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In an age of declining letter volumes, the explosion of online shopping and the subsequent increase in parcel volume offers the postal industry an incredible opportunity. According to the 2018 Pitney Bowes Parcel Shipping Index, every second 2,760 parcels were shipped globally. The report also estimates that by 2025 the global shipping volume will reach 200 billion parcels.
That’s a lot of deliveries!
While this is excellent news for Posts, it raises questions about the efficiency of the delivery service. Or rather, the failure to deliver. Recent research suggests that up to 60% of people have missed a parcel delivery and had to make additional arrangements to receive their packages. In the UK, only 90% of packages are delivered the first time. Subsequent deliver attempts add to the Posts’ cost. The estimated cost of the first three groups combined (failed first-time, on-time, every-time delivery) turned out to be over 1.85 billion euros in 2018.
Plus, there is also the cost to the seller’s brand. Customers have high expectations around when they will receive their purchased goods. One UK study found that having to stay at home at inconvenient times to receive the parcel is the main problem customers experience over online shopping.
Problems with parcel deliveries
Given that 90% of respondents to Escher’s 2019 Future of Posts report stating that their success over the next five years will be tied to parcels, optimizing the delivery service is critical. The good news is that there is a solution. PickUp DropOff (PUDO) points. Already in use in many countries, PUDOs produce results. Organizations with PUDO locations have a 4% reduction in costs and an 8% boost in profit margin.
Another unexpected benefit is that PUDO points have proved very useful during the COVID-19 pandemic. Lietuvos paštas (Lithuanian Post) has seen volumes soar in its parcel locker network during the crisis. According to one report, during the first two weeks of quarantine, volumes sent to parcel lockers have grown by as much as 75%.
PUDO locations allow customers to collect and drop-off parcels. They usually have longer opening times than a traditional post office and are typically at easy-to-access locations, such as convenience stores. PUDO locations also reduce pressure on consumer support for the local Post Office during peak periods. By offering more convenience, Posts can reallocate their resources to higher-value services and increase their competitiveness with rival delivery services.
Perhaps the main reason for Posts to offer PUDOs is because it enables them to extend their network and provide consumers with additional opportunities to interact and transact with the Post. This helps Posts meet service obligations, develop new revenue streams, and meet consumer expectations for convenient mail and postal service.
“It’s all about convenience. Primarily for consignees, who can pick up or drop off their shipments more easily without having to physically meet the courier, but also for retailers who operate the network. Hence, when designing a PUDO network, it needs to be ensured that processes, systems and tools are easy to use for the end customer and shop operators.”
Fabian Düx, head of DHL Parcel Europe’s PUDO and locker network
The Escher Riposte PUDO solution enables postal operators to establish their own PUDO network. Posts can set up designated PUDO locations through mobile apps for third-party outlets. We equip the PUDO location with a mobile app, device and printer allowing them to conduct transactions on behalf of the Post.