Sunday, February 17, 2013

Europe’s post offices ramp up ecommerce service offerings

Many of Europe’s post offices are struggling due to varying degrees of privatization and declining mail volume. As such, many are reinventing themselves particularly as online retailing continue to grow and demand for parcel delivery solutions, efulfillment services and cross-border European solutions increases.

The UK’s Royal Mail is a classic example. In the midst of its privatization process, it saw letter volumes decline 9% in 2012. However, its parcel subsidiary, Parcelforce, accounted for half of the group’s revenue. As a result, the Royal Mail announced plans to invest £75m in Parcelforce’s network including a new parcel processing centre in Chorley, new depots in Cornwall and Hampshire, and the expansion or relocation of nine further depots over the next four years. Parcelforce’s IT will also be upgraded, replacing existing legacy systems.

France’s La Poste has been quite innovative and aggressive in its ecommerce offerings. Its two parcel subsidiaries, GeoPost and Coliposte, combined, represent the second largest parcel operator in Europe, with service offerings spanning the continent. Besides parcel delivery, La Poste also provides e-fulfilment services via a recent acquisition of Neolog and Orium. Orium has efulfillment sites in France, Spain, Portugal, Italy, Germany, Switzerland and the UK.

Another innovative post office is the Netherland’s PostNL’s subsidiary TNT Post. Like La Poste, it to offers efulfillment services. It also provides cross-border return solutions as well as an interesting service, eYouPack, an “all inclusive” e-shipping to Europe tool that via partnerships with Deloitte and Ernst and Young manage cross-border rates and taxes such as configuring VAT.

Other European post offices such as Belgium’s bpost and the Scandinavian PostNord are also offering creative ecommerce solutions to meet the needs of their customers and beyond.

Europe’s post offices present both a challenge to logistics providers as well as one for opportunities. A challenge in that post offices appear to be becoming a clear competitive threat within the ecommerce logistics sector while at the same time partnering with post offices may bring established networks and other solutions to those logistics providers in search of expanding offerings in the European ecommerce market.