End-to-end Delivery: Post

The basic postal service has been established for well over a hundred years but with email gradually replacing letters, it faces significant challenges - unless it is reinvented for the 21st century.

This section discusses:

Existing Provision

What

The delivery of small items – mostly printed papers but also “small packets” – to individual properties is a service that most of us take for granted.  The definitions of “letters” versus packets and the upper limits on size and/or weight vary from country to country but as we are proposing to provide “parcel” delivery services as well as letter and small packet, the exact boundary is immaterial. For the purposes of this service we shall be considering printed matter only. This includes:

The common factor in all of these as that they are essentially flat, rectangular and can be stacked safely. The current Royal Mail definition is:

”The maximum dimensions for a Letter are 240mm x 165mm and no thicker than 5mm. It must be no heavier than 100g.
The maximum dimensions for a Large Letter are: 353mm x 250mm and no thicker than 25mm. It must be no heavier than 750g.”

How

National backbone networks for the overnight delivery of mail are now highly mechanised with sorting by postcode largely automatic (except in Ireland where the debate over whether they need postcodes rumbles on to this day). Barcodes have long been used in the U.S. and are starting to appear in the UK too.

Overnight services carry most of the long distance post by a combination of air, road and rail. In the UK, local sorting offices then dispatch postmen to drive, walk or cycle a route that varies little from day to day. They typically use very small vans to deliver in rural areas. The actual point of delivery varies widely around the world and can be to:

In some countries, deliveries are not made to every household but only as far as neighbourhood offices which individuals must visit to collect their mail.

In the United States, a recent – though blindingly obvious – innovation has been to collect outgoing mail at the same time as delivering incoming mail. While this is a real benefit for businesses, it doesn’t really work, even if it were offered, for residential customers as they cannot guarantee to be at home when the mailman calls. So most of us continue to traipse to the nearest post box on a regular basis – and to the local post office any time we need to post something other than a standard letter or card.

The need to visit the post office has also been reduced – though again, primarily for businesses – by the introduction of online and PC-based payment mechanisms. Typically this involves printing your own address and postage-paid label which you then affix to the item before posting it.

Security of deliveries is good but not perfect. There are horror stories of postmen who either intercept, fail to deliver, steal or even hoard mail. However, there is a general perception that the service is fairly safe and reasonably secure. It is, after all, still used in preference to online messaging to advise customers of credit card PIN numbers and the like.

A further problem, which I personally suffer from, is an over enthusiastic dog who can reach the incoming mail before I do. It’s tough to pay your Visa bill when the corner showing the total is inside your terrier.

Volume and Frequency

In Britain, we never miss an opportunity to compare today’s service with the “good old days” when there were two or even three postal deliveries a day. In many areas we can no longer rely on a first delivery before leaving for work as we used to just a few years ago.

The rise of E-mail has undoubtedly reduced the volume of mail sent but the rise in “junk mail” seems to be more than compensating for this. A substantial proportion of what is delivered these days is unsolicited “junk” mail. When added to the envelopes which are almost never reused, this results in a ridiculous proportion of the paper being received going straight in the bin – or, if we can bothered, the recycling bin.

The Mailing Preferences Service allows residents in the UK to opt out of unsolicited junk mail but this does not stop any company that they have dealt with continuing to push substantial numbers of trees through their letterbox. Personally, I shop with several online companies and only ever order online yet they insist on sending catalogues and special offers in the post every few weeks. There appears to be no way to stop this ridiculous waste of their money and our trees.

Financial Model

In Britain, there has been a universal delivery service since before the start of the last century. A letter costs the same to send to your next door neighbour as to the outermost Hebridean island.

“Second class” post is somewhat anachronistic and feels almost like an insult to the recipient – telling them that their letter is not as important as most. There is little if any benefit to the system in having the two classes. It has been reported that second class mail is deliberately slowed down to make the first class premium appear more worthwhile.

After more than a hundred years of charging based on weight, in the last few years the Post Office moved to a combination of weight and size – which may well reflect actual costs better but has led to far more mispriced items and queues at Post Office counters to ask the clerk to see if your package will fit through the Perspex guide and qualify as a “letter” or “large letter”.

Optional premium services abound. Guaranteed delivery times, signed for deliver, optional insurance and so on are all offered.

The very future of universal delivery to the doorstep is under threat as the more lucrative business mail is creamed off by independent companies, leaving the publicly owned postal services constantly re-trenching and fighting to break even. As email and online ordering and billing continues to chip away at the volume of “snail mail” being sent every year, there will come a point when the small number of items being delivered to each door cannot sustain an entire national infrastructure. At some point, price of posting to residential addresses must rise or home deliveries will be replaced by collection at local offices – as already happens in many countries.

In what appears to be an effort to fend off this day, the postal service seems to be all too willing to deliver junk mail to keep their revenues up. A somewhat higher price per item would go a long way towards making these companies target their mail more carefully and create far less paper waste.

Providers

The traditional, often nationally owned and run, postal service has been struggling to stay competitive with business delivery services but for residential customers is often the only regular – and affordable way – to get printed matter to the home.

Delivery of mail to residential properties is still a closed market in many countries. Even if it is opened up, the market is not very attractive – certainly in comparison to business deliveries. The relatively low volume of mail to each address; the market expectation of only a few pennies to post a letter; the huge area to be covered and the commitment to universal delivery makes it a much more onerous and less enticing proposition than creaming off the lucrative business post.

Trends

The days of “bills landing on the mat” is, thankfully, numbered. More and more of us are opting for online statements and paying online rather than posting cheques. We are also writing each other fewer letters as more and more of us switch to email for person to person communications. This means that mail services are desperate to keep their revenues up enough to maintain a viable daily delivery network to everyone. The only things most of us really look forward to and would like to continue receiving in the post are postcards and greetings cards – and those alone are hardly going to keep the post office in business.

Getting up early enough to deliver everyone’s mail before they leave for work is not a terribly attractive career choice and although not highly paid, the unpopular hours are not to everyone’s liking – especially if they have to do this every morning. So we see early morning deliveries becoming “sometime during the day” deliveries. Second deliveries are becoming rarer and rarer as are weekend deliveries and collections.

In the UK, the trends are only too obvious. In efforts to stay viable the post office must be making it far more attractive than we, as recipients, would like for businesses to send huge amounts of junk mail. It cannot be in the public’s interest to encourage the current level of waste and nuisance. Unfortunately, the falling cost of colour printing and the ability to personalise each catalogue is further fuelling this assault on our door mats.

As the postal service also has to run all of the post offices, it is very difficult for it to turn a profit and yet keep every sub post office open for the benefit of its local community. The long term outlook for a postal service based on the current model is bleak. It will continue to wither away. Services will gradually be cut back until we lose universal delivery.

There is not a long term sustainable future for a business that has to deliver to every property in the land when hardly anyone is sending things other than mass mailings at a few pennies each. The sooner postal services are merged with other services so that they can share infrastructure and staff rather than have to stand alone the better. The challenge is to do this without losing the value of the current postal service and the thousands of Post Offices that are an integral part of it.

The great debate in the UK over whether or not to privatise the Post Office is missing the point. There is no future for a post only business. The bit we all love and care about – our daily deliveries and local post offices – needs to become one aspect of a better, more comprehensive system. The backbone distribution network could be run by TNT, DHL, UPS, FedEx or others and none of us would care. What we want are friendly, conscientious and trustworthy staff delivering a service we can depend on.

With Localnet

What

Localnet’s “postal service” applies to letters, cards, loose fliers, catalogues and small package that will fit within the bright yellow PaperBox. The Royal Mail's definition of a “large letter” is a reasonable starting point. 

Note that envelopes are not necessarily required for many items. Unlike the traditional service, a simple sheet of paper can be sent without even being folded as the PaperBox will hold A4 and American “letter” sizes easily. There is no longer so much need for the envelope as the new system provides better privacy, protection of the contents from both rain and abrasion and avoids the need for every item to display the recipient’s address. Envelopes and even address labels or printing therefore become optional and, to reduce waste, volume and weight are actively discouraged.

This also applies to plastic outer envelopes as used, for example on magazines that are delivered to ones door on subscription. In fact, rather than the current wasteful provision of two parallel distribution paths for magazines (those on subscription by post with others ordered via the local newsagent being collected there or delivered as part of a paper round), all magazines should really be delivered using the “Newspaper” service and without needing an outer wrapper or even a customer specific label if the system can place them from a stack into the appropriate boxes based on database entries rather than someone having to read a label.

How

Mail is delivered, in a locked PaperBox to a DeliveryPoint at each property. Because items remain safely locked in their box until the intended recipient opens them, they are more secure and safer than before. My dog, for example, cannot open the Delivery Bay drawer to get at the newly arrived box. Nor can she extract the letters from the box and begin chewing them.

The “signed for” service is not offered as it gives little benefit – yet significant overhead – when compared with the automated tracking of deliveries that is provided as standard.

To send mail, residents place it in the “Post” compartment of a PaperBox which is collected later that day from their property. There is no need to apply or print stamps or postage labels for standard first class delivery as these are applied at the LocalHub and billed to the sender’s account.

Residents are given three options for the early morning delivery round:

Note that the box can also be used to send waste paper and cardboard back for recycling and users are encouraged to place unwanted envelopes, sheets of paper and junk mail items straight back in the box. The weight of paper returned is measured and a credit given to the resident.

Volume and Frequency

The first delivery round each morning (including Sundays, though this may be an hour later than on other days of the week) prioritises delivery of mail in PaperBoxes. Most properties will receive one box but more can be added as needed.

PaperBoxes are collected on all subsequent delivery rounds throughout the day.

Delivery to addresses within the LocalHub's area will be made, at most, two delivery rounds later and certainly within twenty-four hours.

Financial Model

As with traditional postal services, the sender pays.  If Localnet is restricted to the “last mile” of collections and deliveries, relying on the existing mail service’s backbone distribution network, then it makes sense to maintain the pricing policies and rates of the latter as these would be charged for mail leaving or entering the Localnet area.

In return for providing these local delivery and collection services – and therefore saving the postal service having to do so, a proportion of the postage revenue should be payable from the mail service to the Localnet provider.

Businesses can make arrangements directly with a Localnet hub to bulk deliver items but the pricing policy for this does not have to reflect the desperate need to keep revenue from this service up as is the case with existing “post only” businesses. By contrast, the pricing policy must reflect true environmental costs of such deliveries and must encourage businesses to reduce waste, volume and weight of deliveries. Therefore the best rates are for single, unfolded sheets on recycled paper, printed at the LocalHub – and get progressively more expensive as these criteria are relaxed.

Residents get a credit for every kilogramme of paper or cardboard they send back for recycling. This incentive can be funded by a “nuisance” element that is charged to those who send unvalued junk mail. If the value of the item someone has just received is less than the fraction of a penny he will get for sending it back to be recycled, then it probably shouldn’t have been sent in the first place. Knowing that by recycling a catalogue immediately, not only will you be paid in proportion to the weight of the offending article, you will also be making the sender pay for wasting your time, I think we will see recycling levels close to a hundred percent by weight if my post is in any way typical.

Providers

Although localnet will be the ultimate deliverer and collector of mail to and from our homes, there is still a role to be played by the backbone national networks of the existing postal services. As they lose the majority of their staff to localnet, they end up in the same position as the courier and parcel companies they have been losing business too over recent years. This actually means that they will be better able to compete than at present - though they will have lost their monopoly (where this still exists) on the “final mile”.

Exactly where the boundary lies between localnet and the national/global carriers of mail is debatable. Initially, it probably makes sense for the existing mail service to continue to sort the mail using their expensive, highly mechanised systems to the same level that they do today. Rather than having their postmen manually prepare the items for their forthcoming round, however, this would become a part of the loading operation for the morning round within a LocalHub. There it would be done along with the sorting of the morning newspapers and breakfast goods.

Evolution

The switch from printed to electronic mail, billing, payments, books and catalogues will continue but there will be a section of the population (mostly elderly) for whom this transition will not welcome and will not happen in their lifetime.

However, unlike existing domestic mail services, Localnet does not rely on postal revenues to remain viable. It is therefore not obliged to continue offering unrealistically cheap delivery of wasteful, unwanted mail in order to subsidise universal delivery.  Delivery of printed post should gradually fade away to the point where it is genuinely a real surprise to receive something physical – like a birthday card.

 

Comparison

The table below assesses the impact of localnet on this service on a scale of -5 to +5 (details here)

  Existing services As part of localnet Score
Scope Arbitrary upper bound on size and/or weight. Seamless service as parcel delivery is part of localnet too. +1
Frequency

Daily but threatened. Rarely before breakfast for most residences.

 At least two collections and deliveries per day. First one always before breakfast. +2
Security Vulnerable and readily pocketed at many points in the process. Casual workers a particular problem.

 Locked boxes much more secure. More traceable. Permanent staff more trusted and can be held to account more easily. +2
Convenience Collection services only for businesses. Collection from residential properties. +2
Cost Good value in comparison with courier/parcel services. Universal delivery charge. Comparable for national deliveries. Potential for cheaper services within the local area. Sharing last-mile delivery infrastructure and staff must bring costs down significantly. +2
Quality Traditionally trusted and respected but public perception at least is of a deteriorating service. Should be restored to days of “known” friendly and reliable postman. +1
Carbon Footprint Vans normally diesel. Travel long routes when delivering mail alone. Exclusively electric. Much shorter rounds, sharing vehicle overhead with other services. +1
Time Posting items requires trip to post-box and often, for more complex services, to the post office where queues are common. Home collection and full online service avoids need to travel. +1
Resources Used Envelopes and outer packaging wasted. Junk mail encouraged. Less need for outer wrapping. Junk mail actively discouraged. +2
Reuse & Recycling Although paper is widely recycled, there is no “joined up thinking” to try and recover as much of this waste as possible. Made very easy - put waste back in same box while you have it in your hand. Traceability of source and recycling rate for disincentives and incentives respectively. +3
Landfill Waste Plastic outer wrappers on mail (e.g. magazines) to keep contents dry. Wrappers no longer needed on most items. +1
Other Differentiators Old-style working practices holding back modernisation of Post Office. Almost annual hand-wringing about what to do with the Post Office. Solves the political problem of what to do with the Post Office while giving its delivery staff more varied and flexible positions. +3

Services