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E-commerce provides both opportunities and challenges for postal services

Postal agencies discuss the changing role of delivery services along with the new opportunities and challenges e-commerce brings during the Universal Postal Union (UPU) World CEO Forum in Paris earlier this month.

According to a UPU statement, participants debated whether “e-retailers and e-marketers should be treated as friends or foes”, and some of the CEOs also shared their models for collaborating and competing with private companies in an effort to capture a share of a global e-commerce logistics industry on path for US$781bn by 2024.

Scope creep threatens delivery services
Of particular concern are the future plans of e-commerce and traditional retail giants like Amazon, eBay and Walmart, who seem to want to dominate all aspects of their own shipping networks and possibly those of smaller retailers as well. That scope creep into logistics would most certainly be a threat to shipping carriers and postal services.

Yet Correo Argentino CEO Jorge A. Irigoin stated that, “There is a threat, but, at the same time, an opportunity for us to be more competitive, have a better cost position and deliver higher quality,” he said.

Some partnerships currently exist
While some remain threatened, other postal services like India Post whose infrastructure provides reach into semi-urban and rural areas, where e-commerce demand is high, makes them very attractive partners to e-tailers.

Amazon in particular, which identified India as a key growth market, has actively sought to develop deeper relationships with the Indian postal service. “It makes no business sense for them (Amazon) to develop these networks now,” said Boyapati Venkat Sudhakar, Chair of Indian Postal Services Board.

Such an nfrastructure advantage, especially in emerging nations, meant postal services better position to work with e-tailers to tailor services to their needs.

Cross border concerns
CEOs attending the meeting said that the Posts’ expansion delivery networks gave them an important vantage point in the logistics industry, but some added that “facilitating cross-border exchanges in the postal community remains a challenge”.

“Some Posts still partner with private companies for international delivery and others lack direct connections with each other”, said the UPU.

While it may be easy for countries such as France and Germany to exchange parcels quickly, La Poste de Djibouti CEO Bahnan Ali Maidal said the same quality network doesn’t exist for postal services in developing nations.

As these postal services transition from the traditional letter-post business to ecommerce solution providers, they face new operational challenges and increasingly become aware that initial partners can also become rivals.

Tags: global e-commerce, Logistics

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