Ebook: Postal Services in the Digital Age

In the past few decades, the postal sector has undergone some radical changes, which have primarily been driven by operational and technological transformations. The onset of Information and Communication Technology (ICT) has not only added competition to the market, but has also provided public and private organizations with ample opportunities to broaden and improve their services and product range. Postal operators have responded positively to this change and have adopted postal digital solutions to improve the quality of existing services and introduce new value-added services. Therefore, having realized the potential and need for electronic services, postal operators are diversifying into different services in a digital sector, offering a wide range of products and solutions to match the competition and meet the needs of customers. However, the postal sector has not yet realized the full potential of digitalization.

This book deals with the challenges the digital age poses to the postal sector and the vast opportunities it provides to postal operators to develop new business solutions and services tailored to the needs of their customers. The book aims to analyze these opportunities and identify ways in which postal operators can benefit from the digital age and new market requirements. The chapters in this book have been contributed by experts and professionals in the postal sector. The book is structured into three broad sections: various digital dimensions; e-commerce challenges; and opportunities that postal operators run across when partnering with governments. The final chapter reflects on the developments described in the book and on the views and ideas presented by the authors.

The first section, on digital dimensions, is comprised of chapters that highlight market developments and digital developments and analyze the role postal operators can play in this area. These chapters discuss letter demand and its substitution, the emergence of the digital postal network, the concept of business models for post in the digital age, case studies, and best practices for being successful in the digital age. The chapters emphasize the need for digitalization of postal services as an opportunity to enhance the profitability in and value of the postal business and to diversify into new business areas, thereby responding to new market and customer needs.

E-commerce offers great opportunities to the postal world. The second section deals with the “e-commerce challenge” and focuses on the opportunities offered by e-commerce, as well as the obstacles and barriers that postal operators must overcome in order to be major players in this business field. This section provides insights into the role that postal operators play in supporting the growth of international e-commerce, proposing and discussing some key value propositions of postal operators. One of the key themes in this section is the shift in the paradigm of the logistic service providers in relation to the booming e-commerce industry.

Postal operators are starting to realize that close cooperation with governments, particularly in the field of digital services, could benefit postal operators and governments alike. Postal operators with expertise in various e-services, gained through adoption of digital infrastructures, are emerging as strong contenders in alliances where governments seek partners in the implementation of various digital public services. Postal operators are appearing as strategic alliance partners to governments, offering public services through their efficient and secure digital interface. The section on “partnering with governments” discusses the role of posts in the adoption and implementation of various e-government services.

The digital age has confronted the postal industry with huge challenges and ever-greater losses in their core business of letter mail. At the same time, the digital age has opened up completely new business potentials and postal services have only just started to grasp the opportunities that the digital age has opened up for them. These changes are far-reaching and disruptive, but also filled with opportunities. The last section of this book reflects on these developments, challenges, and opportunities and analyzes the ideas and views that the chapters' authors have presented. It tries to identify the unique selling propositions (USPs) that would enable posts to differentiate themselves from other service providers and offer unique and valuable services and business solutions that are tailored to the needs of today's customers. If posts succeed in creating business models that are based upon their USPs and tailored to market requirements and demands, the opportunities are considerable. The digital age, which was initially viewed by many as a threat and challenge, will finally reveal itself as the biggest opportunity the postal sector has ever seen.

We would like to take the opportunity to thank all the authors who agreed to contribute to this book and share their experience and views. We would also like to thank our publishers for their support and assistance.

Matthias Finger, Bernhard Bukovc, Muqbil Burhan

In the so-called “digital age,” postal services are yet again being challenged. While they had already faced a significant challenge during the “age of liberalization,” the present challenge appears to be more serious, particularly in terms of its effect on the letter segment of the postal services. The aim of this introductory chapter is to place the challenge of the digital age within a broader historical, commercial, and political context of postal operators. Indeed, while postal operators have been quite successful at mastering the challenge of liberalization, the question now is whether they will also be able to master the challenge of the digital age, which I believe is a more fundamental challenge. I will try to address this question by way of a more historical approach. The history of postal operators and the postal sector more generally can be broadly structured into three phases: the phase of “quiet life” before liberalization (that is, before the 1980s), the phase of liberalization (roughly between 1990 and 2005), and the digital age (starting around 2005). These three phases also constitute the structure of this chapter, although the chapter's main focus is on the recent challenge of the digital age. I will conclude with some considerations about the future of the postal sector in general and, in particular, the future of historical postal operators beyond the digital age.

While this article considers letter demand in general, it concentrates on the substitution effect, and its characteristics and prerequisites for realization. The purpose of the paper is to determine the differences in substitution carried out in different letter-sender and -receiver groups or between different countries, and what the reasons for this are.

Traditional national postal operators are trusted in many countries, having enjoyed stable growth, low costs and societal acceptance for the past 100 years. However, the recent decade has created a threat to their traditional letter delivery services due to advancements in information and communication technology. In response, postal operators have slowly begun to diversify into digital services. This article uses the concept of business models, which have been a recent area of interest in management literature, to provide an innovative perspective on the postal operators' businesses in traditional letter delivery and digital services. The business model concept has four components (partnerships, value proposition, finance and network), and is used in this article to map the traditional letter delivery services business and the ongoing digital services business of postal operators. The key findings are that the business model is standardized for the traditional letter business, such as common products and common revenue generations, and has been consistently used by many postal operators for the last 100 years. However, the business model for the digital services business is not standardized, as this business entails different partnerships and different revenue streams, and has not been consistently used by postal operators since the last decade. The implication is that the business model provides a clear understanding of the current progress of postal operators in the digital-services business area. This understanding will help to create a standardized business model that postal operators can use to diversify into digital services.

The article outlines case studiesbest practices on how to survive in the digital age. It shows how best-run businesses have learned from the past and other industries, and how they used technology to change their operations. Lessons learned from transformation projects are shared.

The postal network has been at the heart of communications and commerce for centuries, across vast countries and around the globe. It is a “network of networks” that covers the world. The expansion of the Internet and the development of the Information Society in the past 20 years has challenged the postal industry to evolve and innovate, in order to be relevant to the new needs of the digital citizen. Universal Postal Union (UPU) research on the development of new services has shown that this evolution continues to gather momentum every day. At the heart of this innovation is the emergence of a digital postal network, which is a complementary channel for the availability of postal services. This is again a “network of networks,” which interconnects national digital postal services to provide international services, thereby enabling greater trust in cross-border communication and commerce in the digital space. The UPU is tasked by its members to extend the single postal territory, embrace innovations around digital postal services, and build a technical and legal framework under which these international services can be managed and trusted.

This paper discusses the nature of the challenge presented for postal organizations by digitization, and presents parcels and eCommerce as a real opportunity for profitable growth. These areas are discussed from the perspective of a changing customer profile, informing the need for a new product offering and operating model, but in the context of a highly competitive and evolving market. Australia Post is presented as a short case study.

Shipping is one of the most important barriers for the growth of international e-commerce. Current research focuses primarily on the role of postal operators in supporting domestic e-commerce and analyzes particular services covering a few aspects of the cross-border e-commerce value chain. This book chapter aims at analyzing the role of postal operators in supporting the growth of international e-commerce. It proposes and discusses four key value propositions of postal operators: 1) cost effective shipping services, 2) enhancing trust, 3) customer management, and 4) universal coverage. The chapter also identifies and analyses innovative postal services along the value chain of cross-border e-commerce, namely: access, payment, collection, transport, delivery, customer service, and return services. By the end of this chapter, executives from the e-commerce industry will have an understanding on how to better cooperate with postal operators to provide new value added services for customers. Postal operators' executives will also be invited to develop new global business models based on product innovation and service diversification adapted to the new needs of e-commerce customers.

This paper discusses the shift in paradigm of logistics service providers (LSPs) in relation to the booming e-Commerce industry. It discusses the consumer pain points for online shopping, and the demand for LSPs to move upstream to provide retailers and e-Tailers with a full-service package.

Swiss Post has been innovating for years, honing its expertise as an actor in the digital world and exploiting the unique selling propositions it owns in the physical world. The newest example of its successful entry into the digital realm is the electronic health record, with which Swiss Post ensures the secure exchange of medical data. The development of digital services is related to the role of a trusted intermediary that Swiss Post already plays in the physical world, and one that it aims to also assume in the digital world in the future, in particular for government-related processes. This chapter shows the development of Swiss Post's digital service for the government, as well as providing examples and sharing thoughts on future developments.

The digital economy has transformed several industries, resulting in higher productivity, greater consumer choice and lower prices.Digital platforms of communication are producing massive competition in the postal sector. Traditional mail volume is down, while delivery points are up. The digital world provides opportunities to various public, as well as private, organizations to broaden their services and product range. Most postal operators worldwide have responded positively to this opportunity, and adopted postal e-services to improve the quality of existing services and introduce new value-added services. e-Government, which involves use of information and communication technology to facilitate the development of small and efficient government structures, has found a natural implementation partner in postal services, which have a vast and extensive network of outlets and a broad outreach in the country. This study explores the extent of the various roles played by different postal operators in implementing e-government services. Case studies based on Empresa Brasileira de Correios e Telegrafos, Post Italiane and Saudi Post are taken up to analyze their role as e-government service-provider partners. The study will help to outline the potential role of postal operators in helping governments implement digital services.

The changes resulting from new technology are bringing both possibilities and problems to societies and world posts. Forces in four areas are among those shaping the future: the reprogrammable world, commerce, work, and megacities. World posts will have many opportunities to build new services and ease the disruption to citizens and businesses if they are prepared to adapt their business models.

Network industries are traditionally strongly influenced by sectorspecific regulation, of which universal service obligations (USO) play a particularly important role. In these sectors, USO impact market forces by shaping competition asymmetrically. They also interfere with other regulations, such as intellectual property laws, which are of increasing importance in these industries. This interaction has become of interest in the postal sector due to its recent convergence with telecommunications and the emergence of innovative services at the interface of the two sectors. In free markets, the design of intellectual property right trades off investment incentives against market distortions due to (temporary) exclusive rights. USO distort competition and thereby affect the optimal solution of this trade-off. This paper discusses various aspects of the influence of patents on universal service provision. It also illustrates these effects by means of a simple model of an innovation race under asymmetric regulation, and with forced licensing to derive regulatory and policy implications to safeguard a cost-effective and consumer-oriented provision of universal services.

Postal Services in the Digital Age looks at the status of the postal industry and the possibilities postal operators have to maintain their strong role as connectors and solution-providers in the market. The digital age has changed the needs of customers, and with the new demands, as well as declining mail volumes and strong competition in new and profitable areas, postal operators face huge challenges. This makes it important to focus on the strengths and unique selling propositions (USPs) of postal operators, and build a service portfolio around these strengths in order to maximize their USPs. This article summarizes the findings of Postal Services in the Digital Age, and creates, based upon the input and findings of other authors, a picture of the core postal competences, value propositions and new roles that would enable postal operators to strengthen or regain their position as connectors and solution-providers.