During 2015 we – experts from Postal Administrations, CEP Services, etailers, manufacturers, entrepreneurs, marketers, the European Commission, etc. – have all understood that the Internet of Things (IoT) is changing cost structures, and with it the business models, of services which currently support the value chain in parcel delivery to create an Internet of Parcels.
Digitalization and the Internet of Things are creating the new
framework conditions for the service economy whilst proprietary
systems are becoming unsustainable.
In the not too distant past
proprietary systems, safeguarded by monopolies, secured by regulated tariffs,
and guaranteeing daily delivery, were
needed to maintain a certain level of communication and exchange of goods,
nationwide and globally. However these times are gone.
Manufacturing and the trade of consumables has created a global, digital service infrastructure in which the communication media needed to exchange information to facilitate trade and its related transportation infrastructure are based on commonly established standards.
The push for first & last mile, open and sustainable applications, leads to flexible, ad-hoc delivery networks, offering not only area-wide coverage of everything, by everyone; but nationwide or even global coverage.
Some postal administrations cover a
vast and attractive market – for example, the US Postal Service, China Post or
Japan Post. Their domestic market is big enough to create a business
environment in which a proprietary system can still offer a competitive
advantage, supported by national legislation and regulation.
Over the last couple of years
the UPU has undertaken remarkable efforts to provide a sustainable solution to the
growing demand of ecommerce for seamless x-border delivery.
The result is an integrated approach, combining already existing UPU service platforms for those postal administrations entitled to use these services.
Specific products and services have
been developed and enshrined in the UPU convention and regulations to fulfil
the growing demand for x-border ecommerce B2C delivery functionalities
It comes as no surprise that, facing competition in their domestic markets and being required to respond to the demands of the European Commission for better services and greater price transparency for parcel delivery throughout Europe, European postal administrations are using their access to proprietary technical solutions built by the UPU/PTC and run for them at cost, to exclude competitors in x-border ecommerce related delivery:
Bilateral or multilateral tariffs for the last mile delivery of ecommerce postal items weighing 0 – 30 KG – currently neither domestically regulated as letter or parcel items in any EU country – add to this picture.
However, UPU, bilateral and multilateral agreements at IPC level are tailor-made to protect the domestic markets of postal administrations.
But whenever these entities operate outside their protected domestic environment, entering the postal territory of another postal administration, their proprietary applications and solutions cannot be used.
The Courier – Express – Parcel (CEP) market is a good example of this development.
Most CEP services in Europe
have a mother company which is a postal administration. Deutsche Post – the
“Post for Germany” – uses its international brand “DHL” everywhere outside
The boundaries between the means of production, regions and labour in service industries are dissolving. CEP services must seamlessly integrate with the means of production, storage (first mile) and customs, transport, payment and access preferences mirrored in delivery IDs per recipient (last mile).
As the postal world extends
its systems to serve retail, manufacturing and retail are extending their
applications into delivery.
The challenge for the postal
system is that its global use is limited to designated operators.
This excludes those who
operate either outside their national postal environment, or those who are not
entitled to use “postal systems” and who have therefore developed their own
The challenge for manufacturers and retailers is that integrating third party proprietary systems is costly in terms of:
GS1, the not-for-profit
organisation which develops and maintains open barcode and related tracking and
tracing technology for manufacturing, retail and item tracking in general, has extended
its coverage to include first and last mile delivery processes, including B2C
item-related CEP services.
systems approach creates an environment in which carriers can use their own
internal barcode symbology in addition to the open barcode symbology maintained
globally by GS1.
advantages for retail and manufacturing are huge.
GS1 is the
leading global not-for-profit organisation providing open standards for item
related tracking across the whole supply chain, so that manufacturers, retail
and service partners can all use the item-related information seamlessly.
therefore no surprise that Alibaba and other leading Chinese ecommerce providers
have also committed to adopting GS1 standards.
As access is open, anyone handling the item can read and access content related to the item. Item-related content can also be restricted to users based on rights policies, and on an individual identification basis.
Some of the national postal administrations already use GS1 barcodes and related tracking technology (RFID, etc.) when operating outside their own postal territories.
Applying GS1 standards for B2X delivery leads to a highly integrated platform to which CEP companies, senders and recipients gain access globally.
Open standards for track & trace, harmonised labelling and interfaces to applications and systems are being developed based on the EU's standardisation strategy and related mandates to CEN/TC331.
When it comes to x-border ecommerce, the hurdles established in the past for the benefit of the few are being dissolved.
As the Internet of Things leads to an Internet of Parcels, all players can look forward to benefitting from open and generally accessible applications.
Walter Trezek is the Chairman of the Consultative Committee (CC) of the Universal Postal Union (UPU).