing strategies align with real customer segments and have tailored offers based on customer insight, these topics are quite tangible. However, it is also important to consider such intangibles, as brand value. Brand is the customer perception of value coming from the organisation and it may not be what the organisation wants. If customer perception is to be aligned with the real strengths of the organisation and positioning of the offer then the brand proposition and value must be well co-ordinated across all operations of the company. Dealing with brand piecemeal is guaranteed to do nothing for the success of the business.

Next time we consider aligning key success factors for the postal sector with the needs of customers.

Dennis Gilham: Biography

A Chartered Engineer and Fellow of the Chartered Institute of Marketing with over 30 years experience of delivering customer facing solutions in the postal sector. Dennis has held senior industry roles as Head of Corporate Partnerships, Group Business Line Director, Group Director of Product Marketing and Director of Research & Development. He has built a unique set of skills and knowledge in promoting new solutions for business customers of all sizes in mail, express and parcels.

Having worked with Posts worldwide, contributing to their business development through customer insight, marketing strategy and innovative solutions, Dennis now has the opportunity to help postal management in his capacity as Independent Strategy Advisor.

+44 (0)79 74 97 50 00

dg.concretconsult@talktalk.net

I was up there to look at how large corporates could make a difference in the health and well-being of these communities, and what their future needs are likely to be. Aging populations are a fact of many communities, however the particular dynamics of these more remote settlements makes this an ever increasing issue for the support systems that are, or are not, in place.

Anyway you may ask what has this got to do with the postal service? One of the things that struck me was the role of the postal service in these remote environments. Not only do they bring the letters and parcels, but they perform a real social service, and one that although may be recognised, may be under threat with cost cutting and potential privatisation of the Royal Mail in the UK. These communities depend on not the content of the mail, but on the contact it brings.

One story was related to a son, living in London, who sends his mother a postcard every week - not that he is on holiday every week but it means that the postman will call at his mother’s house on a regular basis to check and see if she is OK. Is this a good use of the post? Is it value for money? Well, of course not. But for this family it is comfort for all parties and definitely worth the price of a stamp!

With the continuing decline in mail volumes and the increasing dependence on online services, the future of these rural postal services must be under threat, however the need for them is actually increasing as the communities grow older and more dependent. I don’t believe this is a problem solely for the north of Scotland, as recent stories in the press and media in the UK state that loneliness is an increasing problem in all areas of the UK - both town and country. The postal service offers a unique service - both social and commercial and somehow we need to understand how we can keep the service alive and profitable for the future.

Making sure both content and contact is maintained for the good of society, wherever we live.

The ideas ranged from locational services, through sensors and tags to finance and business models. One of the big challenges these entrepreneurs had, was not raising money, but getting interest and support from large corporates that would give them credibility and a testing ground for their concepts. Having a great idea and the funding to turn it into a prototype/pilot is seemingly not enough.

In years gone by, many organisations had an R&D department or at least someone who actively sought out the sometimes wild and wacky - sadly these days are gone. So this begs the question “how is the industry going to innovate if it is disconnected from the cutting edge?”. I am sure the response would be “that the industry isn’t set up to deal with the potential disruption that these entrepreneurs would bring”, however I would argue that this is exactly what the industry needs.

For too long it has relied on ideas from within the industry itself which has led to a period of idea stagnation - nothing really new coming through the pipeline. Ok there has been some initiatives which have thrown up some interesting ideas, but most have been incremental and there has nothing that is going to change the industry. If we look back, the postal and logistics industries were hotbeds of innovation - and today they are becoming, or have become, dinosaurs of efficiency which are being out-evolved by the mammals of the online world.

So I put forward a challenge to find the postal entrepreneurs of the future - those people with the foresight and vision to drive the industry forward. These will typically not be people from within the industry, which is where the awards etc. are focused today, but the students, the academics, and the true entrepreneurs, who are looking for the next challenge. Let’s rebuild that innovative culture, the curiosity to find the new and interesting and save the industry from extinction!

So customer knowledge that is valuable to an organisation is an insight. You may already be familiar with the framework used to see if a piece of customer knowledge is really valuable to an organisation:

-      Does it have the capability to act upon this knowledge?

-      Can it use this knowledge to respond to an important business challenge or opportunity?

-      Is this knowledge pretty well limited to the organisation?

-      Is it difficult or costly for others to follow?

It is surprising how much knowledge already exists embedded within an organisation or is available given the inclination to research and acquire it. For example, data about unmet customers needs, coming from complaints or exploratory conversations with qualified customers to uncover silent needs. Compiling and analysing data from multiple sources to build better customer understanding; given that change in organisational culture may be necessary as well as new tools for sharing knowledge. Building ideas about meaningful customer segments and generating probable new value propositions to evaluate through market concept testing and learning.

Since markets are dynamic with customer needs evolving and changing all the time, the opportunity of gaining new customer insight is considerable although in practice discovering valuable insight to the organisation is hard and is best served by using a structured process for data scanning, analysis and evaluation. However, ad hoc programs using experts to address specific requirements are often worthwhile.

A good starting point is to assess senior managers’ current understanding of their organisation’s business environment. Improved self awareness will help identify the changes needed, in particular becoming more customer orientated, and to appreciate the real strengths and weaknesses upon which to build and benefit.

Next time we look at becoming serious about putting customers at the centre of operations.

Dennis Gilham: Biography

A Chartered Engineer and Fellow of the Chartered Institute of Marketing with over 30 years experience of delivering customer facing solutions in the postal sector. Dennis has held senior industry roles as Head of Corporate Partnerships, Group Business Line Director, Group Director of Product Marketing and Director of Research & Development. He has built a unique set of skills and knowledge in promoting new solutions for business customers of all sizes in mail, express and parcels.

Having worked with Posts worldwide, contributing to their business development through customer insight, marketing strategy and innovative solutions, Dennis now has the opportunity to help postal management in his capacity as Independent Strategy Advisor.

+44 (0)79 74 97 50 00

dg.concretconsult@talktalk.net

P&P: Who is PostEurop and what do they do?

BS: PostEurop is the association of public postal operators in Europe; it is important here to underline all these words. Under the umbrella of PostEurop you can find the 48 traditional postal operators from Europe - the traditional universal service provider company, the incumbent. PostEurop is the industry association of these European companies. It covers the whole of Europe from Portugal to Russia, from Iceland to Turkey, from Finland to Malta and Cyprus. So we have a geographical scope, and as such, with 48 members we cover both the big postal operators like DHL, Royal Mail, TNT, La Poste France, Poste Italiane, Correos, Russian Post, but we also have smaller members such as Poste Slovenije, MaltaPost and Posta Shqiptare. And PostEurop is the voice of the European postal industry, or at least this is our objective that we develop this skill. We play a double role in the life of our members. On the one hand, we try to defend the interests of our members towards the European Union decision makers as well as within the Universal Postal Union (UPU); but we also want to represent the industry to the stakeholders coming from other industries, like the paper, print industry as well as envelope manufacturers. So this is one aspect of our work, representing the European postal industry. On the other hand, we have quite some internal activities as well, like providing a platform for the exchange of information; know-how; best practice and development among our members.

P&P: Do PostEurop ever deal with non-European countries?

BS: Currently we represent only the European postal operators; however, we have contacts with the representative associations of other continents as well, mainly through the Universal Postal Union (UPU). So PostEurop is one of the so-called restricted unions of the UPU. It is a regional union so we have this kind of worldwide contact network as well, but our aim is to defend the interests of our European members.

P&P: So you are fairly new to the role at PostEurop, how are you finding the job?

BS: I have been in this position for more than half a year. It has brought huge change in my life. Prior to this change I had been the executive director for international business at Magyar Posta. So I already had a certain international role that I had to play. I was also a member of the management board of PostEurop at that time so I had to play a role in the international arena. However, to be here in Brussels, as the secretary general of PostEurop, has definitely been a huge challenge for me as I don’t represent just one company, but I have to represent the interest of all our 48 members. This gives me an extra responsibility to find the common platform, first among our members, and then afterwards to do my best in order that this voice is heard by our partners. So it is challenging work on a European level, but I like being part of this international playing field. My experience in the role has so far been more or less what I expected, and I will do everything that is needed in order that PostEurop is seen as a strong, powerful representative of our European members.

P&P: Why have PostEurop decided to sponsor the Growth award at the World Mail Awards?

BS: PostEurop currently has a four pillar strategy: firstly, we are involved in the postal regulatory affairs in the European Union and UPU. The second pillar is the operations pillar, which covers the quality of service development project activities at PostEurop. We have a social responsibility pillar, mainly linked to the human resource aspect of the postal operations; we know this is a human resources intensive industry. And last but not least, one of our strategic pillars is the market development pillar. Sponsoring the growth award within this framework is closely-linked to our activities within the market development area. There, are main objective is to promote the value of mail.  So as I already mentioned, PostEurop is an industry association, and so our aim is to represent the general interest of the European postal operators. And sometimes when we talk about the speed of liberalisation and the details of the deregulation process then we tend to forget that the demonopolisation is about the repartition of the different pieces of a certain cake. But, it is also important - and I think that this could be one of the roles of an industry association like PostEurop - to contribute to the increase of the size of the cake; I think that this is the name of the game. PostEurop is very well positioned on behalf of our members to promote the value of the postal products, promote the value of mail, mainly in the short run. But of course in the mid and long-term, PostEurop would also like to play a role in promoting the value of new products as well. In the recent period we could see a decrease in mail volumes, on the one hand generated by the worldwide economic downturn; on the other hand generated by the e-substitution. However I think that postal operators should not accept this trend; instead they should fight in order to defend the traditional mail sector as much as possible. Maybe it is unrealistic to increase the volumes, but I think it is important to preserve the current size of the cake at least, and to add to this cake new products.  This is something that could be facilitated by an industry association like PostEurop.  And through sponsoring the Growth Award we want to highlight our commitment towards these ideas of promoting the general market interest of the postal industry and of our postal operators.

P&P: So with the recession, and also the declining volumes, growth is now the most important aspect for postal companies in the next few years…?

BS: Exactly, and that is the point here. In the time of recession and e-substitution, in the short term the postal operators could fight to maintain the current level of profitability by making cost cutting measures. But, only having cost cuttings within a company can easily lead to a downward spiral. I think that it is important for everybody to understand that the long term business sustainability of postal operators very much depends on the growth in their revenue potential. So with cost cutting you can reach only a short term result. But in the long term, the health and the development of the postal operators and the postal market could be only guaranteed by finding new ways of selling postal products and services. So through promoting the value of paper; of mail; re-inventing the mail; promoting the usage of direct mail; but also through introducing new products around e-commerce or financial services. There are plenty of possibilities so growth is a key word as you said in this regard. We all have to work together in order to find the potentials for growth in the postal market, and PostEurop wants to play a role in that process.

P&P: So where would you see the postal industry in five years time?

BS: I think that the postal industry has changed a lot already in recent years. I actually joined the industry 11 years ago, and at that time it was still an administration type industry, with close links to the government. In the mean time, the commercialisation of the European postal industry, mainly within the European Union, but also in other countries, has happened.  Postal companies have diversified their portfolios - some of the companies have changed even their statutes, some have been privatised. So I think that this process of commercialisation of the postal companies, combined with the liberalisation of the market will definitely bring a lot of changes in the sector.  If you asked me what I would say regarding the five year development scenario, it is not a dying industry. Moreover I think that the postal operators are aware of the fact that they have to invest in growth; re-invent the traditional part of the business; they have to diversify their portfolios; and they have to launch new products. So in five years time I think it will be a flourishing or rather a developing industry in good shape, but maybe with some new elements in comparison to what we have today. It all depends on the innovative minds of postal operators and I think that most of the operators, if not all of them, have this kind of internal power to be as innovative as is required by the social, economic and the general environment.

PostEurop is the proud sponsor of the Growth Award at the 2010 World Mail Awards, to be held in Copenhagen on June 15. The event takes place on the eve of the World Mail & Express Europe Conference & Exhibition, were Botond will also be speaking. To book your place at the World Mail Awards, please click here to download a booking form. Alternatively, to attend the Awards ceremony and the World Mail & Express Europe Conference & Exhibition, please click here to book online.

In difficult economic times, management must react by adjusting expenditure around what the business can afford; simply put ‘cutting costs’. The postal sector has high fixed costs and that is a structural weakness in times where financial flexibility is required. It also has high labour cost content and that cannot be adjusted quickly or easily without impacting service quality or key skills. If recognised, structural weakness can be managed over the longer term and turned to advantage. However, near-term, tuning the cost base to remain competitive or even viable needs care. Cost cutting must distinguish between “cost” and “investment”; the difference, should there be any doubt, is customer added value.

Cost can be cut without impacting the customer, whereas investment cannot. Without good customer insight it’s not so easy to identify, either directly or indirectly, which money adds customer value and which does not. A second-rate but common approach to cost cutting is to levy a fixed percentage reduction across the organisation. This sends all the wrong signals and misses the point. So, how to do better?

A good start is to check whether a business activity really works for customers; does the activity and its associated expense result in making life easier for customers, does it solve a problem, or does it build or improve the relationship between business and its customers? Does the activity really make it easy to access or use the service or to find the support that the customer needs? Does it help the customer’s business stand out in some distinct way? Does it offer some synergistic benefit, such as delivering more visibility and control over the customers’ own business processes? Will the activity bring an affordable offer to business and does it give good value for money? These checks can be used to identify activities having low value and candidates for cost cutting. However, achieving success, particularly in turbulent times, is more complex.

Achieving customer value is specific to the organisation and specific to the needs of customers at any particular time. The market is dynamic with added value opportunities coming from customers changing needs. A strong strategy or plan of resource allocation that embraces market change is essential, particularly when the organisation is in the middle of an economic crisis. Ultimately a strong strategy requires insight or knowledge of customer needs that fits the scope of the organisation’s strengths. Without such insight the risk is to cut the very investment required for future recovery and with it customer added value, rather than cutting costs; worse still that just might put the business into a tail spin.

Next time we look at improving customer insight and making more effective use of its findings.

Dennis Gilham: Biography

A Chartered Engineer and Fellow of the Chartered Institute of Marketing with over 30 years experience of delivering customer facing solutions in the postal sector. Dennis has held senior industry roles as Head of Corporate Partnerships, Group Business Line Director, Group Director of Product Marketing and Director of Research & Development. He has built a unique set of skills and knowledge in promoting new solutions for business customers of all sizes in mail, express and parcels.

Having worked with Posts worldwide, contributing to their business development through customer insight, marketing strategy and innovative solutions, Dennis now has the opportunity to help postal management in his capacity as Independent Strategy Advisor.

+44 (0)79 74 97 50 00

dg.concretconsult@talktalk.net

By 1930, rocket research in Germany for both peaceful and military applications was being enthusiastically, if sometimes discreetly, pursued - the Reichswehr having noted that the Treaty of Versailles made no reference to rockets or their manufacture. Among the enthusiasts was a young rocket pioneer, Gerhard Zucker, who was obsessed with the concept of using rockets as means of carrying mail.

Zucker was not the first to launch a mail-carrying rocket in Germany - Reinhold Tiling successfully delivered 188 postcards this way on 15 April, 1931. However, when Tilling was killed on 11 October, 1933, Zucker became the principal advocate of rocket mail in Germany.

Zucker had successfully launched his first mail-carrying rocket on 13 August, 1933, from the North Sea town of Duhnen to Neuwerk Island. On 6 June, 1934, Zucker successfully launched a mail-carrying rocket on the Sussex Downs. Envelopes carried on this flight were franked with special ’stamps’, created by overprinting the APEX souvenir vignettes with the inscription “ROCKET POST - First British Flight”. These stamps did not bear any indication of face value but were tied to the envelopes by a rather elaborate cancellation which showed the date and location of the ‘trial firing’ and (in tiny lettering) the words “Zucker Rocket Post - Rocket Fee Two Shillings Six Pence Paid”.

Although the first British rocket mail flight had proved successful, the Sussex Downs were not typical of the locations that Zucker envisaged would benefit most from his rocket system. Zucker was looking to places where planes could not operate due to lack of airstrips and other factors, particularly in island communities. And so, in July, 1934, Gerhard Zucker brought his rockets to the island of Scarp in the Outer Hebrides. Scarp is a small, rugged island lying just off the north-west coast of Harris, the two islands being separated by the narrow Caolas an Scarp. Although only little more than four kilometres by three kilometres in extent, Scarp supported a considerable population in the 19th century - 32 families, totalling 120 people.

In 1934, the island provided an ideal location to launch Scotland’s first mail rocket, the 500 metres width of the Caolas an Scarp being well within the range of Zucker’s projectiles. The launch date agreed was 28 July, 1934, and Zucker had special stamps prepared as he had done for many of his previous mail flights. These were rather more impressive than the ones used in the Sussex Downs trial and depicted a rocket in flight towards an island, and an upright rocket ready for launch. The stamps were inscribed ‘WESTERN ISLES ROCKET POST’ but bore no indication of face value. However, two versions were printed, one in green, which was sold at two shillings and sixpence, and the other in red which sold at five shillings, the former being for use on ‘printed paper rate’ items of mail, and the latter for ‘letter rate’ items such as sealed envelopes.

The rocket stamps were cancelled by the same complex design which had been applied to the mail items in the Sussex Downs demonstration, except that the location and date elements were, of course, altered to read ‘TRIAL FIRING SCARP-HARRIS 28 VII 34′. The part of the cancellation in small lettering referring to the ‘Rocket Fee’ of two shillings and sixpence was identical to that used at Sussex Downs and was applied to both 216d and 5/- rocket stamps. The sale of these stamps was clearly intended to publicise the experiment and to defray some of the costs, but few would have been purchased by the less affluent members of society in a year when 5/- would have bought a bottle of Douro port wine, 1216d a bottle of Clachnacuddin ‘pure malt whisky’, 10/- a pair of ladies’ shoes, and 50/- a man’s lounge suit. Nevertheless, the venture attracted sufficient interest to ensure that Zucker was able to load the steel chamber of his rocket with 1,200 items of mail. The consignment included letters addressed to King George V, Ramsay MacDonald, then Prime Minister, and other government notables.

On Saturday, 28 July, 1934, a crowd gathered near the eastern shore of Scarp to witness the proceedings, the presence of the area’s Head Postmaster signalling a degree of official interest in the outcome. Gerhard Zucker pressed the electric starter button and there was a dull explosion and flash of flame before everything was obscured by smoke. When the smoke cleared the shattered rocket could be seen among the remains of the launch apparatus with smouldering letters scattered around.

Zucker put the cause of the disaster down to a fuel fault and, undaunted, determined to repeat the experiment. However, in view of the previous mishap, it was decided to launch the rocket on the Isle of Harris but not across the Caolas an Scarp, no doubt much to the relief of the inhabitants of Scarp. The launch site was to be at nearby Victorian Amhuinnsuidh Castle.

A second rocket was prepared and loaded with another consignment of mail. Of the original letters, 793 had been recovered in more or less reasonable condition, and these, together with a further 142 new items were enclosed in the rocket’s mail compartment. On Tuesday, 31 July, with the onlookers no doubt at a suitably respectful distance, Gerhard Zucker ignited the rocket, which promptly exploded in a cloud of smoke and flame. Reporting the incident a few days later, the Inverness Courier pointed out, rather unkindly perhaps, that “a piece of the rocket was found somewhere near the objective”.

However, on this occasion, all the mail was safely recovered, and the envelopes shown opposite survived both the attempted launches. Franked with a King George V 2d stamp (printed paper rate) for onward transmission by the GPO by conventional means after the rocket flight, the envelope also bears the Zucker green (216d) rocket stamp with the appropriate cancellation. The GPO stamp was cancelled by the normal double-circle cancellation of Harris post office on 1 August, 1934, the day after the second launch. Like many of the mail items recovered from the first attempt, this envelope bears small scorch marks around the edges, and an explanatory cachet was applied to the rear of such items with the wording “Damaged by first explosion at Scarp - HARRIS”.

The new items of mail, which were added to the rescued remainder from the first launch, had the rocket stamps cancelled with a similar design to the original, except that the wording was altered to “TRIAL FIRING HARRIS - SCARP”. The date remained as 28 VII 34 although the second launch took place on 31 July.

Fortunately, no injury was sustained during the two launch attempts - except perhaps to Herr Zucker’s pride - and the hapless inventor decided to call it a day. He returned to the south of England where, on December 19, 1934, he attempted an unsuccessful rocket mail flight from Lymington in Hampshire, across The Solent, to the Isle of Wight. The Scarp connection was not over yet, however, as Zucker utilised the remainder of his Rocket Post stamps for the Solent flight by overprinting them with the words “Isle of Wight First Flight”, with the “WESTERN ISLES” inscription obliterated. .

From England, Gerhard Zucker returned to the Continent and continued his rocket mail experiments in a number of West European countries. By this time, however, the situation in Germany had changed. Hitler had become Chancellor in January, 1933, and, by the end of that year, the Nazi Party had tightened its control on virtually every aspect of German life. In the field of rocket research, experimental groups such as the Verein fur Raumschiffahrt (Society for Space Travel) - to which Werner von Braun, the young scientist who would one day see his dream fulfilled, belonged - were closed down, with all further research being under the control of the army at the Kummersdorf Research Station in the Brandenburg Forest. There would no longer be a place in his homeland for Gerhard Zucker’s rocket mail experiments, which may well have been the reason why he pursued his particular dreams outside Germany for so long. When he did, eventually, return, it is believed that he was conscripted to join the hundreds of scientists and technicians working on the development of Hitler’s V1 and V2 ‘Vengeance Weapons’. If so, it would have been sadly ironic if he had been aware that German ‘rocket mail’ was successfully carried across the Channel when, in 1944, a number of V1 Flying Bombs packed only with propaganda leaflets, were targeted on London from their launch sites in the Pas de Calais. Gerhard Zucker did, however, survive the war and, by 1960, was, once more, launching his mail rockets into the skies of Europe!

And there the story might have ended had not an enterprising film company decided to make a film of Zucker’s exploits in 2002. Entitled The Rocket Post, the £10m production was directed by the late Stephen Whittaker and starred Kevin McKidd, of Trainspotting fame, and Shauna MacDonald. Filming was to have been carried out on Scarp but the island’s owner did not give consent and the set was located on the island of Taransay, the scene for the BBC’s Castaway television series, which lies some 11 kilometres south-east of Scarp as the crow (or mail rocket) might fly. Although the film was not widely acclaimed in Britain following its release, The Rocket Post hit the headlines in August 2004, when it was announced that it had been awarded the Festival Grand Prize at the Stonybrook Film Festival in New York, seeing off the challenge of eleven other films in the process.

As with many film dramas, the story line was romanticised at the expense of historical accuracy. The film was set in 1938, instead of 1934, presumably to facilitate the introduction of certain Nazi activities, and, as King George V had died in January, 1936, the facsimile rocket mail shown in the film had to be franked with George VI definitive stamps - nice attention to detail but historically inaccurate.

This article will be published in March 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here. June issue now available!

Hybrid mail is a term that has been in use for well over a quarter of a century. Its meaning has evolved and adapted over that period, particularly as the potential of the Internet has begun to be better understood and exploited.

The classic postal definition of hybrid mail assumes digital data being transformed into physical letter items at distributed print centres located as close as possible to the final delivery addresses.

As new forms of communication have developed, so a wider definition of hybrid mail has evolved, which presumes that delivery to the final destination does not have to be in physical form but may be via email, mobile and SMS.

Jarek Przybylski, Research Manager at Triangle Management Services, told Mail & Express Review: “As part of our research for this report, Triangle interviewed a range of technology suppliers, hybrid mail service providers (both postal and non-postal) and potential providers. We have used published information sources and obtained input from a number of experts to provide an overview of a broad selection of hybrid mail service providers and technology suppliers. We believe this is the most comprehensive study published to-date.”

A number of recognised industry experts have contributed to the report, including former Chief Executive Officer at PrintSoft and Associate Director at Triangle, Mark Worsley, Hybrid Mail Consultant for Gemadec SA, Jacob Johnsen, and Managing Director of Document Exchange Network, Walter Trezek.

The report comes in the form of two parts: one provides a strategic overview of the development and application of hybrid mail, whilst the second supplies readers with a comprehensive guide to suppliers of hybrid mail technology and services. Triangle has made both sections available for purchase separately, as well as offering them together as one complete package.

Przybylski continued: “With the extensive research undertaken for this project, the study will provide business critical information for: business and institutional users of mail services; national posts; and hybrid mail service providers - as well as: suppliers to the mailing industry; regulators and trade associations; governments; and industry analysts and consultants.

Worsley said: “We are happy to talk to purchasers of the study regarding bespoke consultancy services. These can range from presentations by senior consultants of the findings of the study to Boards and other management groups, through to looking at the implications for the current and future business strategies of the client.”

Hybrid mail is an exciting development - with traditional mail volumes continuing to fall, and with the industry pursuing viable alternatives, there is no doubt that hybrid mail will be at the forefront of the postal sector’s 21^st century renaissance.

If you wish to place an order for the Hybrid Mail Report, or discuss your requirements further, in the first instance please contact Jarek Przybylski on jarek.przybylski@triangle.eu.com or +44 (1628) 642910, or Mark Worsley on mark.worsley@triangle.eu.com or +44 (0)78 2530 2032.

For more information on the report, click here.

This article will be published in June 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here.

A practical solution to this problem is to use an ISO Licence Plate identifier within the barcode or RFID tag being used to identify the letter or parcel.  Such a licence plate by definition is globally unique.  The system is regulated by a system of “issuing agencies”, authorised to to create and use identifiers under the overall control of ISO, which is the overall global standards agency.

With a truely unique identifier there is no longer any need to correlate or over-label at the edge.  Some European Postal Administrations already use such a licence plate for their domestic parcel systems and the RFID tags used by the UPU Global Monitoring System are also uniquely identified by this system.

This should not be seen just as an operational/technical issue, as ISO License Plate Identifiers are now being mandated in other industries.  The Defence industry has an identification mandate called UID which is being used by the DoD, and is being adopted by other NATO countries.  UID is based on exactly the same ISO License Plate standard as the postal industry.  The NATO supply chain represents one of the largest opportunities for the express parcel industry.  So there are some really significant commercial imperatives for adopting an open ISO licence plate approach.

Every piece of “parcel and mail” sortation equipment in our industry uses some form of item identification technology.  Why not adopt an “open standard” and use the information to optimise our networks and inform our customers.

The business idea is really simple but I do appreciate that industry CEOs might need some help in understanding the concept and the issues.

If you would like to find out some more information on this subject - I have put a discussion group on Linkedin and also plan to run some Webinars.

When people began to talk about Mark Twain in the past tense, he had to speak out to let everyone know he was still alive and kicking.

More and more lately, the same kind of thing has been happening to the mail. But jumping to the conclusion that mail is finished is just as premature as Sam Clemens’ obituary.

As little as ten years ago marketing could mostly control how customers heard from us. We picked the time and the channel, we decided what was appropriate, and we put the communications out there.  If that approach still worked, we would find it a simple matter to migrate consumers to less expensive online engagement, away from expensive printing and postage charges.

There is just one thing wrong: marketing does not control much of anything anymore. Now the consumer decides how, when and where to engage in two way dialogue.  While there is no longer a dominant method of communicating with consumers, it is also clear that lots of people still want mail to play a prominent role in the conversation.  Just take a look at the facts.

Direct Marketing in the US is a $1.7trillion business

Use of direct mail and/or catalogues to market directly to consumers drives more than $556bn in US sales annually. That is a lot of business, about one third of the total $1.7 trillion in annual US sales generated by all direct advertising channels.

By contrast, direct response advertising on the internet, including search, combined with email and mobile marketing, still makes up less than 30% of total direct channel sales.  However, the digital channels are growing rapidly, with marketing to mobile devices leading the way at an expected 45% growth rate.

Direct marketing has grown exponentially with the growth of the internet, a trend that will certainly continue as mobile networks carry on with the current evolution of smartphone and e-reader apps that we see taking hold in almost every walk of life.

With all this technical progress has come greater competition, especially as traditional retailers have become more proficient in the technical precepts of direct marketing. This trend will intensify over the next five years and with it will come greater and more adept use of email and short messaging to keep communication personal, timely and relevant.

Where do we go from here?

What is next?  That is always the question. Mobile apps and social media will most definitely continue to play an ascending role in marketing over the near future.

Take social media, which some consider to be the ultimate word of mouth advertising. If you knew that many of your customers would tell 500 or more of their friends about your brand, would you pay attention? Actually, 25% of consumers who participate in social media have 500 or more friends.  Every time they engage with a brand, their friends find out all about it, good and bad.

Or look at mobile marketing, with approximately 76% of the US population carrying at least one mobile device.  Advancements in technology and affordability have equipped 88% of mobile users to receive text messages, and today 64% of them can access the internet with their handhelds.  That number is currently expanding very quickly.

There is no surprise that mobile marketing has its strength among younger customers for now, but what is significant is that short messaging service (SMS) or texting is by far the most prevalent across all demographics.  Europe and Asia lead in this area, and their success is a call to action for those U.S. marketers who are not yet engaged in mobile marketing.  Why wait for the perfect app when you can engage your customer right now with a simple SMS message?

Meanwhile, simple text messaging can be an excellent supplement to personalised catalogues and targeted mail devoted to existing customer relationship management, loyalty, and retention programmes. Messaging is also a good way to facilitate communication with lapsed customers who may no longer justify a catalogue.

As the balance of channels shifts and expands, print media will continue to complement not just mobile marketing but all the direct channels for one to one customer communication. Other marketing channels may be more efficient and require less lead time, but nothing short of face to face in person selling conveys the lifestyle appeal of a brand better than print.

Posts are developing technology in support

Today the postal service is deploying networking technology using Intelligent Bar Codes on mail pieces that allow marketers access to accurate and highly timely delivery information, and provide them with the ability to plan with precision exactly what day and date they want their messages to enter a household.

This valuable new management tool adds an important dimension to a traditional and proven effective marketing channel.  In an integrated marketing campaign, attention getting, relevant mail can be used to time the deployment of a website, an email or even a mobile coupon campaign.  GPS data that can show the proximity of specific locations will increasingly tie into mobile marketing efforts, particularly among retailers, adding even more capability to the one to one direct marketing mix.

Clearly, ‘the sky’s the limit’ for full integration of all the online and offline marketing communications channels, based on the ability to collect and analyse data.  The balancing act of channels (stores, mail/catalogues and online/phone) will drive retailing success as traditional retailers become more direct, and as online success stories expand into other channels such as catalogues and stores to compete with larger rivals and grow strong brands.

This article was published in March 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here.

Having successfully completed Europe’ largest mobile handheld deployment for a client leveraging technology to reduce price and enhance service provision, I will share a few thoughts on how to get best value from a technology driven transformation.

There are three key aspects to success:

• Maximising business value
• Managing business risks
• Improving ‘time to value

Maximising business value

First, it’s not about the technology.  Maximising business value is about designing a business solution that optimises the way in which your people, processes, and technology interface. Take handhelds in the postal sector. Their primary purpose has been electronic proof of delivery; which these days is a bit like buying a high specification PC and using it only for email. My client assessed and optimised its entire sales to billing process as part of the handheld programme to make sure it got best value - use of the handhelds for proof of delivery was only part of the solution

To maximise business value, the client used handhelds to:

• Connect the field operations staff with the sales team, providing the sales team with up to the minute leads;
• Provide two way field communications with field staff, enabling them to operate effectively and safely;
• Provide routing information to optimise journey times;
• Communicate to customers to reduce failed deliveries;
• Increase accuracy in the billing and revenue protection process;
• Enhance customer and business management information and reporting; and, of course,
• Provide electronic proof of delivery;

The easy option would have been to use handhelds simply to replace an activity - paper cards with electronic proof of delivery (ePod) at the doorstep. However, designing the solution to impact throughout the sales to billing process has greatly increased the business value derived. As most of the investment cost is in the handhelds and support already being deployed for ePoD, the marginal cost of this increased business value is low.

Managing business risk

To use an analogy, building a new house is low risk, whereas renovating a listed building is more complex, and the same is true for postal technology transformation.  The handheld hardware has been designed for the postal industry and software firms are also expert at designing and building solutions for the postal industry. So once you have selected business partner(s) and contracted appropriately, you can answer two initial questions:

• Does the hardware meet requirements? Yes.
• Does the software meet requirements? Yes.

Then you can pass these risks across to the suppliers. Once you’ve put in place strong project management to complement the contract and commercial expertise, you’ve gone a long way to managing the “external” risk.

Now you’re ready to build your new house. Unfortunately, unless you’re  new to this space, you won’t be “building a new house from scratch”; you will be renovating.  You will need to interface with legacy IT infrastructure and business processes that are not uniformly adhered to in the field. And these, for me, are the two key “internal” business risks.

• Can your infrastructure handle it?
• Can your business continue to operate existing processes whilst adapting to use the new?

You can share these risks, or try to discharge them on the supply base, but risks are best managed where the area of accountability lies. In the case of infrastructure, that’s either with the client’s IT team or an outsourced provider. In the case of processes, the expertise and accountability lies squarely with the client’s business teams be they existing operations and commercial functions or new areas established to cater for new ways of working.

In short, to manage your key risks, you need three critical pillars in place.

• Programme, Project, and commercial management
• Expert knowledge of client IT infrastructure and support processes
• Business expertise that can design, embed and leverage the new ways of working.

Weakness in any area will lead to a sub-optimal solution. Occasionally, programmes will have a lead that has expertise across all areas, though this is not always the case.  In my case, the client was willing to invest in strong leaders in each of these three areas, and to forge these leaders into a team. It was this recognition that all three areas required strong leadership which gave the business the strength and depth of experience and expertise to manage risks effectively.

Improving time to value

In most cases, the quicker something is implemented, the quicker you can start making returns on your investment.  However, it’s often thought that speed is inherently risky, that staff  don’t like change and that giving them more time to adjust is a good thing. However, change is the journey, not the destination. Change is uncertainty.  With this in mind, lengthy implementation windows can be worse. Staff remember the old technology, the old ways of working, for longer. There is increased parallel working leading to confusion about what is the right way. There is opportunity for people to try to turn back the clock, to try to move back from uncertainty to the comfort they knew.

The key to change is not duration, it is preparation. Time must be invested up front in planning so that when the business is ready to make the change, it can do so with pace and precision. This minimises the period of change and uncertainty, and gives staff the opportunity to quickly become comfortable with their new way of working.  This in turn reduces change costs (as the support period is shorter) and increases business value (by reducing time to value). Part of these two financial benefits can be factored into making sure the business puts the right focus and investment in change management and its preparation.

Firmly grasping these principles, my client deployed 27,000 handhelds in 2,100 locations and trained 35,000 staff in 12 weeks, and the solution performed to a high level of quality from Day 1. This not only enabled the rapid adoption of new ways of working, but enabled acquisition of customers in a new market segment to help address decline in my client’s traditional business services.

Summary

In summary, investment in mobile solutions isn’t a technology investment, it’s a business opportunity to get people, process, and technology working better together - and that is how you maximise business value. Whilst  there is much that can be delivered by a competent supply base, this level of transformation requires core business expertise at its heart. It is about how you recognise and manage risks; how you manage change through preparation, precision, and pace, and precision. Get these right and you will not only improves your time to value, but you will deliver a business solution which really differentiates you from the competition.

To leave a comment for Simon, please post below…

Highly interactive, content-rich websites offer customers an immersive experience, often incorporating social media to enhance engagement and brand loyalty. Unless this innovation is extended to the fulfillment process, retailers risk undoing all of their hard work.

In ecommerce, delivery is the final mile of any online journey, when the virtual transaction becomes real, and is vital to satisfying and retaining hard-won customers. Returns present a chance for retailers to show how much they value customers by solving problems quickly and helpfully.

A successful delivery or a hassle-free return may not be something customers shout about, but a bad experience certainly will be. Despite the risks, fulfillment remains low down the list of priorities for many retailers, even as they rush to enter the buzzing playgrounds of Twitter and Facebook.

Of course, the cost of delivery is often a crucial factor in a customer’s decision to purchase an item, so it’s vital that charges are easy for users to find. But, is ecommerce being undermined by the assumption that consumers can afford to stay at home all day waiting for a delivery?

The scale of the issues was highlighted in recent research from IMRG, the industry body for online retail, which showed that more than one in ten deliveries fail first time and the overall cost of missed deliveries is almost £1bn per year^[1]. The research also revealed that the average trip to a parcel depot to collect a missed parcel is almost 8 miles^[2] and this will be compounded if one third of post offices are forced to close over the next two years^[3]. Even more telling is the impact that failed deliveries are having on brand loyalty, with 38% of consumers claiming to have been put off a retailer as a result of a poor delivery.^[4]

Retailers need to work harder to fit in with their customers’ busy lifestyles, so offering a range of delivery and returns options is essential. Couriers have innovated with timed and weekend delivery slots, improved tracking and SMS alerts. Click & Collect and ‘buy online, return in-store’ options have been hugely successful for brands such as Argos and Halfords and now new services allow all retailers - even pureplay online businesses - to offer their customers this convenience  and freedom from delivery times.

What happens in this last mile is becoming business critical and, unless addressed, may undo the hard work online and multi-channel retailers put in to developing deeper relationships with their precious customer base.

As competition for customers continues, businesses and retailers are attempting to integrate their internal multi-channel operations to provide a seamless and consistent customer experience. They will increasingly realise that ‘CCD’, or customer centric delivery, has a pivotal role in keeping customers happy.

^[1] Valuing Home Delivery 2010; e-Retail Industry Review - February 2010

^[2] Consumer Delivery Survey 2010: e-Retail Industry Review - February 2010

^[3] http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7637066/Third-of-post-offices-could-close-in-two-years.html

^[4] Consumer Delivery Survey 2010: e-Retail Industry Review - February 2010

In light of such a serious threat to their financial stability, we, as industry stakeholders, support the European postal operators in looking at opportunities to add new revenues to their business. However, we are increasingly concerned that these operators are exploring too many external or non-core business options and ignoring the significant potential that can be developed in the existing core mail business.

Most industry commentators tend to focus on the 20-30% forecast decline in mail volumes. Yet the most important ‘take home’ message for the postal industry from our study is that 77% of mail volumes are still likely to remain in 2014. We strongly believe that it is this latter figure on which we should concentrate as it is by effectively managing the 77% that we will ultimately control our own future.

Every communication channel has it advantages and disadvantages. While competition for market share exists at the periphery, the main physical mail volume for each channel is unlikely to be touched. The reason is because it works and works very well.

A case study on the continuing power of direct mail

For direct mail, this point was made very clearly in a presentation to the Association’s recent annual congress. The speaker was able to offer some observations of her experience in the US during the last Presidential election. She started by highlighting the fact that the Obama campaign spent an unprecedented $56m on direct marketing.

The campaign’s strategy was to employ all available direct marketing tools to ensure that consistent messages were heard and understood by all Americans. Without going into too much detail, the campaign team used SMS to ensure supporters were the first to know; Internet to offer an ongoing social dialogue; and telephone for ongoing donations (once contact had been made).

Importantly, the campaign team also made extensive use of direct mail in order to sell the Barack Obama message, to seek first time donations and to sign up new supporters (remember that direct mail is still opt out in most industrialised countries).

Perhaps surprisingly, the team also used the medium of the physical letter to set out Obama’s arguments, knowing that the recipient would read a well personalised letter in a quiet place without competing comments.

The presentation concluded that, within a well constructed direct marketing campaign, direct mail and even a personalised letter will attract people and will deliver the message. The underlying point the presenter was also making was that advertising and marketing is all about message delivery. To maximise the impact, creators must first develop a campaign and then consider the right media channels to use. It is all about fitness for purpose, nothing less.

Need to focus on the core

The European Envelope Manufacturers’ Association believes that business related letter mail has a strong future. The medium can still add more value to its customers’ businesses. It is imperative therefore that European postal operators review their business models (as we all must) but this should be done with a focus on developing the core mail business so that they can defend their market share in communications. Effectively, we need to protect the 77% of volumes that will remain in 2014.

As part of this defence, postal operators must also challenge some of the outdated industry standards and norms that are no longer relevant. It is imperative that they start to ask some serious consumer facing questions:

What about the possibility of lowering tariffs on addressed mail to stimulate business or offering the same tariffs for different shape products to take advantage of creativity in the business, which we believe will drive future mail volumes?

What about raising the possibility of a domestic rate for sending a letter from France to the UK (internalised via the Kahala Group) or from the UK to the Netherlands (internalised via TNT networks)?

What about offering no tariffs for pensioners or school children?  After all, everyone keeps telling us that they send nothing now so what can really be lost.

Postal operators must also look at exploiting opportunities where physical communication channels offer users significant benefits over their digital rivals. For example, a study undertaken by InfoTrends in selected European markets confirmed that the opening rates of invoices mailed in Europe range between 98-99% (2009). Other studies in France and the UK suggest that both consumers and businesses view receiving letter mail as a more professional means of communication.

Integrated physical and digital strategies can add value, but not always

It is not the intention of this article to suggest that postal operators avoid developing digital solutions for their businesses. Numerous studies clearly highlight the accelerated response from mixing the two channels (physical + digital). Also, a full service offering is likely to provide a strong business case to attract new clients. Nevertheless, we believe that, posts should first extract the maximum value from their core physical business. In doing so, we believe that postal operators will be in a much stronger position to develop a parallel digital solution that will add real value to their business, and not destroy it.

This point was clearly emphasised by Ulisse del Gallo of Accenture Global Postal Industry who wrote in a recent edition of Mail and Express Review that ‘the general approach …to digital communications…. tends to be managed as a defensive response to the drop in physical mail volumes rather than a comprehensive strategy to integrate traditional and innovative services. Often this puts postal operators in direct competition with service providers that already operate in the digital mail space. While those postal operators that have started document management businesses report double digit growth in that area, growth is seldom sufficient to make up for the rapidly decreasing volumes of physical mail.” (Mail and Express Review November 2009)

Final Thoughts

The European postal industry appears to suffer from a lack of confidence in its own ability to meet the needs of its clients. This is despite the fact that it not only has a great product but it also has a network that services almost 100% of domiciled Europeans. This is a fact that is often overlooked despite the fact that no other written medium achieves this level of penetration.

This industry has a window of opportunity and a strong value added proposition. Let us take the time now to explore its many business opportunities.

This article was published in March 2010’s Mail & Express Review.  To subscribe to the industry’s leading quarterly publication, please click here.

The sustainability of USPS was also addressed during three one-hour sessions at the National Postal Forum. The key information was to provide the delegates attending these sessions the information they need to address the evolving economic climate, requiring sustainability to become one of their business imperatives.

Through this education programme delegates will be given insights into what a “green economic recovery” means to their company as they interact within the postal industry.  Through the integration of lean and green initiatives will generate bottom line savings. The Postal Service is leading the way by establishing a goal of a 30 % reduction of energy within their 33,000 facilities. This goal combined with a desire to educate and generate a culture of conservation among the 600,000 employees of the Service as well as suppliers and partners within the mailing industry.

These sessions also examined how the Postal Services stakeholders make use of the mailing services purchased from the Postal Service. Through USPS’s commitment to managing resources wisely in order to minimise mail’s environment impact, it is leading by its example to meet the needs of the stakeholder, without compromising the future of the environment. This was a key trend that was expanded upon within these sessions.

Another key session that was attended by an overflow of delegates keyed in on Direct Mail and how the value of this avenue is known to the mailing community. In this session delegates were told that the success of previous “temporary price reduction” would be continued and how the USPS would continue to invest in programmes to aid the profitability and success of the mailing community.

The “2010″ summer sale is designed to build upon the success for two previous temporary price reductions that were offered to the mailing community. These sales and future sales are designed to reward customer loyalty and growth while retaining established volumes of previous years.

This current offering will provide a 30% reduction of tariff in the form of a rebate to mailers of Standard Mail letters (Advertising Mail) and flats above an individual predetermined threshold that exceeds 5% of the mailers volume for the same period in 2009.  This period is between 1 July and 30 September 2010.  Participation is by invitation.  This program may be expanded to other products and participants as these pricing incentives move forward.

In addition to this announcement, Robert Bernstock, president of Mailing and Shipping Services pointed to new programmes (APPS) that would enable the mailing community at large to suggest products and modifications aimed at their specific class of trade, and that would increase the business of the mailer, as well as the Postal Service. Several such applications were announced.  One product is where the Hallmark Company will offer a “Postage Paid Greeting Card” making use of the USPS Intelligent Mail barcode to track and identify postage Hallmark will pay to the USPS for each card sold within this test. In addition to this product Bernstock also presented the USPS programme where by the Consumer purchasing and taking advantage of a home delivery program at Wall Mart would receive delivery of prescription drugs, via the USPS, throughout the United States. This programme was designed from ideas generated by the relationship between the USPS and Wall Mart.

In addition to this programme, there will also be a joint venture with the Walt Disney Corporation as well as a new test program whereby companies will be able to test market “free samples” through the USPS. The initiative was designed by the USPS to share the marketer’s cost and drive mail revenue. The product “Sample Showcase” is only in test, however studies will be made to determine the cost effectiveness and value of this product to both manufacturers and consumers.

The Intelligent Mail Program of the United States Postal Service will be the last major issue that I will address in this overview of the Nashville 2010 Postal Forum. This subject matter was the centre of one five hour presentation, one three hour presentation and one of hour duration.

During these presentations, the delegates were exposed to the success of the hundreds of commercial mailers that are using the USPS’s Intelligent Mail Full Service and confirm products to pinpoint delivery dates, coordinate marketing campaigns, improve customer service, track vendor performance, improve target marketing and test creative concepts. This use of a unique bar code developed by the USPS can do this on each document that is coded with a unique code.

Through this unique product, there is available not only a “start the clock” point as well as a true end to end trail. This is unique to each piece of mail and different and more cost effective than the RFID quality of service measurements used by other Postal Administrations and the government. This product will permit those that make use of this Full Service product to cut labour hours within their plants as well as improve accuracy and accountability for their mailings. Technology will replace a variety of manual processes thus increasing bottom line profits.

I would like to thank you for your attention.  In the event that you have any questions or require additional information on the subject matter above please feel free to address your comments Post&Parcel. They will be then collected and transmitted to me to answer or provide additional information.

Lawrence Chaido is a director of TransGlobal Consultants.

Please comment below…

Cellcode for Direct Mail response

The presentation was fully interactive. Using a smartphone with a QR reading app, you could take a picture of the QR code and be redirected to a Landing Page on my Website that had been specially prepared for the event. Celloon provide a “homepage” symbol on the code and the redirection to the Web landing page http://del-mgt.co.uk/Cellcodes.aspx is via a Campaign Management application.

On his site, Chen talks us through the features of the new iPhone, and as an owner of the current and soon-to-be-replaced model, I’m very excited.

I was hesitant about getting my first iPhone two years ago, as I couldn’t see beyond the art of traditional phone calls and occasional texting. However, once in my possession I quickly concluded that the iPhone was the best ‘toy’ I’ve ever had. Not only could I keep in contact with my loved ones, but I could use e-mail, maps, check the weather, sell on eBay, buy on Amazon, and enjoy Facebook - probably my most-used app.

Smartphones have acted as catalyst in the growth of social networking - when out and about people now do not need to find an internet café to log-on to Facebook - it’s all within hands reach. As a result, people become more reliant on the site to keep correspondence with one another.

So as we experience the ever-growing development in communications technology, I fear it will be physical mail that will meet its maker. Of course business correspondence, etc, will always exist, but in terms of friends and family keeping in touch with each other through the romantic process of letter writing, the future looks bleak - which will further impact declining letter volumes, and therefore affecting the postal industry.

I for one am guilty of abandoning the art of letter writing. I keep in daily contact with my friends through Facebook, Linked In, through phone calls, SMS, and more - but I have never received a letter from any of them.

In truth, I have sent one personal letter since buying an iPhone, and that was a letter to my grandparents, naturally. Furthermore, I’m positive that when I’m a grandfather I won’t ever receive a single letter from my children’s children - A video call? Perhaps. A spontaneous visit from them in holographic form beamed into my living room? Possibly. But a letter? Doubtful!

So the question I’m asking is how long personal physical mail will last? Five years? Maybe ten? Or maybe I’m completely wrong and we will see postmen delivering our letters on hover boards in the year 2050 in true Marty McFly fashion!

I’d love to hear your views…

This was an annual opportunity for over 4,000 delegates including the American Mailing Community, members of the United States Postal Services and vendor exhibitors to network, learn and deliver the most timely and best that the mailing industry has to offer.

The overall theme of this event was “Delivering Success” and the three days of educational sessions, networking and vendor presentations proved to vindicate this statement.  Overall mood was optimistic from the vendors and delegates although the tone was a sombre tone from postmaster general (PMG) John Potter during the opening session.

PMG Potter, presented to the overflow audience, a review of findings from several studies commissioned by the Postal Service and presented to stakeholders on 2 March 2010.  In his presentation PMG Potter, focused upon a 10 year action plan to enable the Postal Service to remain viable in the future. The world’s postal administrations are facing a decline in hard copy mailing both on social and commercial levels.  Key to this decline is the increase in e-commerce as well as use of social media and internet channels of communication.  The volume of mail within the United States from 2009 to 2020 is projected decline from 15 to 35 % after a decline of 17 % during the time from 2006 to 2009 and profitable First Class mail will decline a projected 40 % in the period to 2020. With this factor under consideration, the USPS also faced additional financial obligations to prepay employee’s Retiree Health Benefits.

PMG Potter then began to summarise the important facts that would be key to the reinvention of the Postal Service. He said there are six major issues contained within this 10-year action plan keying on action that will bump up value, through innovation, service, quality and information to new levels. The major theme of our plan will be recognising that our success within the domestic and global marketplace will require our organisation to improve our speed and flexibility to respond to a changing environment. Key to this speed and flexibility will be our ability with the aid of the Congress of the United States and all stakeholders to modify the current legislative environment (laws) that govern the day by day operations of the Postal Service.

The major steps to provide the needed flexibility for the Postal Service to continue to meet the needs of all stakeholders, while maintaining the highest level of a strong and viable business, are as follows:

-A change is needed in current legislation that will enable a restructure retiree health benefits from the current “pre-funded” to a “pay-as-you-go” system.  This “pay-as-you-go” formula is in line with other government intuitions and other private sector companies. (This change is calculated to provide an average of $5.6bn in cash flow per year until 2016)

-A change in the “Universal Service” obligation of the Postal Service. Current legislation mandates a six day delivery of mail regardless of any changes in volume.  If the Postal Service was given the authority to adjust delivery frequency to mach volume and the changing mailing environment, additional savings could be reached by the Postal Service. (A reduction from the current six day delivery to five day delivery is estimated to same an additional $3bn.)

-To meet the changing mailing environment, the Postal Service is seeking to expand access to postal products and services.  This change would move the services currently offered by the Postal Service to give stakeholders retail access in non-postal locations.  This would be a move from brick-and-mortar Post Offices to enhance on line presence, partnerships and kiosks. This action would also enable the Postal Service to reduce costs. If these steps are to be taken and the potential savings realised there is a need have Congress’ approval of the method of closure.  There are several proposals currently under study within the Congress.

-The next area for savings that is required to move the Postal Service forward deals with the Postal Service’s workforce. The Service must become a leaner organisation. This will require a change from the current limited flexibility to adapt to market and technology changes to one of the flexibility to capture natural attrition to match changing demands of the environment. A key need is to establish a reduction in the workforce through the collective bargaining process that is regulated by legislation. This is a possibility; however a request to Congress is needed to require arbitrators to take into account the current financial condition of the Service prior to making any decision. (It is estimated that over 300,000 full time employees will become eligible to retire during the next 10 years.)

-In December of 2009, new Federal Legislation (109-435 PAEA) took effect. One key area that this law touched upon was that of Product Pricing for products and services that fell within the monopoly of the United States Postal Service. This law regulated price increases for these products under a strict inflation-based price cap by product class. The Postal Service is seeking to modify this law to each of the monopoly products and services will be based upon demand for each individual product and the costs that are related to each product. This would mean that each monopoly product would be given the flexibility to be priced and prices increased reflective of market dynamics.

-Another legal obstacle that the Postal Service hopes to change relates to new products and services. There are legal restrictions to the products that the Postal Service may bring to market.  The Service hopes to be permitted the flexibility to introduce new and additional products that will enable it to meet the needs of its stakeholders. Each of these new products would provide a source of additional revenue for the Postal Service. To do this there would be a need to amend the current regulatory framework to broaden the definition of postal products and streamline the timely introduction of new products.

-The last area that is under consideration for change and or modification is that of oversight.  Currently the Postal Service is involved in oversight from multiple bodies with overlapping roles and responsibilities. In addition there are many lengthy processes related to this oversight. A streamlined approach would enable the Postal Service to fulfil its mission plan. Changes to the oversight that primarily involves changes to postal networks, products, costing methods, service, Sarbanes-Oxley Act Compliance and complaints, would ensure a continued protection of the protection afforded to stakeholders, while providing the Postal Service the flexibility to manage in the current and future changing environment.

The above specifics were the subject of the PMG’s opening remarks as well as two additional 2-hour presentations, a one hour question and answer session, as well as two major presentations relating to the Universal Service Obligations. Each of these sessions was chaired by senior Postal Officers.

To read the second part of this article, click here.

Shell were at the forefront of scenario planning with their Gamechanger programme, developed by Leo Roodhart and colleagues, but even this most comprehensive of programs had not foreseen this type of event. Terrorism, oil depletion, political unrest, flooding, etc, were all covered, but not the cancellation of all flights due to the ‘wrong type’ of ash.

I guess that these type of events cannot be predicted as there are so many possibilities, however, when companies, and in the case of the postal industry, the business of communications, are so reliant on a single mode of transport, then there should be plans in place to ‘work-around’ the loss of any one of the carrier mechanisms.

Although this can be done at a company level - when an industry is dependent on a single mode of transport or resource maybe there is a case for an industry wide view?

So, if we looked at the resources the postal industry needs to operate then we can ‘plan’ for the what-if moment when they are not available:

Transport

• Air travel - volcano ash, fuel shortages, terrorism, strikes, mechanical failures, air space restrictions
• Road travel - strikes, fuel blockades, terrorism, earthquake, tornado, major flooding
• Rail travel - strikes, fuel shortages, terrorism, crash, major flooding, earthquake, tornado

Resources

• Energy - terrorism, fuel shortages, flooding, strikes,
• Oil - terrorism, political uprising, earthquakes, natural depletion
• Water - contamination, terrorism, global warming
• Paper - Fires, global warming, natural depletion, disease/insect attack

I am sure there will be others and I would be interested in hearing your views. Events such as the volcanic eruption bring to light the fragility of our lives on this planet and our vulnerability to natural disasters. Unfortunately we soon forget when the crisis passes and we go back to our state of peaceful complacency.

We need to get together to understand some of the consequences of the above and build some industry wide scenarios - and more importantly a reasonable response.

Thoughts?

USPS’s business model is to fulfill its mission through self-supporting, businesslike operations; however, USPS has experienced increasing difficulties. Due to volume declines, losses, a cash shortage, and rising debt, GAO added USPS’s financial condition to its high-risk list in July 2009. GAO’s objectives were to assess (1) the viability of USPS’s business model, (2) strategies and options to address challenges to its business model, and (3) actions Congress and USPS need to take to facilitate progress toward financial viability.

GAO primarily drew on its past work; other studies; USPS data; interviews with USPS, unions, management associations, Postal Regulatory Commission, and mailing industry officials; and stakeholder input.

USPS’s business model is not viable due to USPS’s inability to reduce costs sufficiently in response to continuing mail volume and revenue declines. Mail volume declined 36bn pieces (17%) over the last 3 fiscal years (2007 through 2009) with the recession accelerating shifts to electronic communications and payments. USPS lost nearly $12bn over this period, despite achieving billions in cost savings by reducing its career workforce by over 84,000 employees, reducing capital investments, and raising rates.

However, USPS had difficulty in eliminating costly excess capacity, and its revenue initiatives have had limited results. USPS also is nearing its $15bn borrowing limit with the U.S. Treasury and has unfunded pension and retiree health obligations and other liabilities of about $90bn. In 2009, Congress reduced USPS’s retiree health benefit payment by $4bn to address a looming cash shortfall, but USPS still recorded a loss of $3.8bn.

Given its financial problems and outlook, USPS cannot support its current level of service and operations. USPS projects that volume will decline by about 27bn pieces over the next decade, while revenues will stagnate; costs will rise; and, without major changes, cumulative losses could exceed $238bn.

This report groups strategies and options that can be taken to address challenges in USPS’s business model by better aligning costs with revenues. USPS may be able to improve its financial viability if it takes more aggressive action to reduce costs, particularly compensation and benefit costs that comprise 80% of its total costs, as well as increasing revenues within its current authority. However, it is unlikely that such changes would fully resolve USPS’s financial problems, unless Congress also takes actions to address constraints and legal restrictions.

Action by Congress and USPS is urgently needed to (1) reach agreement on actions to achieve USPS’s financial viability, (2) provide financial relief through deferral of costs by revising USPS retiree health benefit funding while continuing to fund these benefits over time to the extent that USPS’s finances permit, and (3) require that any binding arbitration resulting from collective bargaining would take USPS’s financial condition into account.

Congress may also want assurance that any financial relief it provides is met with aggressive actions by USPS to reduce its costs and increase revenues, and that USPS is making progress toward addressing its financial problems. USPS’s new business plan recognises immediate actions are needed, but USPS has made limited progress on some options, such as closing facilities. If no action is taken, risks of larger USPS losses, rate increases, and taxpayer subsidies will increase. To facilitate progress in these difficult areas, Congress could set up a mechanism, such as one similar to the military Base Realignment and Closure Commission, where independent experts could recommend a package of actions with time frames. Key issues also need to be addressed related to what changes, if any, should be made to delivery or retail services; to allow USPS to provide new products or services in non-postal areas; and to realign USPS operations, networks, and workforce.

To read the report in full, click here.

Typically companies have a ‘cookie jar’ where they keep some seed-corn funding available for new stuff or more usually things get funded by reducing spend in other areas.

I was talking to a few innovation practitioners across companies about funding and they all report a similar pattern to the one faced in Royal Mail when I headed up the Innovation team. There was a ‘plenty and famine’ pattern with the gap between the two being around 18 to 24 months - money would be put into Innovation and new things, typically CEO or Marketing led, and then taken away again - typically finance or HR led.

Last week I came across an interesting concept, which was Crowd Funding of start up projects. There is a website www.kickstarter.com where people across the world can invest small amounts of money in start-up projects that they are interested in. For your investment you don’t get any equity but the investee provides some sort of tangible benefit that costs very little. I invested $10 in three girls from New York who have a great idea for a cake decorating company, in return for my $10 I get emails that tell me how they are getting on an a recipe a month for 12 months.

As I got involved in the site I started thinking that this might be an interesting model for companies to get seed-corn funding from their employees. The concept is that ideas would be put forward and employees asked to put a small amount of investment - probably £1 - £5 - in the projects that they thought would ‘fly’. This concept brings together a couple of interesting ideas - the Wisdom of Crowds ideas where the mass of the company will tell you which they think is a good idea by putting their cash behind it, and secondly they will be engaged in the success of their chosen projects. Secondly, the concept of crowd sourcing of ideas and knowledge.

The idea concept would need to be fleshed out to a point where it could be taken forward with a small amount, typically £10,000 or less, of cash. The idea would be put on a web site, either owned by the company or a third party, or made available to the workforce. The amount required would be shown and people would then choose to invest or not - no money would be taken until the target had been achieved. This gets round the problem of having to give money back etc. and reduces the possibility of fraud etc.

Having this sort of initiative in place would also, I believe, encourage people to put their own ideas in to the mix, as it provides a way of giving permission to people to ‘do’ something, particularly if they see other people who they know get funding.

The bit I haven’t worked out yet and would like some thoughts on is how to do the ‘pay-back’ - what would be the equivalent of the recipes? One idea could be that the ‘investors’ would be entered into some sort of competition maybe for a prize draw at the end of the year.

Clearly there are a lot of questions that need answers and things to sort out but it seems a great way a getting that much needed seed-corn funding as well as engaging with the workforce in a positive way.

If you are interested in exploring further please get in touch - or if you have ideas about how to ‘pay-back’ I would be interested in your views.

To produce the 2010 edition, we visited 166 UK online stores in September 2009, placing orders on 136 of the sites. Because we actually place an order we get to see how each retailer performs in terms of speed and communication throughout the process, which is all important for customer loyalty.

It is worth stating upfront that Snow Valley is a provider of e-commerce solutions. We build and operate websites for retailers and as such we have no particular axe to grind when it comes to delivery.

But there is no doubt that delivery information, charges, and options can have a strong influence on whether a customer completes an order or not. By understanding this area we can help our clients to strike a balance between flexibility, value for money, and profitability, so that they can maximise their browser-to-buyer conversion rates.

Especially for Mail & Express Review, we have summarised ten of the trends that we have noted over the past five years.

Retailers are offering more delivery flexibility - Back in 2005, 48% of the retailers we tested gave us absolutely no choice about when the delivery would arrive. The customer was offered a fixed charge and a fixed timeframe and it was a case of ‘take it or leave it’.

This year 64% of the retailers could offer at least two options. The most popular approach was to have a standard service and a premium service but one retailer offered seven different delivery options, covering a choice of Saturday and specific time of day services.

Admittedly, this means that 36% of retailers still do not offer any flexibility. But the trend clearly shows that retailers are moving away from the one size fits all approach.

Take up of Saturday and other services is slow - Although we are definitely seeing an increase in online retail delivery flexibility, the take up of services such as Saturday delivery or delivery on a specific date is happening quite slowly: In 2005, 23% of the retailers offered Saturday delivery. By 2009 this had only reached 26%; 15% of the retailers could support delivery at a specific time of day this year, which shows a very tiny increase on the 14% that had this in 2005; Most surprisingly, delivery on a specific date had not increased at all. 15% of the retailers supported this in 2009, the exact same percentage that had it in 2005.

Why is this so? It is partly down to the way the research has changed. In 2005 we looked at 100 retailers and in 2009 we included 166. What this suggests, I think, is that most companies ramp up their services gradually: a standard service, then a next day service, and only then do they add more specific options. And this theory is borne out to some extent by trend number three…

Larger retailers are more likely to offer delivery options - Thirty of the retailers in our research appeared on the Hitwise Top 50 Shops List from August 2009. When you look at those thirty sites in isolation you see a very different picture: 76% had at least two options, compared to 64% of retailers generally; 53% had Saturday delivery, compared to 26% generally; 37% had specific time of day delivery, compared to 15% generally; 50% had specific date delivery, compared to 15% generally.

This might seem like a no brainer, but it is not. Larger retailers do not offer more flexibility in every area.  For instance, they are less likely to offer international delivery, and they are less likely to have online order tracking. But when it comes to supporting more specific delivery services they lead the way.

Free delivery as standard has not increased - John Lewis started offering free delivery as standard on everything in autumn 2007, which made us wonder if this was going to be the big future trend. But they have since reintroduced a charge and our research suggests that other retailers are not offering this benefit either. Only 13% of retailers offered free delivery as standard on everything this year, exactly the same percentage as in 2005. It is particularly popular among retailers selling entertainment goods (DVDs, games, CDs) where, interestingly, 27% of larger retailers offered free delivery as standard.

Free delivery over a certain order value threshold has increased - Where free delivery is increasing is as a way of encouraging a customer to spend more when placing an order. 39% of the retailers offered free delivery over a certain order value in 2009, compared to only 24% in 2005. We also noted that the average order value threshold, over which delivery becomes free, is decreasing.

Standard delivery charges are going up -43% of the retailers charged over £4 for standard delivery this year, compared to 32% in 2005. This suggests that standard delivery charges are increasing gradually.

Premium delivery charges are coming down - Whereas standard delivery charges appear to be increasing, the charges for premium services seem to be coming down. Only 9% of the retailers charged over £10 for next day delivery in 2009, compared to 16% in 2008. 32% of the retailers offered Saturday delivery for less than £5.99 this year, compared to 23% last year.

International is increasing but slowly - We were surprised that only 53% of the retailers offered international delivery either to Europe or further afield in 2009. It represents a very small increase on the 47% that offered this in 2005. The relative weakness of the pound versus the euro and dollar would surely make UK retailers more attractive to overseas customers. What was especially interesting was that only 30% of larger retailers could deliver abroad.

Online order tracking has increased - By far the most dramatic trend that we have seen over the past five years has been the growth of online order tracking. In 2005 only 59% of retailers allowed customers to log in to their accounts on the website and check the status of their orders. In 2009 this had risen to 84%.  And more and more retailers are offering a link to the carrier’s website, with varying degrees of success.

Text messaging is not increasing - Finally, the trend that we keep expecting to see but that never materialises: the use of SMS messaging to inform customers about the status of their orders. In 2008 our research told us that only five retailers had used text messaging and we were inundated with queries suggesting that this was way too low. But not only were we right, nothing had changed in the intervening twelve months: in total we received text messages from just five retailers, a measly 4% of orders.

This article is featured in the March 2010 issue of the Mail & Express Review. If you do not receive the industry-leading magazine and don’t want to miss out, subscribe by clicking here.

The original Clause Four, drafted by Sidney Webb in November 1917, was Labour’s historic commitment to public ownership. It was written in archaic language, and was a bit clunky to read, but was very clear: “To secure for the workers by hand or by brain the full fruits of their industry.”

The full fruits of our industry, note, not just a few scraps picked up from under the table once the banking sector has finished gorging itself.

This is an issue which is of particular concern to postal workers, being, as we are, in the frontline in the war for public services, and the next designated target for privatisation.

As public servants our role was always to serve the public. Not any more, it seems: now we are to be the servants of profit instead, the servants of the banking sector through its interests in private mail companies.

The trick is that the Royal Mail is being systematically undermined by a form of hidden privatisation called downstream access, and then more privatisation being offered as the cure.

All of the major parties seem to be in agreement with this, the only difference being the degree. Ken Clark has already stated that the Conservatives would privatise the Royal Mail outright, while the Vince Cable for the Liberals favours a form of part-privatisation.

Lord Mandelson’s plans for the partial sell-off of the Royal Mail were shelved last year, according to him because of a lack of credible bidders, although the possibility of a backbench revolt might also have helped to focus his attention. The plans are still active, however, and capable of immediate implementation. It will be interesting to see what makes its way into the manifesto.

Of course, in the fog of the election soundbite wars, this is one issue that will probably disappear from the electoral radar, given the media’s obsession with personality as opposed to policy. Most of my colleagues fully expect to be working for a privatised Royal Mail in the next few years. Where is the political party that will represent our views?

Visit Roy’s blog at: http://roymayall.wordpress.com/

One of the concepts we looked at as part of this modeling was the idea of the ‘value’ of the different types of communications channels that were available. Having come from a telecommunications background I used the OSI stack as a template and produced a communications value stack. The idea of this simple stack is that when someone wants to initiative a communication they go through some sort of decision process to decide what method of communication would be the most appropriate and get the desired result - whether that be a simple response, an answer, or just to be noticed.

Earlier this week the opportunity came to dust off this concept and see if it was still valid today in the multichannel communications world we live in.

So the concept is that all the different modes of communication have characteristics and value to either the sender or the receiver. The diagram is an attempt at codifying these characteristics and values. This is very much a fist pass at putting together the current stack and I would welcome comments on its efficacy or relevance today.

When the concept was first conceived it was to look at how letters, which appeared at the bottom of the stack, could be moved further up the stack by giving them new attributes and values from the other modes of communication.  Today, I think it can be more widely used to find white spaces for new communications opportunities.

The concept of the communications value stack can be used to look at the suitability for different types of transactions, for different types of customers, different generation and many more areas. One I am currently very interested in is the question ‘is the stack different for different cultures?’ - this follows on from some work I was doing in the US looking at the cultural differences with reference to recruitment and retention - particularly around millennials.

Is this a useful way of looking at the way we communicate? If you would like to explore further please get in touch.

Correos de El Salvador is the national public postal operator. It is 100% government owned, with no private sector investment. The post is overseen by the Government General Directorate. Correos has no administrative or commercial freedom, and prices must be approved by the Ministry of Economy. In the director general’s view “those issues do not allow Correos El Salvador to compete with the same conditions as the private operators”.

The government must guarantee the availability of postal service in the country, in accordance with the national constitution and also international treaties.  It has been a member of the Universal Postal Union (UPU) since 1879.

The universal service obligation is the right of every person in El Salvador. “This means access to basic postal services which can guarantee equality, legal security, freedom, no discrimination, no violation of the mail, and no interruption to service,” the director general explained.

The postal market is liberalised and there is no regulator. Granados estimates that the national postal market in 2008 amounted to 60m pieces: 56m pieces of traditional mail and 4m courier items. Of this total Correos delivered 14.2m items or about 25%. This generated $6.6m of revenues for the post, $4.5m from traditional mail and $2.1m from courier services. Companies sent 10.5m items ($2.8m revenues for the post) and individuals 3.7m ($3.8m).

A relatively high proportion of total volume is actually for international destinations, something over a quarter. This international bias is also reflected in the fact that, although the post’s domestically generated volumes are only 14.2m, overall Correos El Salvador processes 20m units annually. USPS is a major partner, since 75% of international volumes go to the USA. This means that it receives about 5.8m units of inbound international mail.

Granados explained that Correos has experienced a decline in mail volumes. However, he believes e- substitution is not yet having a significant impact, whilst Internet activity is helping to grow the parcels market by 20% a year. This “has motivated us to look for new market segments and to the diversification of products and services in order to maintain the level of revenue. Currently Correos El Salvador is financially stable,” said Granados.

The post owns 165 postal outlets nationwide, 30 of which are connected to the institutional network. In addition, there are 50 postal agents that offer limited services. The company employs 1,125 people, 70% of them belonging to operational divisions and the remaining 30% to administrative and support areas.

A transport network based on 11 primary routes connects 100 offices on a daily basis, Monday to Saturday, while 32 secondary routes have weekly connections. More than 85% of mail is delivered within the national territory in less than 24 hours. “This is also the case for the international mail, delivered to the international air mail companies in less than two hours from the point of collection at national level. This is required in order to fulfill the quality standards,” Granados told us.

The director general added: “Correos El Salvador aims to be a competitive governmental institution, based on the quality of our services. We are planning to implement a territorial strategy, with geographic criteria to define the commercial actions. Other projects include postal codification to improve the handling, sorting and distribution of big volumes of mail, in order to improve the delivery times.”

Letters, postcards, direct mail and business units are delivered to the addressee six days per week, accounting for 85% of total volume. Parcels are delivered to local post offices (5% of total volume); whilst the remaining items are delivered to P.O. boxes (10%). Correos has 265 postmen.

For Granados one of the main problems is the address system. “There isn’t logic in the national address system or the numeric sequence in the streets and avenues of urban areas. This makes the delivery difficult, and the situation is even more complex in rural areas. In addition, there isn’t an established postal codification.”

Correos’ main competitors in parcels are DHL, UPS and TNT, which together hold more than an 80% market share in the courier market. Urbano Express, Urgente Express and Gigante Express are major players in the national territory and represent 70% of the traditional mail market.

Correos El Salvador offers a range of products and services consistent with those offered by most national posts. Granados is particularly proud of the EMS service. “EMS is our premium service. It has received international awards due to the high quality of its service. In 2008 the UPU awarded our EMS service with the EMS Silver Cooperative award. Our EMS service was ranked fifth worldwide and first among the Latin American countries. We aim to be accoladed with the golden award in the future.”

Another interesting product is Postalito pack. This a priority parcel delivery service to the USA with a two kilo maximum weight and where the packing material is free. The product has a competitive price.

A real opportunity for Correos is remittances, which yield around $3bn to the local economy. Some 2.2m El Salvadorians live in the USA for instance. Correos does not currently have a remittance product, but is planning to offer one in the near future.

Moving the discussion on to technology and people, the director general outlined two IT programmes where Correos El Salvador is linked into UPU systems, namely: IPS (International Postal System), a powerful tool developed by the UPU Postal Technology Centre. This application supports the national and international operational processes, search system and tracking services; and the Rugby arrangements, the claiming system for EMS units.

Correos El Salvador has connectivity in more than 30 offices nationwide and aims to increase the number of offices connected during 2010.

Granados’ overview was that “our employees have better salaries and benefits than the employees of the private sector. The company doesn’t have automated processes. All processes are manual but supported by information technologies. ”

When quizzed on his role, Granados said: “I believe I can bring my professional experience and knowledge to Correos El Salvador in order to make it a profitable company with high quality services. I enjoy the challenges of this position but the economic recession which affects the growth of the national economy is my main concern.”

Granados outlined how Correos El Salvador will improve “by quality and quantity” in marketing (through new services and an increased presence in the market); in human resources (training, recruitment and personnel selection for example); in Infrastructure (construction and refurbishment of post offices, etc); postal equipment;  and the re-engineering of operation processes. All these activities “will help to increase the revenue in order to benefit the State, the workforce and the society.” he concluded.

“Where there is a good government there is a good post office.”

Biography: Lic Marlon Granados Pinto

Granados is a lawyer and a notary. From 1990 to 1997 he was managing director of the REAN Imports company and of the Goodyear subsidiary in El Salvador. From 1998 to 2000, Granados was a governmental lawyer and a member of the National Attorney’s Office. From 2001 to mid 2009, he was managing director and legal representative of Granados Consortium and Associates.

This article is featured in the March 2010 issue of the Mail & Express Review. If you do not receive the industry-leading magazine and don’t want to miss out, subscribe by clicking here.

Of course, it is possible to produce a plan using route optimisation software but anyone that has used these tools knows they do not always provide the most efficient routes for delivery. And as we start introducing more complex data such as timed delivery windows, the situation is only likely to worsen in terms of route efficiency, productivity and fuel usage.

As consumers we all would like to know when the driver will arrive but are we really willing to pay the price? It seems that in an attempt to differentiate, some parcel carriers are offering fixed timeslots for no additional charge which can only put added pressure on an already stretched industry. This could lead to further consolidation within the marketplace, reducing competition and driving up consumer prices in the long run.

The IMRG home delivery survey indicates that consumer preference is for direct delivery to the home with someone present to sign for parcels. With this in mind, does the consumer regard the green cost of increased convenience as acceptable, or will they consider alternatives?

Drop boxes, collection points and click and collect services have all been suggested as possible solutions, but these all have challenges to overcome before being viable options. So what alternatives are there to reducing transport efficiency?

It has been shown that service levels can be improved if a communication path is opened between the local courier and the consumer. Therefore, is it possible to use SMS messages currently being used just to inform us of delivery windows as a way of notifying the consumer of progress and allowing them to engage directly with the courier in 2 way communications? Well, carriers using such techniques have seen a significant increase in first time delivery rates from the low 80%s seen in most home delivery to high 90%s.

With current recessionary pressures combined with increasing awareness of what we are doing to the planet and added pressure on personal time, carriers are faced with a complex delivery challenge. These issues are not going to go away, so the industry needs to consider how it is to overcome the problem caused by such conflicting influences.

Replacing a senior executive is a long-winded and highly complex affair for any Board, so the bigwigs around Royal Mail’s top table must have been left downbeat once Adam Crozier made public his intentions to join ITV only three weeks later, on 21 January.

So with Smith’s promotion now rubber-stamped it’s a case of ‘one down, one to go’. The next appointment Group chairman Donald Brydon presides over will be huge. Not only will the candidate have to continue with the modernisation process Royal Mail is currently undertaking, but they will also have to contend with the consistent decline in mail volumes. That said the recent truce with the CWU will make the newcomer’s life that little bit easier.

There is no doubt that Crozier had his detractors, but when you consider he transformed a company that was losing £1m a day into a company that is making £1m a day, that seems a little unfair. Whoever is next to embrace the big leather chair inside the chief executive’s office at Royal Mail will not only have to contend with the expectations of the board in light of Crozier’s achievements, but will also have to appease the everyday postal worker, which Crozier failed to do- becoming some sort of hate figure in mail centres across the country for large parts of his tenure.

According to newspaper reports over the weekend, a potential candidate for the role is Kate Swann, WH Smith’s chief executive. The Mail on Sunday said that Swann was the preferred candidate of a shortlist of three suggested by Egon Zehnder, a head-hunting firm. Since joining the retail chain in 2003, Swann has transformed WH Smith by putting more emphasis on books and stationery, rather than trying to compete with companies such as HMV in the digital market.

I asked John Modd, director mail at Triangle Management Services, and previously managing director of Royal Mail International, what attributes the new chief executive will need in order to succeed at the postal operator. “He or she will need, above all, to be a good communicator who can create a feeling of belief in, and long term commitment to, the postal business. This was something that was lacking in the top leadership during the Leighton years. Royal Mail is more than just a macho managerial challenge. It’s also about merging heritage with technology; and inspiring trust in both customers and employees. It’s a difficult job make no mistake,” he said.

Swann is a highly respected individual, and has been linked to other chief executive jobs over recent years, including Marks & Spencer, so could she be the one to take Royal Mail into a new era?

Please post your thoughts below…

The findings come from two surveys carried out by Postcomm, the regulator for postal services. One spoke to 1,116 residential customers and 500 small and medium-sized companies and the other spoke to 800 businesses in the UK which spend more than £5,000 a year on mail. (The latter refers to licensed area mail which weighs less than 350g and costs less than a pound to send.)

The results revealed that eight out of 10 householders and small businesses are satisfied with Royal Mail, and around half of householders are very satisfied with the company. Larger mailers (companies that spend more than £5,000 on mail services), who have a choice of postal providers, rated Royal Mail as well as its rivals eight out of 10 for satisfaction with the service they receive.

Tim Brown, chief executive of Postcomm, said: “These are difficult times for post but these results show that despite falling volumes in mail as a result of the changing world - and even despite strike action - customers say they’re generally pretty happy with their postal services, whether they get them from Royal Mail or rival operators.” When residential customers and small businesses were asked to rate their satisfaction with specific aspects of the Royal Mail service, the number of days mail is delivered each week and the proximity of the post box were given the highest ratings.

But when householders or small to medium businesses experience mis-delivered, damaged, lost or delayed mail, or have made a complaint, their satisfaction rating drops quite dramatically. And the majority of complainants are not satisfied with the way Royal Mail handled their complaints, scoring parts of the complaints service an average of five out of 10 or lower.

Larger mailers who were asked to rate the quality of service they received from Royal Mail and their competitors (such as DHL, UK Mail, DX Network Services, Secure Mail Services and TNT Post), scored them as virtually equal - 7.4 out of 10 for Royal Mail - 7.6 out of 10 for their rivals.

But the gap widens a little when the same companies are asked their likelihood to recommend the service to other businesses. On a scale of one to 10, where one is not at all likely to recommend and 10 is very likely, rival operators average 7.7 out of 10 and Royal Mail averages 7.4 out of 10.

Curiously despite how satisfied larger mailers are with Royal Mail, their loyalty to the company has decreased. The percentage of respondents who said they would never move their mail to a rival has almost halved in the latest findings compared to 2007 survey results.

The survey of householders and small and medium sized businesses was carried out over the phone by Ipsos MORI. Data was weighted to be representative of the UK population of postal users and small to medium sized businesses. The survey of businesses that spend over £5,000 on mail was carried out over the phone by ORC International.

“LiveScience says federal regulators are taking this possibility seriously after receiving a tip suggesting the design of Toyota’s chips, processors and software could make them especially vulnerable to cosmic radiation. According to a USA Today analysis, speed-control problems comprise a higher proportion of Toyota owners’ complaints to authorities than any other automaker. But Toyota is hardly alone in facing this threat — electronic components play an ever-larger role in controlling our vehicles, so theoretically it could happen to any car.”

We have over the last 15 years become increasingly reliant on technology for nearly all aspects of our lives - in the home, in the car and at work. What we appear to have overlooked or not clearly understood is the impact that factors external to the earth we live on may have on this technology.

There has for some years been fears of Solar Storms causing major problems and a couple of years ago I wrote a short story called ‘Mail on Mars’ that detailed just such an event where a solar storm took out all the communication technology and society had to reinvent the mail. This story was aimed at triggering thoughts around idealised design, if you had nothing what would you build and why? This latest story in Wired brings this to the fore again - what would we do if cosmic rays can in fact disrupt integrated circuits - will we get a new panic such as the millennium bug fiasco of 9 years ago - or will we ignore it and hope it never happens?

How many companies still have manual systems? How many organisations even consider what would happen if there was a major technology glitch? What would YOU do if the internet went down - forever?

I realise these are difficult questions and hopefully ones we will never have to face - but preparedness is one of the things that can minimise risk - are these questions that we should be asking?

Please spare a couple of minutes of your time as every one of our readers’ views is important to us.

CLICK HERE FOR THE QUESTIONNAIRE

A: Carl-Gerold Mende, CEO, Austria Post: This is an area in which the postal industry will have some interesting exchanges of opinions over the next few years. The borderlines between B2B and B2C become blurred more and more. What we have seen happen over the last few years will increase, namely, the former purist B2C sender has up to 25 percent of his goods in the B2C area. So, the question is, how are we going to see the development of competing B2C networks. Today, integrators are correctly seen as having an advantage because of their international connections. So, why should posts give away their nationwide delivery network advantage. In the short-term, I think we will see several competing systems either regionally or globally (a combination of posts doing things together or partnering with big integrators). But because of the unique capability of posts to deliver to the B2C market they have real a chance to prosper in the parcel business. Therefore, they have to be very careful how they are playing their cards.

A: Ingo Babrikowski, director general, Estafeta Mexicana S.A. de C.V.: The situation is Mexico is different. At the moment, we do offer almost the same services as the posts. So B2C delivery is currently a large portion of our services. The deciding factor for our customers is Quality, that’s how they choose.

Q: What strategic thinking went into the growth of ecommerce in order for posts to offer a wider solution to customers?

A: Franklin Sluis, general managing director, Nieuwe Post N.V. Netherlands and Antilles: With the steady decline in regular postal mail volume and e-substitution we knew we had a problem. However, our philosophy is: with every problem arises an opportunity. We have a viable postal network. So, if we wanted to survive in this business climate we had to start thinking of a new type of business. That’s how NPNA’s E-beezz Online Shopping Portal came about. Today, E-beezz positions postal partners as e-commerce leaders with an all-inclusive solution for online shopping, logistics and customer service.

Q: Over the past few years, a troubled relationship has existed between national posts and private operators. Can you comment on the current situation?

A: Ingo Babrikowski, director general, Estafeta Mexicana S.A. de C.V.: In Mexico and other South American countries there is a clash between the Universal Service Obligation (USO) on behalf of the government and high quality level of service provided by private operators. Our belief is that the government should accept this situation and regulate the postal service accordingly. Unfortunately, that is not happening at the moment.

A: Carl-Gerold Mende, CEO, Austria Post: In Europe there is a different angle to this relationship since national regulation authorities are involved. For example, in the UK all competitive developments have to identified, discussed and agreed upon by the regulator before you can move forward. However, in Austria the legislation which becomes effective in 2011 allows us to compete freely in all areas which do not involve individual letter mail pieces handed over to the post office. The USO debate here needs to address the basic question: what does the post of the future look like? Currently, regulations do not allow posts to become a communications company. Posts are strictly a delivery company. But, if posts are to compete commercially they need to change with the times.

Q: How do you see the role of the UPU in re-defining USO?

A: Richard Miller, managing partner, Market Response International: The UPU does have the Consultative Committee studying this issue. One of their charges is to come up with a broad recognition of what USO is. In the end, however, it will be up to the individual countries to decide. It’s really a national issue that’s embedded in the national law of some countries and not others. So, it varies considerably.

A: Carl-Gerold Mende, CEO, Austria Post: The UPU is the only forum where basically all postal operators in the world come together on an operational point of view.  The CC has opened an avenue into the commercial debate. The main demand in this respect must be that postal operators need to live up to reality and protection of their market is never going to be the final decision. It may help for a year or two. But, it is never going to be sustainable solution. The only way the post office has a chance to survive is if it is cut loose to fairly compete with everybody who is competing with it. And that is the challenge we have. We need to start controlling our own destiny in all the forums available to us or else it is going to be extremely difficult to keep the posts alive.

Please share your thoughts below…

To join the World Mail & Express Americas Conference discussion group on Post&Parcel, click here.

Herbert-Michael Zapf, president and chief executive officer, IPC, said: “This is a very satisfying continuation of the high level of letter mail service performance and of the commitment of the postal operators to service excellence to their customers.”

To read the full news story, click here.

To read the report in full, click here.

But this story made me think about the impact of climate change on the postal services around the world. OK, in a blog post I am not going to go into a huge amount of details but I can at least, hopefully, get you thinking about the medium term impact of our current change in weather patterns – whether this is man made or not I will leave up to your judgement!

Weather: We have seen around the world that weather systems are changing and becoming more extreme. This phenomenon brings problems for the postal services whether that is snow, drought, earthquakes or winds, they all cause headaches for delivery of services. I was speaking to friends in Connecticut over the weekend and they had been without power for six days as high winds had brought trees down and with it the power lines. Interestingly for many residents the mailman was the only form of ‘formal’ communication they have had. These types of events seem to be happening on an increasingly frequent basis and aging infrastructures and utilities etc. are having difficulty coping with the after effects. These events will continue to place pressure on those trying to service the basic needs of the community for water, power, communications and health care.

Resources: The availability of an infinite supply of resources will start to decline over the next 30 – 50 years. Water, oil, wood etc. will all become scarcer and therefore more expensive. One scenario could be that paper becomes a very expensive commodity as it takes quite large amounts of all these resources. The move to hybrid and electric vehicles is something that the postal services, if they are going to survive, must implement for when the cost of oil and petrol increase as supply potentially declines.

People: Climate change will potentially impact where people live and thereby where they want things delivered to. Rising sea levels have been projected for some time and although there are some small signs of this taking place the full impact could be quite devastating for coastal dwellers. If coastal areas are abandoned then the urban, non coastal, areas will become very crowded and this will place increasing demands on the social infrastructures, including mail. A second consequence of climate change is the working conditions for staff – the current trend seems to be hotter summers and colder winters, well for the UK anyway. This means that things like air conditioning, historically an American phenomenon, will need to come to more temperate areas – although current air-conditioning is relatively energy inefficient and therefore alternatives may be needed which could include dramatic changes in working patterns and building design.

Economy: Global Warming has become political over the last few years and is seen as a way of raising taxes and ‘forcing through’ new legislation and controls. This will mean increasing taxes in travel, energy etc. to fund sustainability in public services. This argument is potentially weak as the link to human activity and climate change is still not proven and there are experts on both sides that will argue their case to great effect. However this will not stop governments using the guise of climate change as a reason to increase taxes. On a separate note the change in use of resources will place pressure on the historic economic superpowers as society adopts new resourcing models.

Volumes: Over the last few years there has been a fall off in letter volume traffic as communication moves from physical to virtual (Email etc.) as they are seen as greener and therefore more acceptable means of communication. There has been a corresponding increase in the volumes of parcel and packet traffic as people shop online. I would suggest that these trends will continue to a point in 10 – 20 years time when letter traffic reaches a low point, becoming uneconomical to fund and operate a national postal infrastructure. I have done some long-term modelling of these trends and I predict that this point will come around 2034 or sooner if there are significant changes in weather patterns which force a change in customer behaviour.

There are probably impacts in other areas but in this short blog post I can’t cover everything – the post would turn into a white paper or whatever the equivalent is.

Most of this is conjecture and although there are good reasons for much, I suggest this is only one scenario and there could be another where everything is great and the changes in global weather are only a blip in the normal cycle of weather patterns.

I have written a few papers on the above effects over the last few years and if you are interested in following any of this up please get in touch.

What are your thoughts?

A brief overview of some of the profound changes facing the global postal industry, discussed during the two-day conference, follows: (For a more detailed look at each of the presentations, log onto: http://www.triangle.eu.com)

Customer Power: The traditional view of the postal customer has changed dramatically (Paul Vogel, director, Deloitte Consulting LLP, ‘Towards a multi-channel post‘). Ongoing changes in communication technologies (Smartphone, Kindle, Netflix, iPad, iPod, etc) and social media (Twitter, YouTube, AIM, Wikis) have changed consumer behaviour to ‘I’ (Individual) behaviour. To keep pace with these changes, posts must re-invent themselves to succeed. The ‘I’ customer is technologically savvy, sophisticated seeking a multi-channel post in which hybrid mail solutions co-exist with multi-channel messaging.

Relationship Between National Posts and Private Postal Operators: The competitive advantages of national posts are well known: nationwide coverage, network infrastructure, brand reputation, etc. However, private postal operators have achieved significant market share by providing competitive differences, such as, reliable timely information and technology (GPS controlled delivery, Web Service Platform, reports) and competitive pricing (Enrique Vegas, Commercial Vice President, Sevicios de Correspondencia ENVIA, ‘Competing against a strong national post’). For example, there are two hundred private postal operators in Chile. However, inequities still exist. Initiatives must be undertaken to guarantee equal and fair competition by eliminating the benefits that, by law, are given to the national posts (i.e. receiver delivery fee, tax free rates).

International Online Shopping: In today’s recession, Amazon’s international sales grew 47% (Marketwatch) and eBay’s international business was 55% of total revenue (USA Today/ABC News). Opportunities in international online shopping represent a vibrant, profitable open-ended growth area for posts (Franklin Sluis, CEO, Nieuwe Post Nederlandse Antillen, NPNA, ‘A Distinctive Postal Model‘). NPNA’s eZone service allows customers to order merchandise in the US online or via a toll-free number and receive the items at their doorstep. Phase 1 of NPNA’s program reaches 300,000 customers. However, marketing through postal partners in Latin America and the Caribbean expects eZone to reach to a combined population of approximately 600m.

Electronic Bill Presentment & Payment Service (EBPP): An innovative strategy to face the current downturn involves attracting new customers through new products/services and upselling/cross-selling existing customers (Ingo Babrikowski, director general, Estafeta Mexicana, ‘Responding to the needs of Mexican customers‘). In addition, to consolidated freight, fulfillment, warehousing/distribution and import/export services, Estafeta Mexicana offers Buzón E, an EBPP service where customers receivedocuments via the Internet which would normally be received in printed form. Document integrity and confidentiality are protected through a secure environment. With more than 300,000 documents delivered each month to 600,000 users, Buzón E has grown 175% in 2009.

The Post of the Future: As posts grapple with post recession strategies (business scope, business focus, people policy, social role) there are core competencies which the Post of the Future must include (John Modd, director mail, Triangle Management Services, ‘What is happening in the rest of the world?’):

-  secure delivery to home and work with technological support;

-  a new image that personifies ‘attractive to do business with’ via relevant applications like mobile phones, easy-to-use web-based access portals, call center capabilities and properly trained retail staff;

-  sophisticated financial products and services (e.g. money transfer) unlike ‘retail’ institutions

-  a mix of other unique products and services such as, Intelligent Mail, ‘Green’ mail, hybrid and end-to-end electronic, E certification/dot.post

This will require improved efficiencies in process re-engineering, a powerful supporting ICT backbone along with significant reductions in headcount and investment in appropriate operational technologies.

So, what will the Post of the Future look like? A deliverer of parcels which also delivers the mail … A powerful retail brand majoring on trust … An intelligent user of technology in operation and products … A smaller business than today, with better profit margins. No one knows for sure, but change will be vital in creating the Post of the Future.

Please share your thoughts below…

To join the World Mail & Express Americas Conference discussion group on Post&Parcel, click here.

This technology could be interestingly adopted in the postal and parcel world. Imagine that your local Postie had the ability to establish a social network as he went on his/her round. He became the hub of community communication as they delivered the mail.

For many postmen and women, they consider that they are performing a community service and this concept would extend this into the virtual world. Many smart phones already are locationally aware and can establish these networks automatically if the application is running. Consider the idea of the NearVerse or even PostieVerse being created in a 300 - 500m distance around the delivery agent - this could provide local news, gossip, information about items to be delivered, requests to leave an item if people aren’t at home, advertise local services (maybe ones with space capacity at a cut down rate),  etc. This would effectively reinforce the delivery agent as a central hub of the community.

Thoughts?

Many companies never review their mail spend, mostly because it falls under the radar or because the spend is spread out over a number of departments, so never really seems large enough to worry about.  In many cases those organisations who have reviewed their mail spend and made changes to secure significant savings tend to stop once they have reached the first milestone, looking back on what they have achieved, rather than looking forward to what other opportunities exist.

There are three phases worth considering:

1)     A company can cut costs through a process of streamlining, which requires taking a hard look at what and how mail is sent out. For example, can items be consolidated into a single envelope and still meet the target weight of under 100 grams, resulting in lower volumes of post? Is there sufficient volume to move to a Mailsort criteria, thus obtaining a lower unit price from Royal Mail?  For items which have to go unsorted, can the addressing criteria be managed to qualify for Cleanmail and further discounts?  Can the customer addressing file system be cleaned up to remove all incorrect addresses?

Poor database management can account for a significant proportion of mail costs, which is like throwing money away, because a company is paying to send something to someone who will never receive it.

2)     Once the first phase is complete, the company can explore opportunities to outsource the mail handling to another carrier, outside of Royal Mail.  This is commonly called Down Steam Access (DSA), which does not mean that Royal Mail will cease to handle your mail completely.  The alternative provider will collect, sort (if required) and deliver the mail into the Royal Mail Inward Mail Centre (IMC) for final mile delivery.

You might think that having two providers would increase cost, but in fact the opposite is true.  Many companies who have outsourced their mail in this fashion have managed to save millions of pounds per annum.  An added bonus is that most have also seen an improvement in delivery performance as well as better management information.  In the main the outsource provider will handle all Mailsort and unsorted mail, including Large Letter, although this needs to managed closely to ensure it is not more expensive.  Most companies however do not move packets or 1^st Class post through an alternative provider, partly due to cost, which brings us on to the final phase.

3)     Normally after a company has outsourced its post, it enjoys benefits including financial savings, but then takes no further measures to see what else could be saved.  Using 1^st Class post as an example, this method is often safeguarded with vigour, using a host of justifications:

o       The customer expects to have this level of service

o       It demonstrates that the company cares for the customer

o       It’s the way we’ve always done it

o       We need to ensure a quick response

The above is just a small sample of excuses, but there are many more, most of which do not hold water.  Can it honestly be said that if a customer receives their post twenty-four hours later than normal they will take offence, complain or leave? Usually when companies have made this change it goes unnoticed by the end customer and if there are complaints, then these can be managed accordingly.

There are always going to be a number of items that will need to be posted 1st Class but these can be identified during an initial assessment stage.

So how does a company make this change?

If a business is using a DSA model then all Mailsort 1 items will go via a two-day service as a matter of course.  For unsorted mail most alternative suppliers offer a two-day business service which is easily adapted too. If Royal Mail is being used it is just a matter of downgrading the letter. It is worth bearing in mind that companies can save as much as 118% on what was previously saved by adopting the DSA model, meaning that it is possible to double savings by just having a look at different options. Of course the exact level of saving is partly dependent on an individual company’s mail profile.

In summary, the first step to optimising a mail operation is understanding a company’s mail profile and spends, as it is likely to be costing more than is realised.  An organisation needs to ask itself, are there other alternatives that will benefit the company and is it viable to do so?  After changes have been made it’s important to have another look and challenge the norm in order to drive further benefits. Just because savings have already been made, and improved value for money, does not mean there is not more to be obtained.

By European standards, the cost of mailing letters and parcels in Switzerland is relatively low. These were the findings of the latest letter and parcel post indices compiled at the University of Fribourg. Of the fifteen most important countries compared, Swiss Post ranks fifth in terms of counter prices for letters.  It is the second least expensive parcel service provider in Europe, having advanced up the rankings by one place in both indices since the last survey. Customers in Switzerland also benefit from exceptionally high delivery quality and a clear service structure.

The chosen methodology from the Centre for Research in Economic Statistics CEStat.ch at the University of Fribourg (Prof. Brachinger) enables a direct comparison to be made between letter and parcel prices in different countries. These two indices are based on a basket of all the letter and parcel categories offered to private customers at the counter. The categories are weighted according to the frequency with which they are actually used by consumers. The cut-off date for the latest survey was 15 January 2010.

Second and fifth in the rankings

Swiss Post ranked fifth among the fifteen most important European countries compared in the Letter Post Index, improving its position by one place - due in no small part to the price cuts for large letters. For example, comparable letters in Germany and France cost 17% more, and almost 40% more in Sweden and Denmark. And the Italians are expected to pay almost 60% more than the Swiss for their letters. According to the Parcel Post Index for private customers, Swiss Post is the second least expensive company in Europe and had also improved its ranking by one place since the last survey. Only in Austria are parcels less expensive to mail. Prices in Germany, Belgium and Portugal are all slightly more expensive than in Switzerland, whereas prices in the other countries in the comparison are much higher.  Mailing parcels in Scandinavia is particularly expensive.

More quality for your money

The Letter and Parcel Post Indices do not take into account the different services offered in the individual countries upon acceptance or delivery. As these services are very extensive in Switzerland, the Swiss get more quality for their money. Although the cost of mailing letters in Spain and Ireland, for example, is lower than in Switzerland, only around 80% of A Mail letters reached their intended recipients on time in 2008. In contrast, almost 96% of Swiss A Mail letters reached their destination on time in 2008, and almost 98% in 2009. In the context of the Parcel Post Index, some slower products had to be incorporated, as not all countries in the comparison offer next-day parcel delivery.

Advantageous formats

Letter formats and weight categories, which are very generous for private customers at Swiss Post, were also not taken into account. For example, Deutsche Post charges at least EUR 1.45 for C5 items, the most commonly used format for letters in Switzerland.  For individual letters weighing up to 100 g, Swiss Post has just one price for A Mail and one price for B Mail. The advantage of this is that private customers rarely need to weigh their letters in order to frank them correctly.

Price adjustments for letters and parcels

As per 1 July 2009, Swiss Post simplified its prices for large letters and lowered some of them too. Business customers also benefited from further price cuts. The agreement concluded with the price supervisor includes price advantages of around 200m Swiss francs. Consumers and the economy are currently benefiting as a result.

The prices for parcels will be adjusted on 1 April 2010 - as previously announced in a press release. The price for mailing heavy parcels will fall by one Swiss franc. Lighter parcels will cost one franc more unless they are prepared and prepaid via the WebStamp online service. These will be the first parcel price adjustments to be implemented since 2003.

Or, try this: “RM and CWU agree that the length of delivery span can be an enabler in bringing about mutual benefits. From now on, within the process of duty revision negotiations, spans must be looked at in the context of an enabler rather than a fixed amount of time to be aimed at.”

What does that mean? Simply translated “an enabler” means the opportunity to impose longer delivery spans. They can’t come out and say it directly because they know we are already overworked and will protest, so it’s hidden away in this obscure form.

But, to summarise, the agreement makes a number of significant changes to our working conditions and working practices. One of the most problematic is door-to-door (that is “junk mail”). Currently we take out 3 items per household per week and are paid separately per item. On average we would take home about £30 for this. The new agreement lifts the cap on the number and transfers it into our workload. We will no longer be paid separately. Instead we will be given a weekly supplement of £20.60, pro rata for part-timers. That figure also includes compensation for the loss of the early shift allowance.

In other words what this amounts to is a significant cut in pay for a significant increase in work: more work for less money. It will be even worse for part-timers as the pro-rata element means they will be taking out the same amount of door-to-door for half the money of their full-time colleagues.

This must be the first time in history that a workforce has gone out on strike in order to achieve a pay-cut.

Another problematic area will be longer Saturdays. Traditionally Saturdays have always been a short day to allow posties the benefit of a Saturday afternoon with their families. From now on Saturdays will be like any other day: maybe even worse, as there’s talk of Saturday-only door-to-door deliveries too. With the combination of later start times which will be rolled out for the entire week, this will mean some posties still being out on their rounds at 4.00pm on a Saturday afternoon. Too late to catch their boys out on the playing field or any other leisure activity.

Vague platitudes about “family-friendly” policies and half-hearted nods towards issues of stress and fatigue are no compensation for the very real damage this will cause to postal worker’s home lives and conditions at work.

Visit Roy’s blog at: http://roymayall.wordpress.com/

Italy’s leading postal services operator, Poste Italiane offers universal postal services and integrated communication, logistics and financial services and products throughout the region. Employing more than 155,000 people and boasting a network of 14,000 post offices, 40,000 vehicles and around 200 sorting centers for mail and parcels, Poste Italiane generated net revenues of €17.8bn for the fiscal year ended December 31, 2008. Early in 2006, Poste Italiane launched a customer relationship management program. Aimed at improving customer strategy, standardising processes across its business units and providing a unique multi-divisional view of customer information, the initiative was designed to both diversify the postal operator’s business and help the sales force to better understand customer behaviour.

Such a capability affects all of Poste Italiane’s commercial channels (private and business customer markets), Poste Italiane’s postal services and Bancoposta business divisions and the whole of Poste Italiane’s customer base: business customers, comprising close to 100,000 large and top account customers, 1.7m small and medium business and small office home office customers and retail customers numbering almost 32m.

To put the program into practice, Poste Italiane needed to work with a company that had cross-functional skills in SAP-based solutions including SAP CRM, technology architecture capabilities within public service, and dedicated postal and banking industry specialists. Poste Italiane selected Accenture whose involvement spanned from the requirements-collection phase to roll out-phase, covering in particular: process design, functional design, technical design, development test, deployment, roll out strategy definition, training, technical architecture design and set up, capacity planning and environment operation (including production environment).

“We had a solid team, both from a functional and a technical point of view,” said Roberto Marinelli, senior executive-Health & Public Service, Accenture. “With strong collaboration and a keen orientation toward measurable results, we were able to focus on the real requirements of Poste Italiane users. Moreover, we were keen to support end users in Poste Italiane branches across the country. We knew from experience that the cooperation of the people out in the field would make a significant difference to the project’s overall success.”

Breaking down this large-scale program into manageable components, the initial processes implemented were presales, post-sales, marketing and customer analysis which were then followed by the implementation of campaign management and sales processes. The customer relationship management capability focused on two aspects: Customer segments-the project team started with the business and small to medium business segments and then moved to consumer segments; and business processes-sales force automation, customer analysis and marketing strategy were all identified as key processes with the end goal of transforming the postal operator’s sales approach to customers.

Also important to the program’s success was the use of an enterprise data warehouse to ensure the consistency of data transferred from legacy systems. In addition, a thorough but pragmatic approach was adopted that involved introducing prototypes and customising them to gain the acceptance and cooperation of users. By employing a change management program, the Poste Italiane workforce was encouraged to embrace change through a series of communications that clearly set out the new customer strategy and the benefits to both the workforce and Poste Italiane from the new customer relationship management program.  Achievement milestones were highlighted and the rewarding nature of the process reinforced.

“The customer relationship management system proved to be an enabler for business transformation, integrating and standardising business processes across business divisions and commercial channels,” said Stefano Sappino, Head of CRM Program, Poste Italiane. “Benefits gained along the way include: identification of potential opportunities for cross-selling, transformation of sales approach towards customers, enablement of a customer-tailored offerings, support for launching new products and services and the availability of integrated customer views through segmentation and purchase history analysis.”

Accenture research[1] has shown that a consistent, differentiated customer experience has a greater effect on customer loyalty-and, by extension, on growth, profitability and shareholder value-than any other factor related to managing customer relationships. Additional Accenture research[2] in the postal industry shows how strategic choice and capabilities are critical drivers to achieve high performance. A strategy of diversification-away from the traditional mail product-has emerged a clear winner, and it is here that Poste Italiane has proved to have strong performance indicators on parameters like return on capital and employee spread.[3]

A large scale project with a high-volume activity, the new customer relationship management system is reaching 24,000 users in 14,000 Poste Italiane post office branches across Italy and more than 33,000,000 customers (across large and top accounts, the small and medium business and small office home office and consumer segments).  Ongoing work includes further development of the sales processes (through better integration with the back-office system) and multi-channel customer relationship management (employing the Internet and contact centres to better effect).

Having achieved its transformational goal, Poste Italiane can now enjoy the benefits of diversification through its enhanced customer relationship management capabilities.

“Poste Italiane considers the customer relationship management platform a key asset to our business strategy definition, planning and execution,” concluded Sappino.

Further reading: Mail & Express Review August 2009 and May 2009 issues for more information about high performance in the postal industry and the impact of customer centricity.

[2] Source: Achieving High Performance in the Postal Industry: Accenture Research and Insights 2009

[3] Employee spread is defined as revenue per employee less operating costs per employee.

The idea of the tablet format raises an interesting question/opportunity for the postal industry for virtual mail delivery. This could be the tipping point for hybrid mail!

The large, high resolution screen is similar in size to a piece of A4 paper, and so provides all the visual clues that the reader needs and associates with paper mail. The instant ‘on’ capability of the Apple operating system means that there is no long wait whilst the things boots up.  Navigation is by touch and there is no cumbersome keyboard to try and navigate around the page and the device is light enough to carry around.

As the iPad has not yet been released to the public (3 April is the new date so I understand) most of this is still conjecture. A few years ago, I remember suggesting that banks, etc. might provide low cost laptops or Amazon Kindles for their high value customers to manage their accounts, however with the launch of the iPad this could now become a reality.

It would be interesting to look at the economics of offering such a service and understanding what a business model would look like for it to become a reality -

• What price would the iPad have to be to make it attractive?
• What infrastructure would nee to be in place for to become a window into hybrid mail?
• Could it be subsidised from advertising?
• How would customers respond to receiving their mail this way?
• Would there be cost savings by not delivering to certain households or would this be insignificant?

If anybody is interested in looking at this business model let me know and lets see if we can make it work!

According to the official communiques, both sides in the postal workers’ dispute are delighted with the complex deal that has been ironed out over the past weeks. The CWU is calling it a 6.9% pay rise over three years; the management is hailing the agreement as opening the way to “transformation” of the business. But before they vote for it, Royal Mail staff should read the small print of the 80-page document. I had the opportunity to pore over a leaked draft version, and in my view, whatever is being said about it by senior officials, this deal does not deliver.

Let me explain. There are two blocks of flats, with boxes in the hall, on my postal round. We deliver the mail to the boxes rather than to the flats: 12 boxes in each block. I usually drop the “door-to-door” off on a Monday, three items per household, 36 items to each block. This is the unaddressed mail, also known as “household” or “junk mail”. By the time I get back to the blocks on a Tuesday morning, both halls are swimming in the stuff. It’s all over the floor, pretty well all 72 items. People collect their mail in the evening, pick out the door-to-door and drop it on the floor. This is just one illustration of how much people dislike the stuff.

Currently, the cap on the number of door-to-door items is three per household. But with the ratification of the new agreement between the Communications Workers Union (CWU) and the Royal Mail, that cap will be lifted. The agreement doesn’t specify how many there could be. Six items, eight items, maybe more. It could be limitless.

Presently, we are paid per item, depending on the weight. We get a minimum of 1.67p per item, rising to 4.5p. This figure has stayed the same for the last 10 years. I have about 600 delivery points on my round, so at the minimum rate I currently take home about £30 for my door-to-door deliveries.

The new agreement will incorporate the door-to-door into our normal workload, so we will no longer be paid per item. Instead, we are to get a weekly supplement. According to my leaked copy of the agreement - now confirmed - that figure will be £20.60. That is inclusive of the early shift allowance, which is also due to be phased out. In other words, it’s a pay cut.

It’s even worse for part-timers. The figure is pro-rata. So a part-timer doing a four-hour duty will be getting £10.30, instead of the £30 he currently gets for taking out twice as much stuff, while at the same time receiving half the money of a full-timer doing exactly the same amount of work.

This is just one of the many benefits on offer in the new agreement, which has been reached after over three months of intensive negotiations between the CWU and Royal Mail. Other examples include longer Saturdays, traditionally a light day for Royal Mail employees so they can go home early and enjoy the vestiges of the weekend with their families. Along with later start times, due to be rolled out over the entire week, this will mean that some postal workers will still be out on the streets on a Saturday as late as 4pm. So much for the “family-friendly” policies the agreement also trumpets, or its commitment to reduction in stress and fatigue.

The clever thing about the agreement is that it disguises some of its worst aspects in a language that is so dense and impenetrable that it is difficult, at first, to know what it means. Take this, for instance:

“Royal Mail and CWU agree that the length of delivery span can be an enabler in bringing about mutual benefits. From now on, within the process of duty revision negotiations, spans must be looked at in the context of an enabler rather than a fixed amount of time to be aimed at.”

It takes a certain amount of literary interpretation to grasp that what that means is longer delivery spans. Again, the agreement doesn’t specify how long. Current delivery spans are meant to be 3.5 hours - which usually mean between four and 4.5 hours - a period of time of intense physical activity that the former Royal Marine and British military fitness expert Tony Goddard described as “unreasonable” on a Panorama programme last year.

More time on duty and more weight to carry are just two of the results of this deal, and all for less pay. Also hidden away in its gothic density is a massive real-estate bonanza for the private sector, as delivery offices in prime city-centre locations become “rationalised”. It’s no wonder the negotiations have been kept strictly confidential.

The “sweetener” for this will be a lump sum of £1,000 - actually, just the yearly “colleague-share” bonus moved forward a month or two; again, pro-rata for part-timers. So a full-timer can vote away his part-time colleague’s wages for what amounts to a lump sum he was already due to receive anyway.

Reading the agreement, you get the feeling that its only real purpose has been to cement the union’s position in the workplace. In order to achieve this, the union has had to swallow its pride and assume the role of cheerleader for Royal Mail’s modernisation objectives.

“Modernisation” in this case is a euphemism. It means siphoning off profits to the private sector.

Visit Roy’s blog at: http://roymayall.wordpress.com/

To read the full 80-page document, click here.

Please feel free to comment below..

The website is accessible through mobile devices.

“For the first time, TNT combined the publication of its Annual Report with the Corporate Responsibility Report, reflecting the company’s commitment to corporate responsibility,” said a company statement.

To view the website, click here.

The European postal industry has been under significant pressure since 2000 when volume growth in physical mail began to level off and then slowly started to decline through 2007 and 2008. While many postal operators have been able to maintain positive EBITs (Earnings Before Interest and Taxes) in their mail divisions,, a recent study completed by the European Envelope Manufacturers’ Association concluded that letter mail volumes in Europe could fall by as much as 23% across Europe by 2014.

In light of such a serious threat to their financial stability, we, as industry stakeholders, support the European postal operators in looking at opportunities to add new revenues to their business. However, we are increasingly concerned that these operators are exploring too many external or non-core business options and ignoring the significant potential that can be developed in the existing core mail business.

Most industry commentators tend to focus on the 20-30% forecast decline in mail volumes. Yet the most important ‘take home’ message for the postal industry from our study is that 77% of mail volumes are still likely to remain in 2014. We strongly believe that it is this latter figure on which we should concentrate as it is by effectively managing the 77% that we will ultimately control our own future.

Every communication channel has it advantages and disadvantages. While competition for market share exists at the periphery, the main physical mail volume for each channel is unlikely to be touched. The reason is because it works and works very well.

A case study on the continuing power of direct mail

For direct mail, this point was made very clearly in a presentation to the Association’s recent annual congress. The speaker was able to offer some observations of her experience in the US during the last Presidential election. She started by highlighting the fact that the Obama campaign spent an unprecedented $56m on direct marketing.

The campaign’s strategy was to employ all available direct marketing tools to ensure that consistent messages were heard and understood by all Americans. Without going into too much detail, the campaign team used SMS to ensure supporters were the first to know; Internet to offer an ongoing social dialogue; and telephone for ongoing donations (once contact had been made).

Importantly, the campaign team also made extensive use of direct mail in order to sell the Barack Obama message, to seek first time donations and to sign up new supporters (remember that direct mail is still opt out in most industrialised countries).

Perhaps surprisingly, the team also used the medium of the physical letter to set out Obama’s arguments, knowing that the recipient would read a well personalised letter in a quiet place without competing comments.

The presentation concluded that, within a well constructed direct marketing campaign, direct mail and even a personalised letter will attract people and will deliver the message. The underlying point the presenter was also making was that advertising and marketing is all about message delivery. To maximise the impact, creators must first develop a campaign and then consider the right media channels to use. It is all about fitness for purpose, nothing less.

Need to focus on the core

The European Envelope Manufacturers’ Association believes that business related letter mail has a strong future. The medium can still add more value to its customers’ businesses. It is imperative therefore that European postal operators review their business models (as we all must) but this should be done with a focus on developing the core mail business so that they can defend their market share in communications. Effectively, we need to protect the 77% of volumes that will remain in 2014.

As part of this defence, postal operators must also challenge some of the outdated industry standards and norms that are no longer relevant. It is imperative that they start to ask some serious consumer facing questions:

What about the possibility of lowering tariffs on addressed mail to stimulate business or offering the same tariffs for different shape products to take advantage of creativity in the business, which we believe will drive future mail volumes?

What about raising the possibility of a domestic rate for sending a letter from France to the UK (internalised via the Kahala Group) or from the UK to the Netherlands (internalised via TNT networks)?

What about offering no tariffs for pensioners or school children?  After all, everyone keeps telling us that they send nothing now so what can really be lost.

Postal operators must also look at exploiting opportunities where physical communication channels offer users significant benefits over their digital rivals. For example, a study undertaken by InfoTrends in selected European markets confirmed that the opening rates of invoices mailed in Europe range between 98-99% (2009). Other studies in France and the UK suggest that both consumers and businesses view receiving letter mail as a more professional means of communication.

Integrated physical and digital strategies can add value, but not always

It is not the intention of this article to suggest that postal operators avoid developing digital solutions for their businesses. Numerous studies clearly highlight the accelerated response from mixing the two channels (physical + digital). Also, a full service offering is likely to provide a strong business case to attract new clients. Nevertheless, we believe that, posts should first extract the maximum value from their core physical business. In doing so, we believe that postal operators will be in a much stronger position to develop a parallel digital solution that will add real value to their business, and not destroy it.

This point was clearly emphasised by Ulisse del Gallo of Accenture Global Postal Industry who wrote in a recent edition of Mail and Express Review that ‘the general approach …to digital communications…. tends to be managed as a defensive response to the drop in physical mail volumes rather than a comprehensive strategy to integrate traditional and innovative services. Often this puts postal operators in direct competition with service providers that already operate in the digital mail space. While those postal operators that have started document management businesses report double digit growth in that area, growth is seldom sufficient to make up for the rapidly decreasing volumes of physical mail.” (Mail and Express Review November 2009)

Final thoughts

The European postal industry appears to suffer from a lack of confidence in its own ability to meet the needs of its clients. This is despite the fact that it not only has a great product but it also has a network that services almost 100% of domiciled Europeans, This is a fact that is often overlooked despite the fact that no other written medium achieves this level of penetration.

This industry has a window of opportunity and a strong value added proposition. Let us take the time now to explore its many business opportunities.

In a dynamic and competitive environment, adapting to changes is no longer enough. To experience breakthroughs, transformation is now an imperative as it holds the key to opening up new possibilities and harvesting greater growth.

For this reason, Singapore Post Limited (SingPost) has been in a relentless pursuit to transform itself since its listing in 2003, way before the end of its monopoly on basic mail services in April 2007.

Foray into financial services

Since 2003, SingPost has been focusing on strengthening its capabilities and enhancing its three core businesses of Mail, Logistics and Retail. Besides reinventing its products and services across the business lines, SingPost has also been steering its operations and corporate culture from one that is process-oriented to one that is growth-oriented and customer-centric.

One of SingPost’s strategies is to leverage its strong retail network for diversification. In 2004, SingPost leveraged its long established tradition of trust and reliability to roll out its very first financial service, SpeedCash. The collateralised lending provides quick liquidity for the mass segment to meet their short-term cash flow needs.

Meeting unmet needs

In the subsequent year, SingPost entered into a partnership with GE Money to provide unsecured personal finance, ezyCash, reaching out to the under-served segment and providing a formal channel for its customers to enter the formal credit system and build their credit histories.

The accessibility of SingPost’s branches, coupled with GE Money’s expertise in consumer finance, put them in a good position to increase and fortify their customer base. Until then, banks and financial institutions were not allowed to offer unsecured loans to those earning less than S$30,000 per annum.

In 2006, GE Money and SingPost rolled out a new personal loan service, James, targeting a higher income group. A friendly and personalised service with flexible repayment options and fast approval time differentiate the service from those by the banks.

Taking consumer banking products further

As part of its strategy to offer high value products to its customers, SingPost collaborated with another bank in 2008 to distribute unsecured personal line of credit, PostLine. This partnership fundamentally expanded the sales and distribution channel of The Royal Bank of Scotland, formerly ABN AMRO, in a cost-efficient manner.

In 2009, SingPost forged a strategic alliance with UOB to distribute HDB home loans at selected post offices, offering customers yet another channel to have their home financing needs met.

Venturing into insurance and investment products

The offering of life insurance policies at post offices in 2005 marked SingPost’s foray into the distribution of insurance products, giving customers direct access to the financial consultants from Prudential Assurance. Subsequently, under its Care for Life brand, SingPost also offers unit trusts in partnership with Prudential Asset Management Singapore Ltd.

In addition, together with GE Money, a myriad of insurance products has been added including travel insurance and home protection plans.

Providing global remittance services

With globalisation, the world is becoming more borderless and people are increasingly working and living outside their home countries. In Singapore, foreign workers and permanent residents make up 1.2m of the 4.9m total population, resulting in the exponential growth of the remittance service.

Recognising the tremendous potential for remittance business, SingPost has been growing its remittance services under its CASHOME brand to offer its customers a secure, affordable and reliable way of transferring funds to over 200 countries worldwide. The use of CASHOME eliminates the need for customers to fill up forms at every transaction, thereby improving the process and providing a hassle-free experience for the customers.

Philippines, Indonesia, China and India are several of the major remittance destinations for SingPost. In addition to collaborating with Western Union to provide remittance services to its customers, SingPost also partnered with the Philippines National Bank (PNB) and the Bank Negara Indonesia (BNI) to allow its customers to send monies straight into the recipients’ bank account maintained with PNB or BNI. Its tie-up with another partner, Banco De Ore (BDO), also allows its customers to transfer funds to the Philippines, giving their recipients the flexibility of withdrawing the money from BDO ATMs, MegaLink BancNet or Express Net or PLUS ATMs worldwide.

In 2008, SingPost became the first postal service provider in the world to offer Visa Money Transfer. This enables the senders to directly credit funds into the recipient’s Visa card account. As of January 2010, monies can be remitted via VISA Money Transfer to Visa cardholders in 21 countries including Australia, India, Malaysia, Thailand and United Kingdom.

The availability of the 24/7 round-the-clock remittance service via SingPost’s Self-service Automated Machines (SAMs) for Visa Money Transfer, BNI and BDO remittance services further enhances the CASHOME remittance offerings to the customers.

Optimising retail assets

SingPost owns one of the largest retail distribution networks in Singapore through its tri-channel platform of 62 post offices, 299 SAMs and vPOST, an internet portal facilitating bill payments and offering online shopping and shipping services.

To drive more revenue through its assets, SingPost has been adding more services to SAM. It has also extended operating hours of selected post offices that experience high traffic, a win-win way of optimising its assets while providing added convenience to the customers.

Redefining customer experience

In 2008, SingPost reconfigured three of its post offices by integrating a shopping mall, a lifestyle restaurant and a child-care centre respectively. In so doing, SingPost has not only optimised its retail space and obtained better yield, but also injected lifestyle elements to enhance customer experience. The very essence of providing a more integrated and wholesome experience is for the company to stay relevant to the community and to reach out to a younger segment of customers.

Not constraining its retail space to a brick-and-mortar store, SingPost introduced a new mobile post office, PoWee or Post-on-Wheels, at Changi Airport Terminals 1 and 3 in 2009 to provide tourists and locals with a unique and more appealing postal experience, while enhancing the convenience factor.

Providing unique shopping experience

SingPost’s very own shopping catalogue, Shop@Post, made its debut in 2007. Leveraging its direct mail’s capabilities and the accessibility of its post offices, SingPost is able to offer its customers a wide range of lifestyle products and exclusive deals.

SingPost also grows and expands its online retailing via its internet portal, vPOST, enabling its customers access to goods, particularly from US and Europe, which they would not normally be able to access in Singapore. More than a secure portal for bill payment and online shopping, vPOST also rides on SingPost’s logistics capabilities to provide door-to-door parcel delivery.

Conclusion

SingPost’s strategic thrust has been to grow and extend its core competencies. Recognising the pressures from external challenges such as e-substitution and cost-cutting measures by the public and private sectors, SingPost has been expanding its operations beyond postal services. By bringing in more diverse and high-value products and services to its customers, and investing and capitalising on technology as an enabler, SingPost is transforming itself from a traditional service provider to a progressive, customer-oriented organisation.

This article is featured in the March 2010 issue of the Mail & Express Review. If you do not receive the industry-leading magazine and don’t want to miss out, subscribe by clicking here.

I was working at home this Monday – something I have not done for a while. Monday is recycling and rubbish collection day around our way and I hadn’t appreciated that where we used to have one rubbish collection we now have three – one for general rubbish, one for garden waste and cardboard and one for recyclable products.

This activity, which was once one vehicle with three guys, is now three vehicles with 12 guys. Apart from the extra cost of the wages for all these people, the carbon cost of three vehicles being used must be significantly higher – in carbon terms and well as in pollution terms as they are all diesel vehicles of course. It may be just our area but the vehicles seem to be smaller too, which will mean more trips back to the depot.

Don’t get me wrong I am all for recycling and am very diligent in making sure our waste is split into the various categories and receptacles – but you do have to question the cost of doing a collection rather than at a central facility. There are lots of rumours on the web about councils putting all the separated goods into landfill anyway as it is too difficult to actually find ‘homes’ for the split down products s – these could be true I don’t know.

It would be interesting to do a carbon calculation of the new ‘improved’ rubbish management system and do an equation of carbon in/carbon out and see of it balances or not.

Your thoughts?

MG: The country has a population of 2.7m in an area of just over 4.400 square miles. Interestingly, Jamaica has one of the highest penetration rates for cellular phones anywhere in the world. But this does not detract from the continued importance of the post, particularly for rural communities.

In 2008 we handled 78m items of mail, and 109,000 parcels, but volumes in 2009 will turn out lower. We have 300 post offices and 294 agencies. There are 2,400 employees.

Mail is delivered to residences and offices in major towns, and to approximately 37,000 private letter boxes. There are very few problems in making deliveries even in rural areas, as postal staff have intimate knowledge not only of their communities but also all the local residents.

As a government department we are not required to make a profit. However, the government is now moving to run the post office in full cost recovery mode - that is to take us off the budget.

JM: Tell us about your major customers.

MG: Our major customers are the utility companies, the commercial banks, insurance and trust companies, and the investment houses.

Most of our customers express satisfaction with our quality of service. My major concern is that they still do not have a full appreciation of our full range of service options.

JM: What is your relationship to government? What are the implications of your legal status as a postal corporation? Is there a separate regulator?

MG: The Postal Department is entirely owned by the Government of Jamaica. Any private sector involvement is restricted to a number of joint ventures with private sector companies for some commercial services. (Examples include bill payment services with Paymaster (Jamaica) Ltd, remittances with MoneyGram, and phone card sales with a company called Cool Cards Ltd.)

We report directly to a Government Minister through a Permanent Secretary. In 1995 the Postal Department of Jamaica was set up as a limited liability company to take over the previous civil service department.

The Postal Corporation of Jamaica became operational in 2000. However, it only has six employees because the requisite legislation to take over the Postal Department has not yet been enacted.  We still operate under the outdated Post Office Act of 1941. In consequence of this we have limited commercial freedom, and there is currently no postal regulator, although such a role is envisaged.

JM: Does this explain why you have two job titles?

MG: Yes, I am PMG of the Postal Department and CEO of the Corporation.

JM: When do you expect the legislative situation to be sorted out?

MG: Our parent ministry has placed our legislation on its priority list for completion. As it relates to a timeframe, this is still not clear.

JM: Are any of your markets open to competition? And how is e-substitution impacting on the Post’s business activities?

MG: All sectors of the postal market are open to competition in Jamaica, even though this is contrary to the existing legislation. Our main competitors are a vast number of courier companies and other informal players who seem to emerge on a weekly basis.

We have seen some evidence of e-substitution in our markets, but not extensively. Home shopping via the internet has been growing steadily in Jamaica and this has helped our postal business. However, this segment of the market is dominated by private couriers.

JM: Tell us something about the services you offer in your retail outlets. I assume significant numbers of Jamaicans work overseas and therefore the receipt of remittances is quite important to the local economy. What is the Post’s role in all this?

MG: Most of our retail outlets offer not only core products but a number of commercial services as well. Examples include newspaper sales, the opportunity to purchase phone cards, and facilities for bill payments.

We have ambitious counter automation plans which will allow us to extend our range of services in our retail network.

You are right in assuming that significant numbers of Jamaicans reside overseas. In fact, it is estimated that an equal number of Jamaicans live outside Jamaica as live in the home country, namely 2.7m. Remittances are therefore extremely important to the local economy, outstripping more traditional areas of economic activity including tourism and bauxite/alumina.

In order to capture a share of this significant and lucrative market, Jamaica Post has partnered with MoneyGram to offer remittance services throughout the island.  In addition, although we are not currently linked to the Universal Postal Union’s IPS remittance system, we expect this to happen shortly.

JM: Talking of the UPU, what are your relationships with this organisation and the regional grouping? Do you have any special one to one relationships with sister posts in the Caribbean region?

MG: We are members of both the UPU and the Caribbean Postal Union (CPU). We have strong, healthy relationships with both organisations and receive technical and financial support from them.

We have benefited in the past from staff training, as well as consultancy, undertaken to enhance our quality of service. For example, the Quality of Service Fund project and the Integrated Postal Reform and Development Plan. Most recently work has been undertaken to look at mail transportation throughout the Caribbean.

Jamaica has a great relationship with all of the members of the CPU, but shares a special one with Barbados and with Trinidad and Tobago. We have collaborated with both on a number of occasions, notably training alongside their experts in such areas as international marketing, accounting and courier services.

JM: What about your use of technology? In operational areas I presume it can be difficult to cost justify. What about technology supporting improved customer service?

MG: In terms of our operational infrastructure there are no plans to automate. Not only do our current volumes fail to warrant automation, but as you rightly indicate there is an overabundance of labour to execute these functions.

We have incorporated technology to offer track and trace for certain classes of mail, for example the Express Mail Service (EMS) and Registered Mail.

Where we are making a massive thrust is in the automation of our retail counters to improve our reporting functions and, most importantly, improve service to our customers. This is also critical to our plans to offer e-government and a full spectrum of financial services to drive revenue growth.

JM: Turning to you as an individual, Michael, you have an interesting mix of experience from previous non-postal roles. What particular skills do you believe you bring to the PMG/CEO roles at Jamaica Post?

MG: I believe I have excellent organisational and interpersonal skills. I also believe I am strong on team working. You also need good written and verbal capabilities in a high profile role such as this.  And from my time as Deputy PMG I bring a broad knowledge of wider postal operations.

JM: Finally, what do you enjoy most about your job, what causes you the most concern, and how optimistic are you about the future?

MG: I particularly enjoy the daily interaction with both my staff and customers; and I relish the opportunity to bring about the organisational changes required. We have already made changes in our operations structure as we seek to streamline our parcels and letters business to achieve greater efficiency. More widespread changes are now being contemplated as the full impact of the global recession is forcing the downsizing of the entire public sector in Jamaica.

If you ask me what concerns me most, then I would say our archaic legal position, and the slow rate of growth in revenue. That said, once the necessary organisational restructuring has been implemented, and the enactment of the required legislation is effected, postal services in Jamaica will have a very bright future, despite the numerous challenges that are abound.

This article is featured in the March 2010 issue of the Mail & Express Review. If you do not receive the industry-leading magazine and don’t want to miss out, subscribe by clicking here.

Our communication has become a 140 character or less chat rather than a considered conversation - we no longer ponder over what we say, we just say it - unfiltered and uncensored. To cope with this new staccato communication we have almost invented a new language - reducing words to a mix of characters and letters.

Is this good? For those who have read some of my previous posts you will know I think not - my view is that our legacy for the next generation is being lost in this ‘noise’ we now call communication.

One of the arguments for Social Media is the ability to increase and maintain contact with a wider circle of friends - which is sort of true, however the contact we have is typically very superficial.

No sooner had I penned the above when I came across an article in Wired magazine about how Twitter and Facebook make us more productive! What is interesting in the article, however, is the fact that Twitter and Facebook are responsible for a 1.5% drop in productivity in UK offices - how on earth do they come out with such a statistic as obviously it is 1.4 and not 1.5!

What are your thoughts on the new communications landscape - do you think it is attractive and/or sustainable?

I can speak from personal experience that, in Buenos Aires at least, it is almost impossible to go anywhere without seeing the distinctive OCA livery on people, vehicles and buildings.

Alfredo himself has 17 years’ experience in the company, primarily on the commercial side. He became CEO in 2006, and actually bought OCA in November 2009.

He explained the company has over 7,000 employees as well as 2,800 agents, or franchisees. They operate through some 150 branches. 900 vehicles are involved in the delivery of some 300m mail and parcels items annually. OCA covers the whole of Argentina, making it “the most important private distribution network in Latin America”, according to Alfredo. 2008 saw a 36% growth in revenue year on year.

As for OCA’s mission, Romero summarised it as “to consolidate market leadership by providing high value added services to clients through the development of innovative solutions using state of the art information technology”.

Products and customers

During our discussion it became clear that OCA has a wide range of products and services focussed on corporate sectors but also available to individuals. One of the segments served involves customised solutions for banks: credit and debit card deliveries, statements, documentation, and transportation of bank clearing. Other key sectors include telecommunications, government, retailers, electronics and pharmaceuticals. Some customers have been working with OCA for over 40 years.

As one might expect, direct sales and e-commerce are also important - and growing - market segments. “They represent lots of parcels for us. For example, OCA is the most important logistics operator for modems and cell phones.”

Legal communications, general corporate mail, printing, finishing and distribution also feature in the product portfolio.

“Recently we have launched the New Generation of OCA products which add more value for our customers through state of the art technology” Alfredo said. “Our tracking system lets the customer know each stage of the process until final delivery.”

I asked if there were any particular problems about delivering in Argentina, such as getting to isolated rural communities, or problems with the quality of addressing.

Romero explained: “We find no major difficulties in getting to rural areas except as a result of climatic factors, although timing and frequency are not the same compared to cities and other areas of higher population density. Basically the disadvantages are the lack of updated information such as recipient’s address or wrong zip code. However, we work together with our clients in order to decrease the volume of undeliverable mail.”

He went on to remind me of the work OCA has done in the areas of crime prevention and accident reduction, and the organisation’s pride in winning a World Mail Award for the programme.

Alfredo Romero

The competitive Argentinean market

Given the Argentine market is fully liberalised, I wanted to know whether there were requirements placed on OCA by the regulator in areas such as service standards.

Alfredo told me that the regulator is the Comision Nacional de Communicaciones, or CNC. Operators are required to register with the National Register of Postal Operators in Argentina, which is linked to the CNC.

Each postal operator is required to pay an annual licence fee of 5,000 pesos (US$5,000). The CNC is required to audit the quality standards of the registered operators.

Discussing regulation led us to talk more widely about the state of the mail and parcels market in Argentina. Alfredo confirmed that the advance of information technologies and the spread of electronic media had impacted mail volumes, particularly in regard to individuals.

But the internet had its positive side, as in other developed economies “not only for express packages, but reverse logistics, storage, inventory control, preparation and packaging of items requested by e commerce sites as well”. Modem and cell phone penetration in Argentina had seen significant growth. OCA has responded by developing products such as hybrid mail, printing, and other interactive platforms. “As a consequence we have seen that the internet has been increasing our volume,” Alfredo concluded.

Romero then spoke about the competition, both Correo, the national postal operator, and private sector competitors.

According to CNC data from 2008, Correo has a market share of some 41% leaving the majority of the market to the private sector. However, 126 private operators are fighting for the other 59%. Of these OCA is clearly the leading player, with a third of the private sector share and 19% of the total market.

The future

Building on its strong position in Argentina, Romero has plans to start operating outside of Argentina in 2010. He explained that OCA is a member of an international association of private mail operators in the Americas, ALACOPP, of which he is President. This stands for ‘Asociacion Latinoamericana de Correos y Operadores Postales Privados’. Operators in Chile, Colombia, Ecuador, El Salvador, Mexico, Panama, Peru and Uruguay, as well as Argentina, are members of ALACOPP. Opportunities exist for the cross-border exchange of mails and parcels between the members: “It brings the opportunity to achieve new challenges oriented to developing business between the market players,” Alfredo said.

I asked Alfredo what he enjoyed most about his job. What caused him the most concern?  How optimistic was he about the future?

He told me “it is very challenging for me to manage a team of more than 7,000 employees and to make customers feel satisfied with the services and products OCA offers them. My main concern is to continue the transformation of our products and services that is needed in order to keep growing in the future. Due to the fact that the economic crisis looks to be behind us, I feel very optimistic about the future.”

Given that full mail liberalisation in Europe is getting ever closer, I asked Alfredo for some final words of advice for other private operators who wish to compete with national posts:

“Full liberalisation is a fact in Latin America. From my point of view, and based on our experience, it’s a direction from which there is no way of return. Liberalisation offers a big opportunity for growth and expansion. The best example of this is Argentina itself.”

This article is featured in the March 2010 issue of the Mail & Express Review. If you do not receive the industry-leading magazine and don’t want to miss out, subscribe by clicking here.

We seem to be seeing a battle for supremacy - it is turning into a ‘mine’s bigger than yours’ argument almost devoid of customer insight.

Most of the users I have talked to over the last few months - real users not the tech heads - seem to be saying that what they want is a phone that works - and works well. Although the excitement of a phone that can do everything you didn’t know you wanted a phone to do the novelty soon wears off.

This is most notable in the passing of Apps on the iPhone - six months ago it was the first thing people talked about - “what apps have you got” - people swapping cool apps. This seems not to be happening - not where I am anyway.

There seems to be more and more people who are ending up with two phones - the smartphone to be cool and the simple voice only phone to make calls on. The issue always with a multifunctional device is that it is only a compromise. When you look at a device such as the iPhone - it has changed the world and how people think about technology, but it is not a great phone for voice calls, the GPS is very approximate, the memory is limited and the screen resolution is now relatively poor.

The question is are we going to see a Nintendo effect? If you look at the video console market there are some clear parallels - a technology escalator of Xbox, PS3, Nintendo all trying to out do each other with ever more complicated devices and games. Nintendo come along with a simpler device and much simpler games and steal the market - will we see the same with phones - I think we will and it will come from a very different place - maybe a Tata phone?

Is your usage of the smartphone changing?

What do you think will happen in the mobile phone market over the next 12 months? ]]> http://postandparcel.info/31481/features-innovation-in-depth/the-battle-for-howards-ear/feed/ http://postandparcel.info/31691/features-markets-in-depth-2/tnt%e2%80%99s-latest-financial-results/ http://postandparcel.info/31691/features-markets-in-depth-2/tnt%e2%80%99s-latest-financial-results/#comments Mon, 22 Feb 2010 11:33:42 +0000 Chris Dolan http://postandparcel.info/31691/in-depth/tnt%e2%80%99s-latest-financial-results/ The company reported a 58% drop in year-on-year profit for Q4 2009 and an overall drop in group profit of 50% for the last financial year. It made €25m profit in Q4, compared to €59m for the same period of 2008. Yearly profit fell from €556 to €281m, despite cost savings of €527m.

Peter Bakker, CEO of TNT, said: “Operating results in Q4 2009 were relatively solid in a trading environment that continued to improve, leading for the first time since Q2 of 2008 to a higher group operating income than the same quarter last year. However, this trading environment is still clearly below 2006 economic activity levels.”

A TNT spokesman said that the company “sees early signs of a somewhat improving trend in the economy, but remains cautious on a continuation of the economic recovery. Express volumes, revenues and results are expected to be above 2009 levels. Mail volumes and results are expected to be below 2009 levels. A continuous focus on cost and cash remains essential.”

To read the financial results in full, click here.

What do you think of the results? Were they expected? Is TNT in trouble? Please comment below…

The surprising thing is that the UK has continued to grow at around 8 - 10% per year with over 45m people now connected to the Internet (as of September 2009),

The population, historically, was predicted to peak at the 40m mark, however this has been passed and seems set tocontinue for the next year at least. With over 73% of the population connected, our dependence in this technology is increasing, and thereby our reliance on the Internet in all aspects of our lives. There has been some rumours in the past 12 months that the Internet is reaching capacity and predicted to fail at some point over the next few years. The impact of this on our lives would be pretty devastating.

We are currently having our house remodelled and we have been living in a hotel for the last 4 weeks - without the Internet. What was surprising is the feeling of loss that you have when you loose connectivity - there is a period of readjustment and going ‘cold turkey’ when I was really stressing out that I couldn’t connect. The ‘pain’ does subside after a while and you realise you can exist without a connection. Bearing in mind that this ‘learned behaviour’ has only taken place in the last 5 or 6 years it is amazing how dependent you can get so soon. It’s not just the ability to connect but it is the feeling of isolation that goes with it.

So back to the original point of the post - the continued growth in connectivity in the UK. The importance of the Internet now for the way we live our lives would suggest that it has now become a utility in its own right and thereby should be regulated as all the other utilities are. Regulation would bring standard levels of service as well as control over how the service is delivered and who to - the need for every household to be provided with a connection - a la the postal service!

Your thoughts?

So, when I heard that prices were set to be increased again - and the next time I journey t’up North it will cost me the grand total of five English pounds - it left me wondering whether  I am going to get value for money? Should I take the hit to the wallet? Or should I avoid the toll road and enjoy the views of beautiful Birmingham in all its glory (note: sarcasm), whilst tolerating the heavy flow of traffic England’s second city generates.

Thankfully, I only have to make that horrendous journey twice a year. But what about freight and express companies? The price for their vehicles travelling on the toll road is set to increase by 6.38% - or from £9.40 to £10. Although 60p isn’t the end of the world as a one-off, if a company uses it 20 times a day, it soon adds up. What’s the alternative? Sending your driver up one of the busiest stretches of motorway in the country, taking substantially more time, and seeing a drop in efficiency? It’s a bit of a conundrum, really.

It came as no real surprise to see the Freight Transport Association (FTA) pour scorn on the increase - and rightfully so. The increase is almost double the rate of inflation, after all. “The inflation-busting increases being foisted on heavy goods vehicle (HGV) operators who use the M6 toll road is bad for business, other motorists and the environment,” the Association said, also citing that there has already been  “a pronounced drop in traffic volume along the chronically under-used toll road”.

Stephen Kelly, FTA’s head of policy for the Midlands, offered an interesting insight: “Extra toll costs are the last thing the commercial vehicle sector needs, but by effectively closing the gate to this vital corridor for so many hauliers we are in danger of not realising the economic and environmental benefits that this road was built for in the first place.

“It is, frankly, hard to swallow the argument that this extra revenue will be ploughed into major improvements - what is the point of investing in a road which nobody can afford to use?”

“Even before the latest hike, those comparatively few HGV drivers who did opt for the quicker and less congested M6 toll road did so as a last minute distress purchase based purely on how bad they thought the alternative journey would be. This is far from perfect for those companies that need to plan delivery routes efficiently and the businesses that depend on a reliable supply chain will also suffer.”

The decision to increase the price by double the inflation rate is a strange. No doubt the toll road will suffer as a result of over-pricing, and, more importantly, the express and freight industries will feel the effects - whether that’s in their efficiency levels, or in their wallets.

What do you think of the decision to increase toll road prices on the M6? Do you work in the freight or express industry? If so, how will it affect you? We want to hear your views, so comment below…

Pölzl is increasingly focusing on innovation and customer orientation. “We have set ambitious goals for ourselves. In order to achieve this, the entire company and particularly our domestic business operations will have to undergo a far-reaching reorientation, placing much more emphasis on consumer-friendly services. We will decisively confront the risks arising from e-substitution and liberalisation and persistently exploit our growth opportunities,” said Pölzl.

The future postal market opens up new opportunities but poses challenges

Current developments in international postal and logistics markets indicate potential challenges to Austrian Post but also new opportunities. The most important changes are the upcoming market liberalisation effective January 1, 2011, as well as the substitution of letters by electronic media. International estimates forecast that these trends could result in a 3-7% annual decline in letter mail volumes. In contrast, the internationalisation of trade flows and the ongoing surge in Internet shopping will drive future growth in the parcels segment. Apart from major changes in the market, customer requirements are also further developing. On the one hand, the new digital opportunities are raising customer expectations in respect to online convenience. On the other hand, increasing importance is being attached to values such as confidentiality, data security and reliability of services.

Austrian Post aims to leverage existing strengths

“Austrian Post is a company with a long-standing tradition, which stands for confidentiality, reliability and efficiency. These are values which will be more in demand than ever before”, said Pölzl. In his view, there is absolutely no doubt that the company’s product and service offering will have to emphasize these values more strongly. “Who else if not us can combine a high level of data security and privacy protection with speed, convenience and easy accessibility? Precisely this apparent contradiction opens up new opportunities for us”, he added. For this reason, Austrian Post aims to leverage existing competencies and operate as the undisputed number one in respect to sending or receiving postal items and information, whether physically or electronically. In this regard, Pölzl intends to further expand the offering for private and business customers and more strongly exploit modern technologies.

For Austrian Post, innovation means customer orientation, product simplification and online activities

Austrian Post’s declared goal is to increasingly prioritise customer preferences and requirements by launching a service offensive for all its products and services. The primary aim is to make the service offering clearer and easier to use, reduce complexity and offer customers all services under one roof, whether physical delivery of mail or in the form of electronic services.

“In the future, the customer will be able to receive his mail items through the online portal of Austrian Post, enjoying the same protected private sphere as in his own living room”, Pölzl explains, underlying the company’s increasing emphasis on online activities. In an initial step in this direction, Austrian Post is offering customers, effective immediately, the opportunity to conveniently and securely request various postal services from their own homes, for example mail forwarding or vacation hold mail.

“But this is only the first step”, Pölzl states. “Our future portfolio will be more individually tailored to specific customer requirements. For example, the sender will be able to freely choose whether his mail is to be printed and enveloped or sent as an electronic file. Customers will also be able to configure parcel delivery options online, from packaging to the electronic parcel stamp. The recipient can decide how and where he wants to get his personal mail - to his own residence, place of work, to his preferred post office or from parcel “dispensers”. Alternatively, mail could be sent directly to a secure online portal of Austrian Post. In this way, Austrian Post offers its customers the highest possible level of convenience.

Four strategic cornerstones of Austrian Post

In the last few months, Austrian Post has intensively re-viewed its strategy and defined four strategic cornerstones for the Group.

1.  Defending market leadership in the core business
Austrian Post is the undisputed market leader in Austria, both in the letter mail segment as well as in the transport and delivery of parcels, particularly to private recipients. In 2009, Austrian Post gained additional market share in both segments despite the recession and tough competition. The Group aims to defend its strong position in the future, especially in the letter mail market, which will be fully liberalised in 2011.

2.  Growing in selected markets
In addition to defending its core business, Austrian Post will pursue growth in selected segments. The priority will be on the Parcel and Logistics Division, focusing on further expanding Austrian Post’s business in the combined freight temperature-controlled logistics and B2B/B2C parcel segments in Austria and Germany as well as in South/ Eastern Europe. Moreover, Austrian Post is expanding its service offering for letter mail customers.

3.  Enhancing efficiency and increasing flexibility of the cost structure
Austrian Post plans to further significantly increase its logistics and delivery efficiency to maintain its clear cost leadership in Austria. Key measures include the ongoing improvement of the distribution network, further expansion of the branch network while integrating more entrepreneurial models, and targeting cost reduction in administration costs and sourcing volumes.

4.  Strengthening customer orientation and innovation
Austrian Post will only be successful in the long-term if it can adapt its service offering to the changing needs of its customers. For this reason, the company will develop innovation throughout its business system and drive forward a broad-based service campaign. This includes an online initiative designed to increase the convenience of conventional postal services and new digital products in the field of electronic services.

Austrian Post has defined ambitious medium-term business targets:

Revenue: Medium-term growth of 1-2% annually
The goal is to achieve annual growth of 6-9% p.a. in the parcels segment, particularly focusing on international subsidiaries, in the light of a potential annual 3-5% revenue decline in the letter mail business.

High profitability: Sustainable EBITDA margin of 10-12%
Austrian Post will strive to further increase efficiency in all its operational processes, in order to secure long-term earnings and cash flow.

Dividends: Continuation of attractive dividend policy
Austrian Post intends to continue its current dividend policy i.e. a dividend payout of at least 75% of the Group net profit and a targeted sustainable dividend of EUR 1.50 per share.

On the way to the station this morning I passed a postman on his bike with four packs of letters – one on his back, 2 in panniers over the back wheels, and one across the handlebars, and wondered if an autonomous mule might be applicable in the postal industry.

The ‘mule’ in question was a 6 wheeled all terrain vehicle with advanced sensors and computing such that it can follow a soldier, avoid obstacles and return to base on its own to restock items and then return to the battlefield. The mule appears to be able to carry a load of up to 300 pounds and has fuel on-board for a few hundred miles and follows a tag that the soldier wears on his pack.

This concept seemed to be applicable to the postal worker who, unencumbered, by the weight of mail could walk faster and deliver more mail and packets, with his mailbag being restocked by the mule! He could not only be restocked with letters, etc. but presumably have his coffee and bacon sandwich delivered as well.

Of course there are many issues with this concept – pedestrian safety, traffic, and of course dog and cat safety - that would never make it acceptable. The other issue would be how could you stop it following you?

Anyhow, it got me thinking about are there other technologies from the military that could be deployed in the postal sector – apart from weaponary that is?

Thoughts on possible crossover technologies?