The age of sustainable digital transformation has begun
Eamon Kehoe, Marketing Manager at Escher offers insights into the complexities faced by postal operators as they endeavour to create a greener infrastructure.
“It is generally acknowledged that the process of digitally changing a company into a more sustainable organisation is complex and costly and will call for a commitment that is both constant and focused over an extended period of time. This process can be particularly complex and time-consuming for postal operators, especially state or semi-state-owned Posts, as they are subject to regulation and universal service obligations. Sourcing suppliers or environmentally friendly alternatives for essential technologies is also a substantial undertaking for any business.
However, for postal operators, who are an essential but heavily regulated component of a state and often require advocacy for business modifications, changing suppliers or switching to eco-friendly systems that help decrease environmental impact is a considerably more challenging endeavour.
So even if Posts manages to source and organise all the components to help transform their organisations, Escher’s latest research has revealed that approximately 80% percent of Posts must consult with a regulatory body when making changes to their networks – adding extra steps and complicating an already complicated process even further.
The comprehensive transformation of an organisation into a completely sustainable entity also necessitates financial viability and a precise understanding of the costs associated with either implementing or, perhaps more crucially, failing to implement sustainable practices. According to Escher’s ongoing research, cost and funding are consistently the top two obstacles postal operators must overcome when implementing sustainable practices. The third biggest obstacle is the limited availability of sustainable technologies and materials, which will have further cost implications, as availability typically increases the unit price.
Sustainability is a Cooperative Process.
Putting all the obstacles aside, postal operators recognise that transforming the fundamental structure of a business involves multiple layers and facets, requiring a comprehensive approach to address it effectively. In fact, the Universal Postal Union (UPU) argues that sustainability extends beyond postal operators and is only truly achievable with extensive cooperation and coordination among numerous stakeholders. In essence, this approach, which the UPU terms “hypercollaboration,” asserts that any individual or organisation who supplies or utilises services from postal operators should behave in a sustainable and environmentally conscientious manner. Or, to put it simply, postal operators, suppliers, and customers must all play a part in in making a fully sustainable postal industry a reality.
The UPU acknowledges that stakeholders, such as logistics operators, legislators, customers, e-commerce platforms, and technology providers, all share responsibility with postal operators in establishing environmentally friendly postal services. The UPU specifically suggests that customers’ main contribution to hypercollaboration is to constantly improve their understanding of how the choices they make when purchasing goods and services online can impact the environment. Customers should also be encouraged, and preferably incentivised, to select or request greener services whenever possible – as it is essential to recognise customers’ significant impact as a driving force for organisational change.
Rather encouragingly, there are signs that consumers may already be aware of the role they play in contributing to the development of a fully sustainable delivery industry. A 2020 study by the United States Postal Service Office of the Inspector General (USPS OIG) found that customers prefer sustainable delivery and are willing to pay extra for environmentally friendly delivery services. According to this research conducted with a sample of 2,800 postal customers from 18 international Posts, 56% of the participants expressed apprehensions regarding the environmental consequences of deliveries. Furthermore, 41% of the respondents emphasised the significance of ecological practices when selecting a delivery business. Notably, 52% of surveyed U.S. customers expressed a willingness to pay a premium to support sustainable practices.
In spite of the fact that consumers are becoming more environmentally conscious, for many, the primary focus when buying goods online is still speed and convenience rather than the sustainability profile of the delivery company.
However, sentiment is growing all the time, and newer and more environmentally conscious consumers are becoming the dominant e-commerce demographic.
Meaning, there may be a significant business opportunity for postal operators who can create a sustainable delivery profile that also offers convenience, speed, and cost-effectiveness.
How are Postal Operators currently tackling sustainability?
Escher’s latest research has revealed that postal operators are aware of increasing environmental consciousness and the importance of establishing a sustainable corporate culture and offering environmentally friendly services. As of the time of writing, 52% of Posts routinely monitor their sustainability performance, and 43% actively solicit customer feedback on their sustainability initiatives. The Future of Posts 2023 research found that 38% of postal operators intend to cut their carbon emissions, with 19% aiming to achieve carbon neutrality in the not-too-distant future. Another 38% have said they plan to cut their carbon emissions, and just 5% of Posts assert to have achieved their carbon targets.
Most significantly, when asked how they are putting their carbon strategy into action, the majority of post offices are transitioning to hybrid or electric vehicles (77%), reducing the amount of garbage they produce (76%), and using renewable energy to power their facilities (73%). Furthermore, 47% of businesses are making the switch to environmentally friendly products and services, 45% are making use of recycled materials, and 39% are investing locally in sustainable causes. At 34%, carbon offsetting is the least popular activity among postal operators. However, many thought leaders in the area of sustainability argue this particular initiative should only be used as a part of a more comprehensive strategy.
A new era of delivery is upon us.
By now, it is common knowledge that the greater reliance on postal services for basic needs during the global pandemic has had an enormous and profound effect on postal operator’s networks and strategies. Initially, many postal operators rushed to find solutions to the sudden increases in parcel volumes. But as time passed and more and more opinions from inside and outside the industry (including politics and academia) predicted people would not return to pre-COVID shopping behaviours, Posts began converting their short-term solutions into long-term strategies. In hindsight, this move may have been premature, as more people than predicted resumed older shopping habits and now own a more hybrid shopping persona that includes a greater balance of online and offline shopping.
But despite the difficulties and shifting challenges Posts have faced as a result of the global pandemic, the drive towards a sustainable industry has been brought back to the forefront of politics and business agendas as businesses returned and greenhouse gas emissions increased as travel restrictions began easing.
There is a lot of work for postal operators to do to develop comprehensive carbon reduction strategies or climate action plans that include clear objectives and targets. Arguably, Posts should start the process now to maintain/create a competitive advantage and avoid being overwhelmed when climate disclosure reporting becomes mandatory. Despite the many obstacles, such as a lack of sustainable materials and technologies or the difficulty in creating a sustainable delivery profile, many thought leaders in the delivery industry believe it would be a mistake and, crucially, a missed business opportunity to dismiss sustainability. Regardless, the drive toward sustainability will continue, and based on growing consumer sentiment and awareness, it is only likely to intensify over the coming years.
The UPU’s assertion that establishing a sustainable postal sector will require the active participation of all stakeholders is both rational and well-founded. There is every indication that Posts can achieve a competitive advantage by proactively implementing well-defined strategies that gradually enhance and support sustainability. By aligning themselves more effectively with their customers, postal operators become a more appealing choice for delivery in the short to medium term – opening up numerous business opportunities in the long run.
Whether postal operators are early adopters or laggards when it comes to embracing and implementing new technologies, the growing sentiment among the public around sustainability may compel Posts to provide green services or, in some cases, to digitally transform their businesses in a sustainable way sooner rather than later.”
Download your FREE copy of the Future of Posts 2023 report here: https://www.eschergroup.com/resources/the-future-of-posts-2023/
