The Importance Of Being Nimble
Over the past 10 years, Jersey Post has shifted from a small island business to a global logistics provider, with operations in five continents. Post & Parcel speaks to Tim Brown, CEO Jersey Post, about the impact of Brexit, Covid-19 and how keeping on your toes is key to the company’s success.
How has the business changed since you started at the organisation?
When I started here in 2014 something like 60-65% of the business was on island postal business. We’ve now doubled our size in turnover and 60% of our business is not postal, it’s logistics, while 40% of our business doesn’t even touch Jersey.
Over the last five years Jersey Post has carried out 12 investment transactions ranging from Hong Kong to Australia, to the UK and the US
We’ve invested and bought into businesses, acquiring very good people in the process, so we use the skills in those businesses to influence the rest of the company and bring their way of working into the core business.
We still have a core staff in our traditional postal business that is profitable but also provides a service to the people of Jersey. We have to make sure we don’t forget the core skills we already have that need to run the business.
Can you tell me about the digital businesses Jersey Post has invested in?
In 2019, we took another step in our diversification strategy with the launch of our regulatory technology company Vaiie.
Developed from our mailing house business, Vaiie focuses on supporting organisations in their digital transformation through enhancing, securing, and digitising their practices and processes. It does this through building portal-based solutions for communications, financial controls and document distribution supporting remote collaboration and digital archiving.
It also has a RegTech business- RegTech is a sophisticated technology designed to solve challenges around everchanging regulatory compliance, risk management and data reporting.
Vaiie’s Regtech business supports onboarding, address verification and authentication with products that use the Universal Postal Union to provide enhanced assurance on locations and residency. It also provides the ability for organisations to verify customer identity using ID authentication, facial recognition and liveness checking.
It is all about empowering financial services teams to work swiftly, compliantly and effectively manage risk, whilst going through an engaging online experience.
It was chosen by the Government of Jersey in 2021 to develop a new digital ID verification tool enabling citizens to access government services online.
Vaiie is part of the Jersey Post Group, so while a market disruptor and innovator, it is also aware of our heritage and the trust that Islanders and businesses place on the Group. This gives balance and grounding which are crucial for Vaiie when working in partnership with our clients.
What were the main success stories, and the principal problems for 2020?
Obviously, there were enormous challenges in 2020 because of the pandemic. Every day was a Christmas peak in terms of parcel deliveries. Like every business, we had staff off sick and shielding, borders were closed, some warehouses shut early on, and there was a massive reduction in flights. Add to this the plummet in our foreign exchange business and retail counter sales, and you can see it was a very challenging time. Plus, don’t forget, we were also still preparing for the looming Brexit deal or no-deal.
We also know that our customers feared for their own survival as businesses closed offices and moved to remote working; consumers turned to online shopping to fulfil basic requirements as physical shopping was restricted. Companies were looking for instant answers to their logistics challenges, and we were there to provide solutions. These ranged from our team seeking air freight solutions out of Heathrow 24/7; to providing a comprehensive logistics solution to testing in Jersey and being responsible for getting samples to the UK and to test centres. Later on, we took over the consolidation of supplies and logistics support to the in-island test facility.
Despite these challenges, our online parcel service, Parcel Monkey, saw significant growth in the UK and US. We also won a multi-million-dollar five-year contract with the United States Postal Service for deliveries from the US to Latin America. There were new opportunities in Jersey, such as delivering online orders for the Co-op, and our digital arm, Vaiie, is developing into a leading in-Island RegTech business.
Through our various investments and acquisitions, we were able to offer an end-to-end e-commerce solution across borders. By investing in that integrated network, we were able to rise to the pandemic challenges and face the future with optimism. We could not have achieved this without the dedication and commitment of our colleagues across the world.
Have you succeeded in your strategy in becoming a global logistics company?
Our strategic approach has delivered a business with the capability to take advantage of the opportunities now presented and produce long term returns and value. Over the last five years, we have seen the strategy working through a steady increase in revenue despite the losses incurred by our core business and the costs of entering more competitive markets.
We have become a solutions-focused business working in partnership or collaboration with third parties. Therefore, the key theme of our strategy is to integrate our capabilities so that the solutions we offer continue to be greater than the sum of our individual parts.
How did the role of the postal workers change during lockdown?
During lockdown, our primary focus, both here in Jersey and internationally, was on playing our part in keeping people and businesses ‘connected’. The changes were dramatic and instant: the volume of letters fell away, parcel volumes increased by 71%, there were significantly fewer flights and boats, 20% of our people were self-isolating, and all of our customers faced their own set of challenges.
The team had to make operational changes almost daily to ensure that there was no disruption to the delivery of our core services. A very stark example was the increase in the number of parcels, which for our postal team meant that it felt like managing the ‘Christmas peak’ for most of the year.
On top of all these challenges, our posties did a superb job of stepping up to support the Island community here in Jersey with additional initiatives including issuing free ‘thank you’ cards, delivering prescriptions, free advertising for businesses and managing the conveyance of Covid-19 tests to the UK.
We know from feedback that our people have certainly ‘gone the extra mile’ to support the Island, and they are a credit to themselves and to the business.
The quality of the Jersey Post team has continued to develop, not just here in Jersey but also elsewhere across the world. Their enthusiasm, professionalism, creativity, and sheer hard work throughout the pandemic is quite humbling.
Do you think people understand how much your business has shifted from ‘posties and post offices’ to global logistics and e-commerce?
I think people understand there has been a shift, but perhaps not to the full extent, in part because we have striven to maintain a ‘business as usual’ approach for our customers. While everyone understands the shift to online retail, most people don’t stop to think how that item they ordered from the other side of the world arrives on their doorsteps, and actually, that’s the way it should be.
Essentially, it’s our job to ensure that parcel gets to them smoothly without drawing attention to the logistics. It’s also our job to ensure we can make a profit from that process.
How has Brexit affected Jersey Post?
While Brexit has brought about challenges, it has also brought with it opportunities. For our businesses, the impact has been mostly positive, but only because we were well prepared. We diversified and adapted where we needed to, added the skills to our team we knew we’d need and made the transition as easy as possible for our clients.
As we were already working globally, it has been easier for us to adapt than those businesses that previously only dealt with Europe. We have been accustomed to managing a complex process of customs checks for the countries we ship to and from. Around 180,000 UK traders and forwarders were only working with the European market pre-Brexit – that’s a lot of businesses needing to embrace a lot of change. Despite having that important global expertise and many of the required systems in place, we recognised early on that we’d still need to adapt, so we wasted no time.
With no trade agreement in place until Christmas Eve last year, we were second-guessing what the key issues would be, accurately, as it turned out. We focused on new requirements at Customs borders, educating our clients, and the issues around new EU/UK Preference origin rules which continue to be challenging now.
What do you see will be the key challenges for Jersey Post over the next 12 months?
We have ongoing challenges. However, market changes post-pandemic and Brexit and changes in international regulations on cross-border trade mean that the markets we operate in, including post, are more volatile year to year than in the past.
2020 demonstrated more than ever that the traditional core business that focussed on letters and retail counters is in decline. However, growth in e-commerce, especially cross-border, and digital provided growth and opportunity. The pandemic accelerated what were already existing trends (declining letters, increasing parcels, and increasing digitisation).
Sixty percent of our business is no longer postal; it’s logistics. We now have global expertise in cross-border logistics and a network of freight, warehousing, fulfilment and final mile in Jersey, so our recent acquisitions, fitted well in that strategy. This shift means we need to continue investing in transformation while maintaining the core services our Island community needs.
Looking back at an incredibly challenging and unprecedented couple of years how do you think Jersey Post has fared?
The last couple of years have highlighted how important postal services and posties are. It was that which kept us connected and delivered the goods that people needed but were unable to go out and buy. It showed how important it is to be agile and to grasp opportunities and not lament changes or the way things were.
The pace of digitisation of most services increased several-fold during the pandemic, which was no different for us. We were moving away from counter-service to online, and that has proven to be resilient and effective. It has been the perfect opportunity for our digital business, Vaiie, to expand its product range.
It has also shown the importance of diversification, and we want to build on that by increasing cross-border e-commerce and digital services. These aren’t new trends, just a faster pace. Our customers want wider solutions and we’re in a position to do that.
Finally, it helped change our mindset that we’re not different businesses, but one network which integrates and supports all areas across the globe.
About Tim Brown
Tim Brown, CEO of Jersey Post, has over 30 years’ experience in the post, parcel and distribution industry. He has worked in senior positions in Royal Mail and DHL Express, was CEO of Postcomm (the UK’s postal regulator), provided advice to government and was vice-chair of the European Regulators’ Group for Post. His previous work has included providing board-level advice, consultancy and interim management to post and parcel companies and their suppliers.