POSTAL OPERATORS WORLDWIDE SEEK COMPETITIVE EDGE FROM TECHNOLOGY INVESTMENTS
USPS UPGRADING PACKAGE DELIVERY NETWORK
The U.S. Postal Service is investing heavily in major technology initiatives with a focus on improving delivery of its competitive package products. Over the past two years, it has replaced older Intelligent Mail Devices with more than 260,000 new handheld Mobile Delivery Devices (MDDs). The MDDs are single-device scanners with GPS capabilities that allow letter carriers to track package delivery in real time. Clerks scan packages when received, and letter carriers do the same when they are delivered to notify customers within minutes.
Phase 1 of the rollout put more than 75,000 MDDs in the hands of letter carriers and cost $149 million between September and December 2014. Phase 2 distributed another 188,000 MDDs at a cost of $349 million through September 2015. A July 2015 audit report by the Postal Service’s Inspector General cited “common functionality issues” in need of improvement.
The Postal Service is also moving forward with its plan for Next Generation Delivery Vehicles. The $6.3 billion program will overhaul the agency’s existing 200,000-truck fleet with upgraded vehicles that incorporate new technology-enabled functionality and provide more storage space for packages. The agency’s Request for Proposals closed February 5.
USPS plans to utilize the new trucks to deliver both letters and packages. Private-express carriers, by contrast, typically use different, dedicated vehicles for packages. It is unclear how the Postal Service will attribute the costs it incurs jointly delivering letters and packages, given that federal law bars USPS from using revenue from monopoly products like letters to subsidize the delivery of competitive products, like packages.
The Postal Service has also launched a pilot “informed delivery” program, which sends customers emails with images and details about their letter and package mail before it’s delivered that day, free of charge. Customers can then let the Postal Service know if they’d like the mail delivered to them.
The U.S. Postal Service lost $5.1 billion in 2015 — its ninth consecutive year of losses. USPS management has not specified how it plans to pay for these technology upgrades.
POSTAL TECHNOLOGY INVESTMENTS TAKE DIFFERENT STRATEGIES
The United Kingdom’s Royal Mail has set up a £130 million technology investment program that is set to roll out over the next five years. In 2015, the British national post partnered with Zebra Technologies to replace 76,000 hand-held scanners with new Postal Digital Assistant devices.
Additionally, Royal Mail has partnered with Tibco, a software firm, to introduce several new digital platforms including an event-management system equipped to track and trace parcels as well as systems that store, monitor, and manage parcel delivery data.
Royal Mail has also made tech upgrades to improve internal operations. It recently introduced a new telemetry program, which uses real-time satellite data to track and analyze postal vehicles and deliver efficiency recommendations to drivers through an in-cab communications system.
DPD, a U.K.-based express parcel carrier and one of Royal Mail’s biggest competitors, has also invested heavily in tech initiatives as part of an effort to capitalize on the growing European delivery market. DPD has already spent more than £100 million building one of Europe’s largest automated parcel facilities and is currently looking for a location to build a new site that is projected to cost even more.
Australia Post recently announced a partnership with Data61, a leading digital research and analytics group. Through this partnership, Australia Post plans to improve cyber-security and convenience for customers using online services. The post also hopes to make government services more accessible for citizens who are geographically isolated or socially disadvantaged. Data61 will also assist Australia Post with logistics know-how in order to improve supply-chain management and package delivery.
Separately, Australia Post plans to launch a drone parcel delivery trial later this year and is considering making 3-D printers available at post offices.
These initiatives are all part of the $20 million innovation capital fund that Australia Post announced late last year. The post expects the fund to grow to $100 million over the next several years.
Chinese e-commerce group Alibaba recently invested $249 million in SingPost, Singapore’s national postal service, in which it already holds a 10 percent ownership stake. The post hopes that the partnership will help strengthen its e-commerce and technology efforts.
Alibaba’s other investments include Chinese shipping company YTO. Its resources have gone toward improving YTO’s data systems and information technology. According to the shipping company, Alibaba’s support allowed it to increase its delivery volume from 2.1 billion parcels in 2014 to 3.3 billion in 2015.
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