May 16th 2016

 

Jack had been with  Slavonia Post for almost 30 years now and he was recognised as one of the most able managers in the company.  After years of declining letter revenues and major competition from private carriers in the lucrative parcel business, the organisation was not in good shape either financially or in terms of its customer offering.

Nobody had been very much surprised when, some 12 months ago he had been nominated as CEO by the Minister of Infrastructure, "If Jack can't help us, who will?" the minister was apparently quoted as saying. Since his nomination, Jack had worked tirelessly to convince his supervisory board and unions (as well as his own management team) that it was e-commerce that could save the day for Slavonia Post. Despite push back from the unions, who didn't want new work practices or PDA's (handheld terminals) which they claimed were like a "spy in the post-bag", or concerns from the Minister that the already significant financial loss would be aggravated by the investment this entailed, Jack persevered. He had even found a way to circumvent the financial restrictions on salary and hire Krys, a top CEP Manager, to head the parcel division.

Despite the barrage of criticism he had been deflecting for several weeks now, the big day had arrived. Mississipi.com had just transferred over 70% of their business back to the postal operator. Their Regional VP had said during the negotiations that with the new customer experience Slavonia Post were offering, supported by interactive delivery, "to door", "to access point" (open 24/7 in many places and never further than 10 minutes from the consignee) and "hassle free" returns, they were clearly the best supplier in the market.

Winning just this one account, will increase parcel volumes by 30% and make the Post a leader in the segment, once again, not mentioning additional sales to the customers who come to the post to pick up their parcels.  Suddenly Jack's critics were singing a new tune... 

So how far from reality is this story? Actually, not so far at all. The largest e-commerce players  are almost always the most important parcel shippers in markets where they have a local site. Also, the National Posts almost always have the largest and most "local" infrastructure of access points due to their legacy network and universal service obligation. So why is it so difficult for many of them to make e-commerce business "theirs".

As any experienced postal manager will correctly point out, "things are not so simple", there is the issue of convincing the various, highly influential stakeholders (politicians and unions to name but two), the costs of adapting to the needs of e-commerce, not to mention the challenge of getting specialists on board who know this space.  But the benefits are clear and when you look at what some large Postal Operators La Poste or Deutsche Post are doing or other smaller, but agile Posts like Posten (NOR), Posti (FIN) or Eesti Post (EST) it is clear that success in e-commerce is not only a pipe dream.

 

Any comments?