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Ian Streule

Partner, Analysys Mason

Consumers will see changes in the way they receive post and parcels as the sector embraces a digital transformation in the next few years.

The parcel and courier services sector is undergoing a digital transformation to improve efficiencies and dramatically change the consumer experience. Industry observers point to a future where technology will play a central role with 5G networks and AI-based automation, driverless vehicles — both inside and outside warehouses — and digitally managed and optimised workforce delivering to consumers and connected parcel locker infrastructure.

Parcel lockers

Consumers will see greater real-time tracking of items, coordinated by software which integrates users and companies. Ian Streule points to using more parcel shops and the advent of parcel lockers as the default, low-cost delivery point for parcels and high-value letters such as passports.

“They are transforming the delivery of items from being a physical, traditional knock-on-the-door type approach to one controlled by software and interfaces between consumer and suppliers,” he says. “We will see parcel lockers as central hubs.” Telecoms, media and technology (TMT) specialists Analysys Mason and Last Mile Experts predict investment in 50,000 parcel lockers in the UK by the end of the decade.

It’s a competitive market with big players using digital developments to help their business become more competitive.

Cost reductions

Technology will lead to benefits including optimisation and efficiency of supply chains, cost reductions and contribution to smart towns and city infrastructures. Consumers will see changes as local authorities place emphasis on emissions and move towards developing smart cities, with the parcel sector having to respond. However, governments and policymakers must recognise that the sector needs investment.

Streule, Partner and Head of Postal and Courier Practice at Analysys Mason, says: “There are a lot of digital transformation activities in the sector. It’s a competitive market with big players using digital developments to help their business become more competitive, efficient — and reduce costs.”

Workforce optimisation

Meanwhile, digitally managed workforce optimisation is transforming the way parcel delivery companies organise employees. “We see the need for route optimisation and driving in the most efficient way around towns to deliver. We must also optimise the workforce to respond to very short-term demand changes like same-hour delivery, with some done by autonomous vehicles or non-human devices,” adds Streule.

However, he remains concerned about traditional postal services and believes Royal Mail has been slow to adapt to digital technologies and risks being left behind. He says Analysys Mason can help in laying the foundations for the wider introduction of technology in the postal, parcel and courier sector but underlines the importance of long-term planning of policies and business impacts.

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