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ECOMPRO – The Universal Postal Union Focuses on Parcels

Date: February, 2015 --

ECOMPRO – The Universal Postal Union Focuses on Parcels

At the Universal Postal Union (UPU) meetings in 2014, the postal systems of the world launched a carefully constructed, ambitious, and revolutionary development program among its 200+ member countries. The eCommerce Program will improve and speed-up international parcel deliveries for your benefit. 

In reaction to the phenomenal increase in parcel and small packet traffic in the international system, and the corresponding decrease in letter mail, the UPU adopted a multi-faceted eCommerce development program. This is known by the acronym “ECOMPRO” and it calls for an aggressive set of activities and improvements, many of them long over-due. Five categories of action have been identified: market development, postal electronic services, logistics, interoperability, and payment.

Market development includes projects in promoting and supporting development of online and internet capability in certain markets. These development projects are aimed at medium and small enterprises, primarily in the developing economies, and work on standards and security. In many countries, especially in Latin America, exporting products is a frustrating, bureaucratic nightmare, sometimes worse that the importing nightmare. Solutions will be developed. 

It is a cheering note that the program calls on the Direct Marketing Advisory Board of the UPU to participate. The “DMAB”, which traces its origins to work jointly sponsored by the USPS and the US DMA, now has a large membership from the marketing industry in the US and Europe as well as local Posts from around the world. 

It works within the UPU to “increase the provision by the Posts of direct marketing-related products and services, including direct mail”.  Most of its work consists of seminars and studies designed to help developing markets import direct marketing techniques, especially direct mail. Its seminars for posts to educate them on direct marketing and how to develop a market are held around the world.    

Postal electronic services work will focus on authentication of online retailers, eCommerce buyers and other trust and security exercises, including a secure mail service with .post. “Dot Post, or “.post”, is the new top-level domain open only to postal systems and referred to in our article Hybrid Mail Explained: A Conversation from the Future.  

Other projects focus on a “global repository for postal e-shops, an integrated eCommerce IT framework” and global track and trace.  This latter service is not far off and is much too long in coming. The goal is to track every parcel in the global postal system just as is done by the private courier industry. 

Logistics projects will work on modifying current strategies and practices to make parcel and packet carriage faster and more secure; a major goal is to move as much of the process to the digital realm as possible. This will obviously involve integrating communications with air carriers and Customs authorities world-wide.  Obviously, this initiative responds to the electronic and digital applications the private carriers have implemented. Faster and safer are the goals. Remuneration models will be examined and supply chain security and practices regarding Customs and airlines will be improved.

As concerns Customs clearance, the UPU member posts have an advantage over the private carriers because their traffic, which in the past has been primarily letter mail, is often treated in many countries with a less critical eye, at least with respect to “packets”, which are treated in the UPU system as “letter mail”. The “packet” can be up to 2.2 pounds in weight, and millions more of them have entered the international postal system each year! For example, the number of “packets” imported from China to the US through the USPS is rumored to have grown by 200% in the last three years. 

Also in this category is a project to make returns, for whatever reason, more efficient and secure, with links to Customs for refunds of taxes and duties, if applicable.  This has been one of the business world’s most frequent requests, together with delivery point address verification, for many years.

The Interoperability category includes work on information exchanges to improve speed, security and customer service. Addressing is specifically referred to with a project for address verification in EDI messages. It is anticipated that verification would be done within a system that would confirm both sender and receiver addresses by reference to the UPU’s Post*Code database.

This is an aggressive, much needed, and imaginative, project. To the extent the verification system becomes something that customers will insist on, this could serve as a powerful influence to force more countries into expanding their address systems. The project should definitely result in more accurate delivery and fewer “undeliverables”.

The final category, Payment, includes new product development in the areas of Cash on Delivery (COD) payments. COD is common in countries which lack developed financial services. For example, in Russia, over 90% of parcels are delivered COD, and it really is “cash”.  

In parallel with looking at COD systems there is a project on developing alternative means of payment. One of these is an “escrow service” in which the seller ships only after he receives confirmation from the destination post that it has received cash payment from the customer. If the customer accepts the product, payment is released to the seller. It is possible that there is less “buyer’s remorse” in this scenario than in a straight COD delivery. This also responds to a strongly expressed opinion in many countries reflecting the need to provide this service where credit cards are less ubiquitous and COD is common.

Finally, there will be a review of the terms of the remuneration amounts payable between postal operators for postal payment services. The US will, unfortunately, not be very engaged in this since its payment services are extremely limited.

Given that the next UPU Congress will be in 2016, the POC and its members don’t have very much runway left to fulfill this extraordinarily aggressive plan. That said, there remains a sense of urgency. This is no doubt driven by the combination of the phenomenal drop in international letter mail volumes over the last eight years and the corresponding extraordinary growth in international eCommerce directing the growth in small packet and parcel traffic.

At Data Services, Inc. we are pleased that this aggressive multi-national effort has been undertaken. It will benefit our clients with faster, more efficient, and hopefully more economical parcel and packet services, and many of these improvements will flow through to the letter stream. We also understand that pressure remains intense on the posts to improve their address systems, which will speed deliveries and lower delivery costs.

Data Services, Inc. will continue to publish updates on the continuing developments in the international postal industry that may impact your business as well as your global contact data and your use of it!