It’s time to cut barriers to cross-border business mail

Electronic communications have left an indelible mark on the postal market in recent years. With volumes of traditional mail in decline, the need for postal operators to harness information technology to diversify services has become ever more urgent.

Postal operators, with their extensive distribution networks, are well placed to claim a largely unexploited portion of the commun-ications market as their own. The scope for development of new products and services is huge. Track-and-trace systems using electronic chips, email delivery notif-ication and internet kiosks are just a few of the innov-ations already on offer.

Many changes are being driven by business users but progress is slow. Cross-border distribution of products directly to consumers, for example, is a cumbersome affair requiring compliance with rigid rule-based national systems. TW4, an Amsterdam-based subsidiary of Time Warner, is one of many EU businesses pushing for a sea-change in the way postal operators cater for business users.

TW4, initially set up by Time Warner for distribution of products such as Time magazine, negotiates postal deals with national postal services for clients in a variety of sectors. Different labelling systems in each country, however, make the process of actually sending goods unnecessarily complex.

Arbitrary rules in countries such as Portugal and Greece, which require the logos of their postal incumbents to be printed on package labels, are discouraging cross-border direct-to-consumer trading, says the company. TW4 has found itself in the situation of having to negotiate exemptions from the Portuguese and Greek rules on a yearly basis.

TW4 is a member of the Postal Users Group (PUG), an ad-hoc alliance of business users of postal services. Chairman Per Mortensen argues that market-opening is the only way that postal operators will overcome their reluctance to tailor services to companies’ needs. "What users want above all is to be treated like business partners by the postal operators, and we firmly believe that liberalisation is a pre-requisite for that. If we can grow our businesses, the postal cake expands for incumbents and entrants alike, and should alleviate the concerns about losing market share in a liberalised market."

PUG believes that current postal systems are a disincentive to the development of the e-commerce market. Consumers need to have confidence in the efficiency and reliability of mailing systems before buying online, they say. An email service asking when parcels can be delivered would, for example, be a major improvement on consumers receiving a note telling them to collect their parcel before it is mailed back to the sender.

RFID - where snailmail meets email

Electronic chips in particular have the power to change the market significantly. Currently, postal services use barcodes to track mail, a cumbersome and inefficient process as numbers have to be input one by one into the operator’s mail system. Radio frequency identification (RFID) tags, with their ability to transmit and receive data in real time, could create highly accurate electronic systems at minimal cost. The global market for use of RFID in postal systems is set to reach more than €2 billion euros in 2016, according to global IT consultancy IDTechEx.

In Sweden, the technology is already being used extensively to create ‘smart packages’ that can record if and when parcels have been tampered with, leading authorities directly to culprits in cases of theft.

Electronic communications have left an indelible mark on the postal market in recent years. With volumes of traditional mail in decline, the need for postal operators to harness information technology to diversify services has become ever more urgent.