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E-Commerce Exports Increase Makes Address Hygiene Critical

Date: October, 2010 --

With ecommerce, and globalization, we are seeing a deluge of parcels. Expensive and inexpensive items ordered from websites and carried world-wide by the posts. Most of the new traffic is internal to countries, of course, but there is an increasingly large amount of traffic between countries. In Europe, the Schengen treaty eliminating Customs and duties among its members has had an impact. As a result, parcel traffic growth within Europe, as measured by the International Post Corporation E-Parcel Group has exploded since the treaty was signed and continues to grow. In fact, some 7% of Royal Mail’s volume is for export, compared with less than 4% for the US Postal Service. 

According to the recent study of the global letters and parcels markets done for the Universal Postal Union by postal consulting group Adrenale cross-border express and parcel carriage worldwide has gone up by more than 50% in both volume and value since 1998. Consistent with that, earlier this year at Triangle’s conference in Miami, Pranab Shah, Head of International at USPS stated: 

“In 2002, 50% of the international revenue was single piece letters, 10% bulk letters, and 40% parcels and express. Last year, revenues came predominantly from parcels and express – 72%! Single piece letters have plunged to 18%, and bulk letters remains constant at 10%.” 

In a recent phone conversation with international postal expert, Charles Prescott, Pranab said their volume was up over 30% this year! 

From 2008 to 2009, small packet volumes of DVD’s and CD’s and similar volumes have exploded from 48 to 56 million on the import side and from 12 to 38 million export! 

In the UK, research by PostCode Anywhere and Interactive Media Retailers Group found The UK online e-commerce market produced sales of goods and services valued at £50bn in 2009, which we estimate results in over 1.1 billion parcels and packets for delivery to UK and overseas consumers. 

So even if your consumer now has an email address, he still needs a postal address to receive a parcel, and you better get it right. 

A bad address resulting in an undeliverable piece of mail or a parcel UAA is wasted money, and expensive or impossible to correct. We estimate that the cost of a returned or undeliverable marketing letter is more than $3: say a bulk rate of 35 cents to mail it, $1.50 for the paper/envelope/printing/allocated design cost, and $1.15 to manage the returned piece. In a 25,000 piece mailing, of which 10% go undelivered, that’s $7,500 in wasted money. What about the sale that is lost or the customer service effort that fails? And 10% is not unlikely in the US since 15% of our population changes address every year, and so a database could deteriorate at 1.25% a month – 8 months = 10%. 

What about magazines? Speaking at the UPU’s Global Addressing Summit, Marco Provazi of International Magazine Service, which provides direct entry magazine and newspaper services in Europe for publishers, estimates that 5% of all magazines are returned to him, and 20% returns in some countries is not unusual. 

And in the parcel business it is even more expensive. At the Global Addressing Summit, the company Intermec estimated that just the cost of misdirection and redelivery of a parcel cost the delivery company £3.40. In the UK, Postcode Anywhere estimates the cost of missing postcodes alone costs mailers £147 million/year and that the cost of an incorrect address to a merchant, in refunds, redirection, replacement, stockage, and redelivery is €25.5 each. Certainly a US cataloger’s loss isn’t much different. 

So the Internet doesn’t make a postal address irrelevant. In fact, globalization makes the problem worse, as address formats are different around the world and orders come in from everywhere. 

Learn how to eliminate expensive UAA mail and parcels by utilizing Data Services, Inc.’s full suite of International Address Correction & Validation tools.