Monday May 27, 2024

Postal execs highlight the power of partnerships to drive innovation

Posten Norge drone
Posten Norge drone

Strong partnerships and ongoing collaboration are the key success factors for posts and carriers seeking to drive innovation amid a challenging and fast-changing environment which is seeing digitalisation transform businesses and consumer demands, according to executives speaking at last week’s Leaders in Logistics Summit 2023 in London.

This key message was revealed during the Innovation session, which saw executives from Escher Group, Posten Norge, Doddle and Swiss Post discuss the drivers of innovation, how innovation is being achieved at posts, and the importance of the right partnerships.

“There are a lot of things that posts and carriers are brilliant at, and no other firm can really compete, but around the edges there are a lot of little innovation areas that partners are desperate to help with to accelerate innovation,” said Mike Richmond, Chief Commercial Officer at Doddle.

“For these areas we believe the best approach is to outsource innovation, but to do so using a collaborative approach,” he continued. “This enables the posts and carriers to focus on what they do well and at the same time to get access to specialised expertise.”

The innovation discussion followed a keynote presentation by Accenture’s Andre Pharand who stressed that postal operators need to innovate and transform if they are to retain and grow their market share of the parcels sector, which is slowing moving toward smaller, asset-light delivery firms.

Innovation through digitalisation  

During the innovation session, Escher Group’s CEO Brody Buhler spoke about how digitalisation is changing the way posts and carriers do business today. New tech such as ChatGPT is revolutionising things like customer services, he noted.

Buhler also revealed how he believes that delivery speed will become a priority for consumers again, although for now, price is the focus. “Digitalisation can help with both of these, and it needs to be embraced at a greater rate in postal organisations,” he added.

Buhler also gave some insight into Escher’s latest Future of Posts report, which is due to be released in a few weeks, he confirmed. “Last year, companies were focused on capacity when it came to investment, but today things look very different,” he said. “Things have shifted from adding capacity to using existing capacity in different ways. The importance of insight into the network, using digitalisation, to drive efficiency is critical.”

In a similar vein to Accenture’s Pharand, Buhler stressed the importance of innovation, digitalisation and transformation when it comes to posts pulling back market share from new, more flexible entrants. He also advised posts and carriers to keep a close eye on developments in the same-day delivery space.

“Both Walmart and Amazon are making huge investments in this area, ensuring inventory is closer to the consumer for faster and more efficient delivery,” he explained. “Walmart is one of few firms that has cracked the code on profitable same-day delivery, and I fully expect other companies will follow suit.”

Buhler stressed that posts need to take note of this to ensure they don’t get left behind. He advised that they look at getting more out of their existing asset base. “Posts’ delivery offices, for example, are only used for a few hours a day,” he explained. “Posts need to look at what they can do with that space and add new capabilities, such as local fulfilment to compete with the likes of Amazon in the fast delivery space.”

Routine innovation

Richmond, who highlighted how Doddle has gradually transformed over the years through “routine innovation,” noted how small, accumulative innovations can help posts and carriers transform. “Doddle has experienced constant evolution and change,” he said. “It is this routine innovation which has made it successful, rather than investments into big transformative innovation.”

Richmond highlighted Doddle’s work on a self-service drop off solution, which was trialled with several retailers in the UK and went through a number of evolutions. The company has now finetuned the solution and it is being used by “a major retailer in the US” and processed more than five million returns last year.

“We have now developed the perfect solution for parcel drop and returns, yet when I go and pitch this solution to posts, they usually say they would rather build it themselves,” he explained. “Of course, they can do this, but by working with partners they could roll out something like this much quicker.”

Richmond noted that alongside collaboration posts and carriers should also focus on leadership, mindset and removing barriers to achieve innovation success. “Innovation is a process, not an outcome,” he said. “It is not a silver bullet, but rather an ongoing task and posts and carriers need the right partners to work together to build, change and develop new solutions.”

Postal examples

During the Innovation session, two posts also shared their experiences with innovation. Thierry Golliard, Director of Open Innovation and Venturing at Swiss Post revealed how the postal organisation, as his job title suggests, takes an “open innovation” approach, which works toward delivering profitable growth.

“My team creates growth for Swiss Post by connecting internal experts with external innovators,” he said. Golliard revealed how the team has explored everything from exoskeletons, sorting robotics and autonomous delivery solutions, such as its work with Starship robots for last mile delivery.

The key to success for all of these, according to Golliard, is partnerships. “External partnerships with universities, start-ups and other organisations, enables us to be quick when it comes to innovation,” he explained. “They help you stay relevant.”

He also highlighted how Swiss Post set up a corporate investment arm around six years ago to foster this partnership approach. To date, the arm has invested in 16 start-ups, investing around CHF 1-2 million. “Corporate investing is challenging, but if you get the full support of the company then you can generate value, learnings and growth areas.”

Sven Richard Magerøy Tønnessen, Head of Emerging Technologies at Posten Norge, who also spoke during the Innovation session, revealed how his company’s investment arm has helped accelerate innovation, most notably in drone solutions.

Posten Norge has recently tested drones for the delivery of water samples to a laboratory for analysis. “We worked alongside Aviant, Swiss Post’s express delivery service, and one of their customers,” he explained. “The parcel travelled 60km via drone to the laboratory. It helped reduce transportation emissions by 99%.”

The emerging technology department at Posten Norge used the findings from this trial to meet with different departments within the organisation to map out where drone operations are feasible and what is needed to implement this. “After the project ended our investment arm made an investment into Aviant as we could see the potential the drones had within the business,” said Tønnessen.

The project also inspired the use of AI-enabled indoor drones for inventory management within Posten Norge’s 3PL automated warehouses, Tønnessen concluded.

SourceLeaders in Logistics Summit 2023, CEP-Research, Escher Group, Doddle, Posten Norge, Swiss Post

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