Closer cooperation with major private delivery companies can create new commercial opportunities but also bring threats such as ‘cherry-picking’, several top postal executives believe.
For their part, private parcel and express operators see plenty of potential for win-win partnership with postal operators, according to a major regional player. Indeed, many postal operators around the world already have bilateral commercial agreements with private carriers.
This somewhat mixed message at the Parcel + Post Expo conference in Amsterdam last week came after the Universal Postal Union confirmed plans to open up the world’s postal system to private carriers under a reform strategy to be discussed over the coming months.
Faris Fallouh, Aramex’s global operations director, told the conference’s Global Leaders session that postal operators have “vast coverage” and “a reliable network”. The question will be how the UPU can bring public and private operators together, he commented. “There is a lot to be done in this space. We would encourage the UPU to create a channel for this.”
Presenting Aramex’s strategy for the fast-growing Middle East e-commerce market, Fallouh said this regional market could quadruple in size to US$19.8 billion by 2020 (compared to 2015) but still remained relatively small compared to other parts of the world. Challenges included low internet penetration in many countries, a high proportion of Cash On Delivery payments and poor addressing.
As part of its e-commerce investments, Aramex has launched a WhatsApp chatbot to ask recipients for delivery preferences, including their address, created a crowdsourced fleet in 10 countries for additional peak delivery capacity and added more service centres.
Later this year, the company will launch an outsourced PUDO network under the name Aramex Spot, working with retail partners, and then next year start installing collection lockers in Saudi Arabia and Kuwait and add more in Dubai, Fallouh said.
Faleh Al Naemi, chairman of Qatar Post, told the conference how, as part of improving its products and services, the postal operator had linked up with Aramex, FedEx, UPS and other carriers to create a new International Global Priority Service through an ‘open’ network. It had also teamed up with Turkish Post to launch a ‘Turkish souq e-mall’ and was building a new 20,000 sqm sorting centre due to open in early 2021.
In Nigeria, national postal service Nipost is serving the biggest e-commerce market in Africa with new products and services, including final-mile deliveries of international goods for DHL, CEO Adebisi Adegbuyi, told the event.
In contrast, Oleksandr Pertsovskyi, COO of Ukraine Post, cautioned about the potential risks of closer cooperation with private operators as well as the opportunities.
“It’s a challenge for the postal player,” he said. “As a postal player we have a huge advantage. If we give them access, then they will cherry-pick (deliveries).” But he remained positive, highlighting potential cooperation in some commercial areas, such as for expedited products.
Ukraine Post itself is transforming services to improve its financial results and trying to develop e-commerce in Europe’s second-largest country by supporting consumers and retailers, Pertsovskyi explained.
For example, a new ‘mobile post office’ service by van has enabled the company to replace outdated and under-used post offices with direct deliveries of letters, food supplies and goods in rural areas.
After overcoming initial protests about post office closures, this service will be expanded from pilot areas to other regions. “We probably under-communicated. People thought that if the post office closes, the service stops,” Pertsovskyi admitted.
