Correspondence about Sky Postals South American operation
TO: JOHN LLOYD
FROM: CHRIS WEBER
REF: SKY POSTAL
DATE: 14 February 2003
Here is some heads up information for you.
SkyPostal was formed last year in MIA. Our minority shareholder is Lan Chile.
Shortly before 911 Pat Walsh, who is operations director of Skynet London, and myself met with Alan, yourself and Mark Solnick from the USPS regarding their Priority Mail product. Skynet was interested in securing the UK license to sell this product into the USA using Virgin as our carrier. Eventually USPS awarded the contract to Lynx.
Last September Sky Postal was awarded the exclusive license to market all USPS products in Latin America to the USA. Presently we are only selling the Priority Mail product. In retrospect the USPS should have been speaking with W.H. Smith rather than Skynet here.
In 2002 the sales of Priority Mail in the USA were $7.5 billion.
Presently 1300 Western Union outlets and 200 VASP ticket offices in Latin America sell this product for Sky Postal. Our goal is 3000 outlets by September, which could include other airline ticket offices as well as a chain of petrol stations in Argentina.
This is a point of sale product. Consider that 13% of the US population is Hispanic. Their relatives in the region have requirements to send documents, photos, allowable food products etc north. The post, which in many countries is poorly funded, is not reliable and totally lacks time sensitivity although inexpensive.
As an infrequent or social user the express companies charge $35.00 and provide 3-4 day service. Now the customer can go into a local ‘shop’ and purchase a 5-6 day service for $10.00 in a USPS provided pouch.
The outlet has an IT link to produce USPS bar coded labels. Overnight the item will arrive in the Skynet gateway office and be shipped to Sky Postal in MIA where it is inserted into the USPS Priority Mail stream with full track and trace ability on www.usps.com.
Because of the problems of poor postal quality in the region most local business, including utilities, telephone companies, banks etc use local messenger groups to deliver their bills and statements. These correo privados provide a hand delivery service to just about every address in Latin America.
In October Citibank appointed Sky Postal to deliver 2 million bank and credit card statements a month into the region. Why Sky Postal? Because of our advanced bespoke I T systems. The bank and credit card statement is bar coded when it is printed. Scans take place at the sort point in MIA, then upon entry into the destination country, again by carrier route and at point of delivery. Additionally we are now delivering 150,000 inactive new, renewal and replacement credit cards each month for two banks. The final delivery scan is used by the bank to either; activate the card or call the user to determine he received it. The statistics have proven on average 8% of all items do not go into the main cities.
In Europe we have no intention of creating any infrastructure. The only retail business we will take is if a client in the USA requests it. Presently we are allowing two UK consolidators to ship into the system. Because of the ‘black hole’ created by the local postal authorities a weekly publication might get to Columbia in 5 days as ISAL and next week the transit time is 25 days. Using Sky Postal the publisher or bank etc here can spray on a bar code and be able to track the item. We guarantee 5 days from receipt in MIA until delivery with full item T&T provided they barcode each item.
Besides consolidators needing a better service European Postal Authorities also are frustrated by the poor quality of delivery of their ISAL & IPA mail into Central and South America.
Belgian Post International averages 400 kgs a day into the region. They are going to begin testing with us later this month. Presently this franked mail is on CN documentation to the 20 + postal administrations in the region. What Sky Postal offers them is a cost effective time definite delivery.
Royal Mail International will begin testing their Signature Service products with Sky Postal on 19 March. These items are bar coded. If Sky Postal proves to RMI the system works then we will be in a position to handle their ISAL and IPA traffic to the region. Presently that is 90,000 kilos pcm. The largest destinations, BUE, RIO,MEX presently fly direct and delivery times can take 5-25 days following posting.
Sky Postal only takes ownership of this mail when it arrives in MIA. We are not in a position to dictate which carrier they should use however we have made it clear to the consolidators and the two postal groups airfreight via VS into MIA directly or via MCO works well for us.
Can we speak on this issue early next week?
