Transatlantic Lynx: Partnership with USPS

Lynx Express has entered into a three year agreement to jointly pronlote and sell a United States Postal Service (USPS) product called Priority Mail in the UK and Europe.
The parties will collaborate on branding, sales and marketing initiatives, and packaging design, with the goal being to capture a substantial share of the west bound distribution market over the next three years.
Lynx has been selected as the partner to spearhead the launch of this product’s availability in Europe. Distribution businesses are the target, rather than pure mail type accounts.
Trials of the service will be carried out over the next couple of months with the full blown retail proposition available towards the end of September.
Lynx chief executive David Burtenshaw speaks with pride when discussing the joint venture with the largest postal service in the world — it is estimated that 43% of the world’s mail goes through USPS and its chosen links.
“We found that we had each independently developed a strategy for an international proposition that was
remarkably similar. The chemistry was right for both businesses.
“There is most definitely an appetite for the service, which is business to business and business to consumer across the whole of the US. The one unique
aspect is that the USPS has got access to every single mail box in the US. Nobody else has that access. Already the market place is telling us that’s a big proposition.
"Whether you are a UK or a European customer you will be a Lynx customer so we will sell the proposition. We will pick the parcel up, line haul and clear it. USPS will deliver it and the customer will have access, either directly or through our web site, to produce track and trace to POD all the way through the system.
“We will have the ability to deliver to every consumer and business address in the US. There will also be value for money because it is not an express, next day delivery service. The market actually says that it doesn’t want a next day delivery but a reliable delivery at an economical rate.
“This will be an approximately three day delivery service across the whole of the US.
“There is something like a billion Euros spent on European to US parcel delivery (in the UK approximately 200m is spent on this route). We believe that a very large part of that sector is looking for this service. So there is a massive market there.
This move is indicative of the pace of
change affecting Lynx and the express parcels market where independent parcels carriers such as Lynx face competition from the European state postal services.
"We have developed our strategy knowing that the postal services are competing and eventually they will get their act together but there are still windows of opportunity to grow within that competitive environment and we are winning significant customers away from competition as they struggle to get their own organisations in shape and develop products.
“We have developed a capability to be able to flex and develop bespoke solutions for customers. New customers for bespoke solutions include greetings card company Birthdays.
“We are developing this not only on a UK basis but on a European and International basis. We are attacking Europe in a different way to the post services. We’ve been a partner with Euro Express. This is supported with individual partnership arrangements in every country with different products. So with Euro Express, it’s a road-based solution. If you require an express solution we have other partners in each country to provide a
faster air express capability. in Benelux we couldn’t find anybody suitable, so we put in our own operation.
“From being in Benelux and selling from our own operation, we won accounts from companies such as ICL, Siemens and IBM accounts that are global. We have tailored specific solutions for them and we will deliver from the Benelux collections at night and guaranteed deliver into their engineer’s vehicles by 7am the following morning across the whole of the UK.”
The next strand of Lynx’s developing strategy is to review everything it does in terms of customer care.
Lynx has recently spent a lot of time on customer research and found two key feedback points:
“First of all absolute consistency of service across every single post code in the UK. It’s important to pre-warn the customer if there is a problem. They will understand if there is a hold up due to traffic or break down etc. What they can’t forgive you for is not telling them and their customer who is receiving the parcel knowing before they did.
In general they are looking for services that help them to add value in their competitive
market place and most of our customers are in a competitive market place themselves. It is service which sets them apart from their competition and therefore they want us to help
with that which has driven us down this route of developing bespoke solutions.
Service is viewed as vital for a company such as Lynx which places itself in the premium end of the market. It is deemed more important than price.
“We are not a commodity player at all. There are competitors who are buying market share and are discounting their rates. But they are backed by corporations that have very deep pockets. Our view is that they must be buying market share because it is not a commercially viable rate. Their profits have plunged over the last two years.
“We will not fight in that market place. There is still plenty of room for carriers who are prepared to provide a premium service at a realistic price. We are winning customers that are both small and large from competitors who are trying to win their loyalty by reducing price but offering average service. If your carrier is your route into the niarket and you can save a few pence per parcel but the service is average you have to question whether that is the right thing to do.”
Lynx carries over the premium ethos into its business to consumer operations. Burtenshaw describes the example of Virgin
Mobile’s distribution channel which Lynx developed from a clean sheet of paper. Lynx started working with Virgin mime months before it launched and developed Virgin's home delivery requirements. “They came to us because we had a reputation to be able to develop new solutions. It’s a complex delivery requirement with contracts being signed on the door step. All of our drivers have been trained in that capability.”
Lynx is expecting to announce shortly a new major contract in the business to cotisunier sector where it will provide a service from warehousing fulfilment to final delivery.
Burtenshaw describes as "bunkum” the view that ecommerce, particularly that involving business to consumer, is hype arid that people wont buy from catalogues or the Internet.
"Closing your eves to that is foolhardy because Internet buying and the continuing development of catalogues — not the traditiomial catalogues but the new breed – will most definitely increase.
“The market is fraught with difficulty because home delivery is probably the most difficult delivery that you’ll ever make. This is not helped by the fact that most of the market
thinks it should be cheaper than business delivery when in fact it is more expensive if you are going to do it properly.
“The kind of market we are in, where we deliver high value goods to the home, particularly if you have to have a signature from the person who places rhe order, it becomes an expensive delivery because you have to make sure they are there.
There can be high instances of aborted deliveries because the recipient isn’t there. Home delivery is also difficult operationally — it doesn’t lend itself to operating on the same vehicle fleet that you are delivering into business places, according to Burthenshaw.
“What we have developed is a capability to operate in that market place at the premium end.”
Virgin M obile has a high awareness as far as customer care is concerned. The customer expects that deliver to be everything Virgin says it offers.
“So we are actually Virgin when we make that delivery. If a recipient isn’t there and a card is left for him to phone and he thinks he’s talking to Virgin, he’s talking to us so therefore we have to, on the phone, offer the level of service he would get if he was talking to the Virgin call centre. That puts additional pressure on us but it also helps us to rinse our standard.
“The dilemma is that the customer thinks he’s getting a delivery or is talking to Virgin but it is actually us. So we have to be at the top end of customer service.”
“I can understand wily competitors are reluctant to go into the market place because it is fraught. A consumer is highly critical of any delivery they get. If they are told it will be delivered at a certain time they expect it to be.
“Where competitors fail is when they throw it on their normal delivery fleet that goes to the high street and business parks.
"We have developed a separate home delivery capability that runs alongside our main fleet but has the flexibility to be able to go into the homes where necessary.
“There isn’t anything that we deliver that we don’t get a signature for. It will only be
delivered to where it is authorised to.
“We are also looking at how we will develop pick up amid drop ofF points. That’s a feature that we will launch progressively as we deem appropriate but I think that the market is some way from accepting that yet. But it will do.”
On the subject of signatures, Lymix is currently rolling out realtime POD digital capture of signatures. “Every single signature will be digitally captured and you will, as a customer, be able to pull off your signature from the Internet, (or the EDI linked cornl)uter system for larger customers).
Lynx is also currently evaluating what it will be introducing into vehicles in the next 12 months in terms of track and trace across all services. The company already utilises this technology for certain services, such as secure distribution.
"The other aspect that we have mastered is the ability to contact the recipient if they are riot in, and we expect them to be — in order to agree an acceptable alternative delivery. Most of our home delivery agents tend to have mobile phones so that they can talk to the customer. So in the last mile von have a relationship between the courier and the customer agreeing exactly when they are going to be in. This will eventually work on a panEuropean basis.
Back on the subject of Europe, Burtenshaw pointed out: “You cannot consider yourself to be a UK-based business. It's a global market place and you have to have a European dimension. Many of our customers now are based in Europe amid are looking for European distribution based out of Europe. Hence we opened up in the Benelux amid the opportunities are tremendous as a result of that.
“USPS has specifically gone out to find local people who can provide the right partnership arrangement. They’ve waited to see other people make the mistakes amid have done it properly. I’m highly optimistic that we have the right formula here. It fits in exactly with the way we have been developing our European Strategy.