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Last mile – full powered by digital transformation

Posted by Bojan Šneberger on Dec 3, 2017 11:00:00 AM
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How postal operators can uniquely profit from digitalisation on the Last Mile.

Since the transmission of the first message via the Internet in 1969, postal operators should have been anticipating its consequences. Today, digitalisation has permeated almost all areas of life and has made certain aspects of mail redundant. Why send a letter if a quick email is more efficient? Facing the current steady decline of physical mail, postal operators attempt to increase efficiency across their supply chains.

Make your enemies your best friends.

Considering the supply chain in its entirety, it becomes obvious that the Last Mile is where things become inefficient and thus cost-intensive. Your letter’s journey from sorting centre to doorstep is influenced by unpredictable variables: current traffic, your postman’s physical fitness, your dog’s current mental state. And things get even more complex if you aren’t expecting a love letter but your new TV.

Increasing efficiency on the Last Mile has taken the centre stage all across the logistics sector, but postal operators have unique opportunities for innovation and change – all whilst transforming the cause of all their problems to a solution.

Digital Mail, Hybrid mail – Taking the Last Mile out of the equation.

Both Hybrid and Digital Mail services propose solving any issues surrounding the last step of delivery by eliminating the problem: there is no in-efficiency if there is no physical Last Mile. Swiss Post and PostNord Danmark, both leading in the postal sector, have adopted this approach.

Swiss Post provides a service called “E-Post”, that allows users to choose between receiving mail either physically or digitally. If they choose the latter, Swiss Post scans their physical mail and sends it to their electronical account, where customers can read, respond to and archive their mail. All personal information is encrypted every step of the way and payment orders are transferred via a secure connection. Mail sent from this account to a physical one is printed and traditionally delivered. This service is particularly interesting for senders of bulk mail.

PostNord Danmark’s service “e-boks” is used by roughly 70% of Denmark’s inhabitants, the other 30% are either too old or too young to use the service. It is the predominate mean of official communication, not only between government and individual but also between employee and employer. It enables Danes to receive both their pay slip and medication prescription via the “e-boks” app, on their phone, no matter where they are.

What these services have in common is that their success is largely based on an established trust in postal operators as institutions that reliably deal with confidential information. This trust is a market advantage that sets postal operators apart from all purely commercial competition.

Parcel lockers on the rise – it’s just like your doorstep, only in front of your gym.

Renowned retailers and carriers, for instance DHL and Amazon, are investing in so-called “parcel lockers” to reduce parcel delivery costs on the Last Mile – and to increase customer satisfaction.

Parcel lockers provide customers with the opportunity to pick up their delivery 24/7 at a location of their choice, thus not forcing them to be present at their doorstep for the parcel’s arrival. Simultaneously, the delivery logistics are reduced to a minimum – one vehicle can deliver a large number of parcels in a minimum of time.

However, this service relies on extended “Track & Trace” to allow customers to better control and redirect their delivery. Nowadays, one of customers’ highest priorities is this immediate control and experts say, that users are prepared to pay significantly more for the same product if they can trace where their parcel is.

Postal operators need to respond to these demands and invest accordingly into their digital transformation, especially because their largest customers – e.g. Amazon – are also their biggest competitors.

And it’s saving the planet.

Unsurprisingly, the lack of efficiency on the Last Mile also leads to an increase of carbon emission per kilometre travelled. So by optimising processes and incorporating digital services, postal operators don’t only save money and increase customer satisfaction. They also fight climate change. And who, really, can say no to that?

So, frank and clear: if postal operators and national mail services want to stay relevant on the market, digital innovation is key. If they want to reduce Last Mile costs, they will need to employ creative and smart software developers, and not invest in ultra-fast vehicles. That’s where we come in – we can take you were you want to be.

Check out how we can help you transform parcel and postal digitally.  

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Topics: intralogistics, parcel and postal, digital transformation

PARCEL and postal

Digitalization of parcel and postal sector brings new business opportunities. To discover how we can help you address them check the Parcel and Postal section.  Gumbi web_PRESS_READ MORE.png

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