International Postal Update — April 2014

 ROYAL MAIL AND UK RETAILERS SHIFT TOWARD E-COMMERCE

Royal Mail and retailers look to capitalize on e-commerce growth. Royal Mail recently launched a television advertising campaign targeting parcel business customers — its first in five years. The postal operator’s half-year results showed parcels contribute 51 percent of Royal Mail Group’s total revenue. Royal Mail expects that online sales will increase from 9.6 percent of total U.K. retail sales in 2012 to 12.3 percent in 2017.

London’s transportation agency is working with retailers to install “click and collect” automated parcel facilities at metro stations. After a six-month trial with Asda Grocery, the agency will allow retailers Tesco and Waitrose to install parcel lockers at six stations each and parcel locker company InPost to install facilities at three stations.

BRAZILIAN AND ITALIAN POSTAL OPERATORS JOINTLY LAUNCH MOBILE PHONE SERVICE IN BRAZIL

Brazil Post and the mobile division of Italy Post, Poste Mobile, recently agreed to establish a mobile virtual network operator (MVNO) in the Brazilian market. The operator will purchase network access from existing providers and sell mobile services to customers at post offices across the country. The two companies expect to select a network partner in April 2014.

The wireless service will be modeled after Italy Post’s domestic MVNO, Poste Mobile. Brazil Post plans to sell SIM cards, phone credits, and handsets in postal offices by the end of 2015. The postal operators hope the joint business will have eight million customers within five years. Poste Mobile, launched in 2007, has over three million customers.

NORWAY POST SEEKS POSTAL REFORMS AS IT DIGITIZES ITS MAIL STREAM

Norway Post seeks changes to universal service standards as its digital services grow. This spring, lawmakers in Norway expect to debate proposals addressing losses from declining mail volume, including ending Saturday delivery and mandated service levels. Other proposals include dropping the two-tier mail class system in favor of a single-class system and increasing the customs threshold from NOK 1,000 (US$165) to NOK 5,000 (US$826) to facilitate e-commerce.

Norway Post recently won a contract to run Norway’s public digital mailbox platform for all government correspondence on its existing Digipost system. By law, government agencies are now required to communicate with individual residents and businesses digitally, and all private individuals must own a digital mailbox. Ahead of Digipost’s launch in 2011, Norway Post CEO Dag Mejdell acknowledged the electronic diversion of mail and said, “Norway Post wants to take part in these developments.” Digipost currently serves approximately 300,000 customers and delivered over three million digital mail pieces in 2013.

CANADA POST UNVEILS PACKAGE-FRIENDLY MAILBOX DESIGN

Canada Post unveils a new community mailbox design as it prepares to phase out door-to-door delivery. To accommodate rising parcel volumes, the new design features larger individual compartments that can accept small packets, as well as larger parcel compartments. Canada Post plans to launch community mailboxes in 11 communities across Canada in the fall of 2014, affecting approximately 100,000 addresses.

This initial rollout is the first stage of Canada Post’s five-year initiative to end door-to-door delivery. Canada Post plans to eventually convert the one-third of Canadian households still receiving home delivery, roughly 5 million addresses, to the new community mailbox system.

POS INDONESIA AND SINGPOST INVEST IN PARCEL LOCKERS

As Singapore Post (SingPost) expands its parcel locker program, Pos Indonesia follows suit. Indonesia’s postal operator recently contracted with Gunnebo Indonesia to supply self-service parcel lockers for a trial program. If the locker program succeeds in trial, Pos Indonesia plans to expand the network across the country. Gunnebo Indonesia is an authorized distributor for Australian locker manufacturer TZ Ltd, which has supplied lockers to SingPost since last year. SingPost appears on course to reach 100 parcel lockers by the end of this year. Its parcel locker program is part of a S$100 million (US$78.6 million) initiative to improve infrastructure and productivity.

Despite declining mail volumes, SingPost’s revenue increased 30.2 percent to S$222.6 million (US$175 million) in Q3 FY 2013 relative to the same period last year, largely due to acquisitions and growth in e-commerce. Non-mail business increased 10 percent from the previous fiscal year and now accounts for 45.7 percent of total revenue.