A rising demand for digital alternatives to physical mail have meant sustained and progressive decline in mail volumes and postal organizations are increasingly diversifying services and following new avenues of growth to combat this. Postal Innovation Digest spoke to Gian Paolo Fedrigo, CEO of Datalogic Automation to learn how automatic identification processes are playing a major part in this evolution
interview with Gian Paolo Fedrigo, CEO, Datalogic Automation
The advent of the digital age was initially seen as a major threat to postal business. However POs have survived and some of the high performers are embracing digitalization. In this regard, how can they optimize the mail value chain?
Postal operators are facing two major challenges in the market – one in terms of falling physical mail volumes and the second to embrace the opportunities provided in the packet and parcels market.
In the first instance, they need to overcome the issue of email versus physical mail and the resulting decline in mail volumes, which is not necessarily a negative development as it forces the industry to improve efficiencies, change their approaches and streamline processes through automation. The opportunity presented by digital technology is a driver for rationalization and if inefficiencies are addressed in this way, profit can be increased even in the shrinking physical mail dimension.
The second challenge has emerged as more goods travel faster and further around the world than ever before, requiring efficient track and trace solutions that go beyond ensuring an item leaves point A and arrives at point B. The parcels and packet business is providing a new revenue stream for posts, who can build on their core competencies by introducing new world-class or enhanced identity and information management processes. In essence, the digital drive is a major influencer of the transportation and logistics market in general and packet and parcels are entering this arena.
What levels of automation are necessary in today’s Postal sector to cope with the explosion of data and potential resulting losses and insufficient tracking measures?
As mentioned, the postal operator is becoming a new player in the parcels and packets business, traditionally the domain of the express shipping providers. Posts already move volume and provide the related services so they can leverage on this established operational service.
Identification is another challenge which is gaining in importance and offers opportunities to go much further than just barcode tracking.
Thanks to broadband and to the convergence of technologies on mobile computers, as well as the decrease in hardware costs, Field Force Automation (FFA) – encompassing tracking and tracing applications is becoming a competitive asset. It extends ID reach – outside the bounds of Logistics Distribution Centers – from drop-off to delivery
The need to capture and store images, determine weight, assess and allow for conditions monitoring and more, all form part of the broader ID requirement in today’s world. In fact the ability to read a barcode has become more of a commodity in the postal sector, while these new enhanced automated solutions bring added value to the entire tracking and logistics process and significantly improve operations inside Postal Distributions Centers. As an example, size and volume detection can enhance efficiencies for trailers with significant optimization of transport costs. Also, when loading a pallet, the correct measures are critical in order to optimize billing, which is based on volume and weight and at the same time factor in enhanced efficiencies for protecting sensitive or high value parcel contents.
What would be the resulting overall benefits in terms of cost, productivity and competitiveness?
Posts are rationalizing and in order to remain competitive they need to redefine their infrastructures and to achieve this they are introducing automation processes.
Automated identification at loading and unloading docks brings flexibility and robustness in demanding environments; automated sorting saves on labor costs and increases efficiency, without having to depend on manual operator skills; while single shot vision systems can frame the whole practical area of a parcel, simplifying operations for managing a database where items are associated with their images. In sorting offices, omni-directional laser scanners can speed up parcel processing as well as systems for track-and-trace of entire pallets.
With all this information coupled with vast amounts of additional data as the digital world advances, what does this mean for postal operators in terms of now having to handle and control both the physical product and its digitized information?
Apart from the logistics, efficiency and security benefits, all this provides valuable information. By capitalizing on the explosion of data in today’s world and the need to aggregate it for the realization of benefits to both the operator and its customer, Posts automatically create a huge asset for adding value to the services they provide. This is already leveraged in by enterprises whose sole business is based on information and database management. Posts can learn from this as it is directly applicable to ensuring their new services or enhanced core operations remain the fuel for business growth. The reality is that they now have the capability to automatically profile an item down to weight, special requirements, volume, what it looks like, where it is going and therefore how it should be handled.
In the parcels and express shipping segment, how can increased automation processes benefit collection and therefore create customer value?
There is no doubt that the parcels business is a new high earner for posts, if developed innovatively. For example more focus on volumes, weight and identity through imaging systems (particularly for high value items) can improve customers’ processes and define a profit gateway for operators.
In express shipping in general, the logistics hub is essentially a shop, where customers buy the service appropriate to their need. These hubs, however, need to constantly look at changing factors which impact on business. For example, due to economies of scale and to reduce costs, transportation by sea is growing once again and if logistics players can reduce costs they have huge opportunities from which to reap the benefits.
In general the movement of people and goods is constantly increasing and as more countries particularly with larger populations and growing international trade, enter the frame, the whole logistics industry – from posts and express shipping to the larger carriers and logistics companies will be challenged in an unprecedented way. Something new will emerge but this industry would not need to reinvent itself or create a brand new process, it would merely facilitate a breakthrough using existing processes and efficiencies multi-fold. As long as operators have embraced automation to meet the industry demands today they will be armed with the right solutions for tomorrow.
The third domain on which posts are leveraging is in financial services. Do you see this side of the business as a silo or does it allow for integration into the logistics and delivery business?
Postal operators are emerging as both a bank and a logistics provider. This means they can efficiently close the loop between delivery and payment, by removing at least one step for the customer and the supplier – payment. By integrating all data from the placing of an order to collection, delivery and calculation of rates, they can add this value-added service to their arsenal when competing for widening their footprint in the parcels business.
Public trust in Posts already exists as they are essentially perceived by customers as banks and secure handlers of valued goods irrespective of financial worth. It is a logical step therefore to seal the entire process from dispatch, tracking, identifying, delivery and payment end-to-end. And industrial automation is the key to this seamless solution for senders and receivers all along the mail value chain.
Datalogic has been a major player in the Postal sector for many years. Do you see this accelerating further and if so, in which areas and markets?
Datalogic has certainly been present in this sector for some time – mainly in automatic data capture solutions. Through our recent acquisition of Accu-Sort, we have doubled our presence in the industrial automation market and gained a reputation in the logistics side of the postal business. The resulting new avenues of growth present us with major opportunities in the North American market, to begin with, followed by global expansion in the material handling business, whether a postal operator or heavy logistics provider. In practice, almost a third of post offices, couriers, distribution centers and airports worldwide use our solutions today.