BLOG

WHAT IS THE CURRENT STATE OF THE POSTAL BUSINESS?

August 2018 | By Ronen

Economic, demographic and technological trends are driving rapid change in the postal industry. It’s the same trends that we see in almost every other industry – digitalization, consumer demand for a more responsible business (including social awareness and green & circular economy), and technical, data-driven innovation.

Gone is the time of paper-based manual processes, letterboxes, and national post offices with an operational perspective; the industry now calls for customer-focused services, real-time tracking, and personalized mobility.

Fewer letters and more parcels in postal networks is putting pressure on the industry, challenging current business models. Growth and profitability must come from new revenue streams, such as investment in logistics, banking, and delivery services. Amazon, eBay and Alibaba are trendsetters for the industry and those companies, whose success is indisputable, have the customer in focus constantly. New customers’ expectations, together with global connectivity, is impacting the entire logistical chain.

The Internet has changed the game. Disconnected, decentralized, company-owned dedicated IT systems, local transportation, and local cultures are replaced by a connected, cloud-based, globally transported and process-based global postal network, geared up to meet the future.

Digital platforms are being built and the concept of data science, or big data, gives more and more insights to where the challenges are. Technology is utilized to transform the back end for the postal business, which is also challenged by new consumer behaviors. e-Commerce is booming, boosting the parcel business, with packages becoming smaller, lighter, and traveling shorter distances. But the postal industry needs to digitize further, enabling real-time analysis and the development of further applications, which can serve customers in a more personalized way.

The industry has always been challenged by movement of goods from a transportation hub to the final destination -the capillary flow in the logistical chain. We see robots and drones delivering to remote places, parcel motels are being introduced, and geotags identifying a real-world location based on mobile devices are a reality, but when can we see them put into action?

How willing is the postal industry to adopt and change? Well, with challenged business models and global trends putting pressure on the players, more and more digitization and global connectivity, we can already now see some collaborations, which is a sign of changing times. For example, we worked with Katz Corporation, the second-largest package delivery company in Israel, who utilized our BoxSizeID technology and realized a 2.5% increase in annual income.

BoxSizeID connects to the package delivery company’s ERP system and streams real-time logistics data such as barcode scanning, package images, and locations, while also allowing for image capture and geolocation tagging.

The package delivery market is expected to grow 4% annually over the next four years, as consumers continue to demand delivery of time-sensitive goods. As such, parcel providers will need to continue to invest in technology to ensure they are operating efficiently and operating expenses are kept as minimal as possible.

To learn more about BoxSizeID, please click here.