ipc-ar-2015 2016 CORPORATE ANNUAL REVIEW 2015 Continuing ...

2016CORPORATE

Continuing the transformation

ANNUAL REVIEW 2015

48 pagesMay 2016

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TABLE OF CONTENTS

INTERNATIONAL POST CORPORATION

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ANNUAL REVIEW 2015

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MESSAGE FROM THE CEO

Over the past years, both the postal industry

and International Post Corporation have seen

significant change and 2015 was no different.

New strategies adopted by posts in today’s era

characterised by rapid globalisation, technological

change and disruptive innovation, are clearly

paying off. Despite the challenges and pressures

of a changing market and ongoing digitisation,

the postal industry generated revenue growth,

ensured strong quality of service and affirmed its

social role. The industry’s financial performance

in the short term seems to be improving, with both

average revenue growth and operating margins at

the group level increasing.

Herbert-Michael Zapf President and CEO, IPC


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Due to the rise of digital communication, mail volumes are declining, putting pressure on operational efficiencies

and quality of service standards. Meanwhile, digitisation has also led to the growth of e-Commerce, which has

driven strong increases in parcel and packet volumes, both nationally and internationally. While posts have fully

embraced e-Commerce, the market shows a lot more potential for postal operators.

Moreover, as highlighted at our 2015 IPC Annual Conference, direct marketing and data-driven marketing have

made mail relevant once again, as studies affirm the strong impact of direct mail as part of the marketing mix.

Over the past year, IPC continued its programme of transformation, with the development of INTERCONNECT. In

record time, IPC deployed a new IT architecture, embedding new technologies and processes, which will enable

us to provide our customers with high-quality services and to support INTERCONNECT. The migration process of

existing services to the new platform is ongoing without any disruption to IPC activities. IPC also completed the

outsourcing of its data centre, ensuring a high level of service. The year 2015 saw great work by participating posts

to integrate the new functionalities in their domestic operations and to prepare for a successful commercial launch

of INTERCONNECT, which will bear its fruits in the coming years.

I would like to thank both our members and the IPC staff for their continued efforts in developing and implementing

these new services and solutions. They ensured the success of our services, with some of them reaching important

milestones in 2015. For instance, IPC’s return solution reached the important milestone of 2m items being returned.

Another major step towards an improved cross-border consumer experience was the launch of the harmonised

label, which was developed to enable a more streamlined processing of international e-Commerce items.

The year 2015 also saw a major achievement for IPC’s Environmental Measurement and Monitoring System: the 21

posts participating in the EMMS programme reached their joint CO2 emissions reduction target of 20% compared

to the 2008 baseline, six years ahead of schedule. This success is another obvious example of how international

cooperation can bring significant results.

I would also like to mention an issue that is strongly linked to our commitment towards sustainability. Last year,

Europe was faced with a refugee crisis. Hundreds of thousands of people were undertaking – and still are – a

perilous journey from their conflict-ridden home countries to Europe in order to be able to build a life in peace. I and

many of my colleagues were struck by these scenes and decided to get involved: in 2015, teams of IPC volunteers

helped serve food to newly arrived refugees, while also providing additional support to a local, recognised refugee

aid organisation. Building on this involvement, IPC adopted a volunteering policy allowing our staff members to

further contribute to a more inclusive and sustainable society.

All in all, 2015 was an interesting year, with many of the changes and initiatives of the past years crystallising into

the strong service offering and renewed confidence of the postal sector. The challenges of the 21st century are still

there, but posts have proven that they can remain relevant and thrive in this context. IPC will continue to provide

support to the postal industry through its highly valued services and solutions, as well as through the work of its

highly professional staff.

ANNUAL REVIEW 2015

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MESSAGE FROM THE CHAIRMAN

The year 2015 was marked by another record

in e-Commerce sales. The success of Chinese

e-Commerce platform Alibaba is just one

example of this global trend: on Singles’ Day on 11

November, Alibaba reached a total of US$14.3bn

sales revenue, a 60% increase compared to

2014. This figure doesn’t only illustrate the rising

importance of Asian markets – forecasted to

become the biggest e-Commerce market – but

it also gives a clear idea of the magnitude of the

growth potential of e-Commerce.Dag Mejdell Chairman of the IPC Board


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E-Commerce today represents less than 10% of the overall retail market, but

the trends seen so far show that we still are in an early phase and that there is

much more potential, including for the posts. With an estimated 10% increase of

parcel revenue in 2015, posts continue to benefit from e-Commerce. However,

postal growth rates still remain far below the market growth rates. Therefore,

a lot remains to be done by postal operators worldwide to tap into that huge

market and to develop a reliable cross-border e-Commerce delivery experience.

As part of its key mission, IPC has more than ever been instrumental in supporting

posts in embracing e-Commerce, notably through the INTERCONNECT network.

The process to launch an innovative and reliable cross-border e-Commerce

network was started in 2013 and has seen huge steps forward in the meantime.

In 2015, the network entered a new phase. The IPC Common Central Data

Store – which will form the backbone of the INTERCONNECT solutions –

was completed. Participating posts have been finalising the integration of the

INTERCONNECT solutions in their commercial offers, which are planned to be

rolled out throughout 2016.

The first effects on the markets should be visible in the months to come. The IPC Board will continue to closely

monitor the implementation of INTERCONNECT and its impact on e-retailers and consumers. It will be essential to

demonstrate that our market-driven approach was the right way to address the remaining obstacles to cross-border

e-Commerce for consumers and small businesses.

As businesses and consumers increasingly sell and shop across borders, it is more important than ever for posts to join

forces and develop common solutions to meet their demands and reinforce their competitiveness on the global scene.

The major achievements realised so far through IPC should encourage us to pursue in that direction.

Lastly, I would like to welcome Australia Post’s Ahmed Fahour as a new board member. He replaces Brian Roche

from New Zealand Post, whom I would like to thank for his active contribution during his three-year term at the board.

A lot remains to be done by postal operators worldwide to tap into that huge market and to develop a reliable cross-border e-Commerce delivery experience

”

ANNUAL REVIEW 2015

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ABOUT IPCInternational Post Corporation (IPC) is the leading service provider of the global

postal industry that provides leadership by driving service quality, interoperability

and business-critical intelligence to support posts in defending existing business

and expanding into new growth areas. It is a cooperative association of 24 member

postal operators in Asia Pacific, Europe and North America. IPC’s solutions and

services are used by over 180 posts worldwide. Since 1989 IPC has set standards

for upgrading quality and service performance and developed technological solutions

that help members enhance service for international letters, packets and parcels.

IPC engages in industry research, creates business-critical intelligence, provides a

range of platforms and programmes for member post CEOs and senior management

to exchange best practices and discuss strategy. IPC also manages the system for

incentive-based payments between postal operators.


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STRUCTURE AND REVENUES1.1

2015 REVENUES

€28.10MOPERATIONS & TECHNOLOGY

€2.83MSERVICE EXCELLENCE

€4.08MINTERCONNECT

€1.37MCREATING INTELLIGENCE

€0.58MINTERCOMPANY PRICING

€1.70MPROVIDING PLATFORMS

ORGANISATION CHART

CHAIRMAN OF THE BOARD

DAG MEJDELL

PRESIDENT & CEO

HERBERT-MICHAEL ZAPF

DIRECTOR MARKETING

HERBERT GÖTZResponsible for market intelligence, sustainability, regulatory services,

intercompany pricing and communications

DIRECTOR OPERATIONS & TECHNOLOGY

ALAN BARRIEResponsible for performance

monitoring, technological solutions, operational services

and customer group support

DIRECTOR FINANCE & HR

CHRIS KALLA-BISHOPResponsible for finance, human

resources and administration

ANNUAL REVIEW 2015

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2015 IN FIGURES1.2

STROBE>300,000 items tracked since 2014

250 flows between 20 countries

E-Commerce

FROM:TO:

HARMONISED LABELnew label launched to simplify label processing and tracking

GLOBAL CUSTOMER SERVICE SYSTEMConnecting 182 posts

and 275 call centres

RETURNS30 accepting

posts

2M items returned by Q3 2015

DELIVERY CHOICE13 countries part of

Translation Engine

Data Platform

DATA PLATFORMCommon Centralised Data Store

10M EVENTS processed per day

3BN EVENTS loaded in 2015

REGULATORY DATABASE

49 countriescovered

ONLINE SHOPPER SURVEY4,075 respondents in 17 countries

GLOBAL POSTAL INDUSTRY REPORT

45 operatorscovered

Marketing


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OperationsSustainability

20.6% CO2 EMISSIONS REDUCTION compared to 2008 baseline

2008

8.88M tonnes CO2 emissions

2014

7.05M tonnes CO2 emissions

UNEX™37

posts worldwide

500,000test letters worldwide

89%J+3 in Europe

CERTIFICATES OF EXCELLENCE

8re-assessments

Quality and measurement

FoMbA

13 POSTS

10 CARRIERS active in FoMbA

TRAY POOL

5M TRAYSexchanged

BAG POOL

1M BAGSexchanged

MAIL REGISTRATION DEVICE

9 NEW AIRPORTS equipped with new MRDs

SPRINTER NETWORK

40 TONNEStransported through network per week

>

ANNUAL REVIEW 2015

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€ 213.8 BNTOTAL REVENUE*

1.5%AVERAGE REVENUE GROWTH*

5.4%AVERAGE OPERATING MARGIN*

2 MILLIONHEADCOUNT*

* FIGURES FOR 2014, SOURCE: THE IPC STATISTICAL DATABASE

LEADING SERVICE PROVIDER OF THE GLOBAL POSTAL INDUSTRY

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LEADING SERVICE PROVIDER OF THE GLOBAL POSTAL INDUSTRY

>180POSTAL OPERATORS TO WHICH IPC PROVIDES SERVICES

24MEMBERS WORLDWIDEAn Post, Australia Post, bpost, Canada Post, Correos, CTT – Correios de Portugal, Cyprus Post, Deutsche Post DHL Group, Hellenic Post – ELTA, Iceland Post, Posti, Le Groupe La Poste, Magyar Posta, New Zealand Post, Posten Norge, Österreichische Post, Poste Italiane, POST Luxembourg, PostNL, PostNord, Royal Mail Group, Swiss Post, United States Postal Service

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ANNUAL REVIEW 2015

HIGHLIGHTS OF 2015

IPC released the UNEX™ 2014 results on service quality of international letter mail, which show that quality of letter mail service in Europe continues to exceed both the EU’s speed objective and its reliability objective.

IPC published the 2015 IPC Strategic Perspectives on the Postal Market, which provides a distillation of the cooperative work carried out between member postal operators and IPC.

On the occasion of the 9th World Cargo Symposium held in Shanghai on 10-12 March, IATA and IPC discussed transitional challenges for postal operators and transportation companies.

On 25-27 March, IPC organised a three-day Postal E-Commerce Asian-Pacific Forum in Bangkok, in partnership with the Asian-Pacific Postal Union (APPU) and the Asian-Pacific Postal College (APPC).

On 16 and 17 June a workshop on sustainability was held at the IPC office in Brussels, Belgium.

IPC launched first version of the Common Central Data Store.

IPC published the annual update of the Regulatory Database, which covers regulatory developments in 49 countries.

IPC held its Annual Conference themed ‘Data-Driven Marketing and E-Commerce: opportunities for posts’. The 2015 edition took place in Seville and hosted 25 chief executives of posts from America, Europe and Asia Pacific.

IPC organised – in collaboration with Posti – the third edition of the IPC Drivers’ Challenge in Ivalo, Finland. The Posti team won the challenge and took home the trophy.

IPC published its 2015 Direct Mail Guide, featuring some key facts and figures on advertising mail and resulting opportunities for postal operators.

1.4

Quarter 1 Quarter 2


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The IPC Senior Executive Forum on Innovation in the E-Commerce Value Chain was held at Google and at IPC in Brussels.

INTERCONNECT Tracking, INTERCONNECT STROBE and STROBE Lite went live.

IPC successfully completed the outsourcing of its data centre to twin data centres in Leuven and Hasselt, Belgium.

IPC published the 2015 IPC Postal Sector Sustainability Report at the occasion of its Board meeting in New York, USA.

The Toronto SCLPP Office of Exchanged received its first IPC Certificate of Excellence.

Deutsche Post commercially launched Ländernachweis, a STROBE Lite product.

IPC co-organised the IPC Stanford Symposium on E-Commerce. The symposium was held in Stanford, USA and enabled postal executives to learn how the latest trends and technologies are changing the electronic commerce landscape.

IPC launched a new harmonised label to simplify parcel processing and tracking through the INTERCONNECT network. IPC also rolled out the Harmonised Label IT Service.

IPC published the 2015 IPC Global Postal Industry Report, a comprehensive annual overview of the state of the postal industry. The 2015 report covered 45 postal operators from across the globe.

International Post Corporation’s Common Returns Platform reached 2m returned items.

Postal sector reaches 2020 target of 20% CO2 emissions reduction, six years ahead of schedule.

Quarter 3 Quarter 4

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BEST-PRACTICE SHARING AND MARKETING

IPC gathers postal operators from across the globe who are all facing similar challenges

and opportunities. IPC’s mission is to provide a platform for posts to share knowledge

and foster international cooperation. IPC produces valuable market intelligence on

postal trends and organises a range of events for CEOs and senior experts to exchange

experiences, while also creating visibility for the postal sector internationally.


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Throughout the year 2015, IPC raised the visibility of the postal sector in general as well as its own activities and

solutions, highlighting IPC’s role in enhancing international mail and parcel traffic and postal collaboration.

Sustainability was one of the main highlights of IPC’s communications in 2015. In March 2015, the IPC Drivers‘

Challenge brought together teams of postal drivers from all over Europe for an eco-driving competition in Finnish

Lapland in cooperation with Posti. The event saw close collaboration between postal communications departments

and received significant attention from international and national media. In November, IPC gained attention from

the press and the wider CSR community when it announced that the posts participating in the IPC sustainability

programme had achieved their collective target of a 20% CO2 emissions reduction, six years ahead of schedule.

The impact of big data on marketing and its potential for posts was another key communication theme throughout

the year. Big data was the theme of IPC 2015 Annual Conference in Seville.

Over the past years, IPC has worked to establish itself as a source of information on the sector for the postal

community as a whole, as well as for the media. A public version of the IPC Global Postal Industry Report was

developed to respond to the need for more publically available information on main trends and developments in

the postal industry. IPC issued several reports on the sector’s results, highlighting the evolution of mail and parcel

revenues and volumes; these reports were widely covered, including in international financial media outlets.

The launch of a new harmonised label solution as part of IPC’s efforts to enhance the efficiency of e-Commerce

parcel delivery was also widely covered by the international media. Moreover, the IPC returns solution reached a

major milestone in its five-year existence: the solution reached 2m returns in the fourth quarter.

As part of our mission to provide a platform to our members, IPC organised its first Communications Forum, gathering

communications executives from posts from all over Europe to share best practices and enhance cooperation. The

event was well-received and will be continued over the coming years.

Lastly, IPC was present at many leading international events in Europe, America and Asia Pacific, most notably the

Parcel Expo in Hong Kong, the Post and Parcel Services Asia Pacific Conference in Hong Kong, POST-EXPO in

Paris, European Post and Parcel Services conference in Vienna.

CREATING VISIBILITY2.1

ANNUAL CONFERENCE2.2

The 2015 IPC conference, themed ‘Data-Driven Marketing and e-Commerce: opportunities for posts’, hosted 25 chief

executive officers of posts from America, Europe and Asia Pacific. The event focused on how posts can successfully

leverage data to boost e-Commerce and explore new business opportunities to connect consumers with brands.

With keynote presentations from leading global marketers, the conference addressed the power of data-driven

marketing in generating e-Commerce sales and the opportunities for posts. Speakers included Brian Fetherstonhaugh,

Chairman and CEO of OgilvyOne Worldwide; Jodie Sangster, CEO of the Association for Data-Driven Marketing

and Advertising (ADMA), and Matt Bailey, Founder and President of SiteLogic Marketing.

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The panel discussion saw contributions from the keynote speakers as well as from Javier Cuesta Nuin, CEO and

President of Correos, and Håkan Ericsson, President and Group CEO of PostNord, on the key initiatives undertaken

in the sector regarding data-driven marketing and the opportunities for posts.

The IPC Annual Conference 2016 will take place in Brussels on 19-20 May 2016 and the theme will be on ‘Postal

Innovation for SMEs: Partnership for Growth’.

Brian Fetherstonhaugh, Chairman and CEO of OgilvyOne Worldwide, told the conference that there is a

perception barrier to be overcome for positioning direct mail within today’s omni-channel communication market.

In the 1970s and 80s, Ogilvy’s founder said: ‘Direct Mail is my first love and secret weapon.’ Voices like this

are required in the marketplace today and this can be through the likes of Google, LinkedIn and top retailers

saying that direct mail is their secret weapon.

I don’t talk about it too often, but this is a magic extra ingredient – this would be the emotional piece that could

be developed by working with ten leading marketers to talk about the secret ingredient that lifts and works

with other ingredients to make this delicious recipe for your end customers. There’s something in there when

you say you’re crazy for not considering direct mail within your communication.

In 2015, Senior Executive Events took place in Brussels, Bangkok and the USA, in line with IPC’s global membership.

IPC’s Senior Executive Forums (SEFs) were focused on those issues most pressing for the postal industry: growing

new business through e-Commerce and innovation, and defending core postal business through data-driven

marketing and advertising mail.

IPC organised a Postal E-Commerce Asian-Pacific Forum, which was held on 26-27 March at the Asian Pacific

Postal College (APPC) in Bangkok and was attended by over 30 APPU member delegates.

The IPC SEF on Innovation in the E-Commerce Value Chain was held on 15-16 September at IPC’s office as well

as at Google’s European headquarters in Brussels. Google’s Marketing and Consumer Insights Director presented

on how a culture of innovation is fostered within Google. He explained how Google has managed to stay innovative

by questioning everything and by seeing what would happen if they stopped following certain business rules. Other

advice given included: focus on the user; own the problem; allow staff to work 20% on a project; and think big by

improving something by 10x as opposed to 10%.

The 2015 IPC Stanford Symposium on E-Commerce took place on 28-30 October and included visits to leading

Silicon Valley e-Commerce players, an executive workshop lead by Stanford Professors and a Symposium including

speakers from Baidu, PlaceIQ, Shopkick and Stanford Business School.

SENIOR EXECUTIVE EVENTS2.3


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Because strategic decisions must be based on relevant and time-critical business intelligence, IPC provides reports

and research on the global postal and parcel industry. IPC’s reports and research give postal stakeholders a

comprehensive and in-depth view on industry performance, trends, challenges and opportunities.

STRATEGIC PERSPECTIVES ON THE POSTAL MARKET

Each year, IPC’s Strategic Perspectives on the Postal Market provides a distillation of the cooperative work carried

out between member postal operators and IPC, which includes the Senior Executive Forums organised throughout

the year.

Published at the Annual Conference in May, the 2015 edition presents the knowledge

shared between IPC members as well as research performed by IPC over the course

of 2014. The report looks at how cross-border e-Commerce continued to grow, at the

increasing importance of Asia and of China specifically, and at the global e-Commerce

market and the role posts can play in this growing market. This publication also provides

insights about the efforts and innovations postal operators are implementing in the area

of data-driven marketing and direct mail.

IPC GLOBAL POSTAL INDUSTRY REPORT

The postal industry continues to transform itself in an era characterised by rapid

globalisation, technological change and disruptive innovation. In a fast-paced world,

posts need to respond to emerging opportunities and challenges quicker than ever.

In this context, IPC publishes the IPC Global Postal Industry Report (GPIR), an annual

publication that aims to deepen understanding about trends in the postal industry and

help posts benchmark their performance.

The 2015 edition was released in November and continued the extensive coverage of

45 posts worldwide as well as the major integrators. This edition of the GPIR is split

into two main parts to allow for new in-depth analysis and commentary. Part One looks

at overall industry trends, while Part Two provides detailed performance comparisons

across individual postal operators.

MARKET INTELLIGENCE REPORTS AND TOOLS2.4

The GPIR is the most distributed report internally with our CEO personally requesting it to be sent to all senior managers at Australia Post. This is a testament to the quality of the work produced in the GPIR.– Australia Post

”

ANNUAL REVIEW 2015

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IPC GLOBAL MONITOR

The IPC Global Monitor is a family of reports that presents detailed and confidential information across key areas

of interest to IPC members. The reports are prepared for member CEOs and executives and their key strategic

planners, economists and analysts, allowing members to assess performance in their home market against an

overall industry average.

IPC’s Global Monitor is released in three separate reports: the Executive Report which monitors trends across key

postal products, the Market Report which monitors market size and share for international outbound letters, and the

HR Report which monitors human resource key performance indicators. All IPC members participated in the IPC

Global Monitor programme in 2015.

IPC CARRIER INTELLIGENCE

IPC Carrier Intelligence Reports (CIRs) provide instant access to critical financial, operational, strategic and market

information for 50 leading postal and parcel operators from around the world in an easy-to-read, consistent format.

The reports are available as a selected service to members and are also for sale by subscription to organisations

outside IPC’s membership.

The reports were purchased by 22 IPC members in 2015. Moreover, the scope of the CIRs was expanded with the

addition of new analysis in the areas of digital and new media, e-Commerce and shares and analytics.

In the coming years, IPC’s Market Intelligence team will continue to align data and reporting with industry trends

and member needs.

The level of expertise is high – the team aren’t just collating numbers, but are looking at the implications and interpretation. The high level and strategic overview of the output is evident. – Royal Mail

”


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Direct marketing is a key focus area for IPC in defending the core business of postal operators. To support this

business, IPC provides research, analysis, case studies and a direct marketing online community for postal direct

marketing professionals. This is why the main topic for discussion at the 2015 IPC Annual Conference was direct

marketing – more precisely, data-driven marketing – and the opportunities it offers for posts.

DIRECT MAIL GUIDE

The IPC Direct Mail Guide is a practical guide to cross-channel direct marketing for marketers, aimed at

demonstrating the power of direct mail, alongside digital marketing communications. Building on the success of the

previous year’s edition, IPC updated the Direct Mail Guide to help members and other stakeholders to exploit the

full potential of mail in a context where cross-channel marketing is becoming the norm.

The content was developed in collaboration with senior direct mail advisors from ten IPC members in Europe, North

America and Asia Pacific. The guide includes direct mail expertise as well as key research findings, interviews and

global direct mail case studies. A chapter on location-based marketing was added and all the case studies were

updated to demonstrate cross-channel marketing.

In 2015, the guide was accessed over 700 times and was translated into Polish by Poczta Polska.

DIRECT MARKETING COMMUNITY

Postal direct marketing experts continue to exchange their views on the online IPC PostBoard community. In 2015,

the community grew by 40 participants to 130 in total. Members have access to reports, white papers, articles and

case studies.

Furthermore, there is a growing online case study library with over 50 case studies and links to sites providing

best-practice guidance on direct marketing. The case studies showcase creative and effective use of direct mail in

combination with other channels, including examples of global and local marketing awards finalists.

The visibility of the community is increasing and IPC’s aim for the coming years is to continue the growth of the

community. In 2016, IPC will continue to deliver value in the core postal business through continuous dialogue with

its members, new initiatives and membership in some of the largest global direct marketing organisations.

DIRECT MARKETING2.5

ANNUAL REVIEW 2015

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more info

https://www.ipc.be/en/programmes/direct-marketing

E-Commerce is a key focus area for IPC. In 2015, IPC organised the first IPC Online Shopper Survey, which

investigates e-Commerce consumer online shopping preferences, expectations and experiences from the perspective

of the online buyer.

The survey provides insights into online shoppers’ preferences and expectations, specifically in relation to the

delivery experience and identifies opportunities for posts to enhance cross-border e-Commerce services to better

meet the needs of cross-border online shoppers. The research was undertaken with 4,075 respondents across 17

countries in 11 languages in September and October 2015.

Key conclusions from the survey include frequency of cross-border online shopping, delivery preferences, origin of

goods ordered, categories of goods, delivery cost, tracking and returns.

Key areas for improvement for delivery carriers remain reliability, tracking and transparency on customs duties and

taxes. Timely delivery is the most important element to be addressed for cross-border shopping as cross-border

shoppers would like to know the specific date their order will be delivered.

In order to help postal operators understand and meet the evolving needs for cross-border e-Commerce, this

research will be repeated annually. In 2016 the sample size will be increased to 1,000 respondents per country.

E-COMMERCE CONSUMER RESEARCH2.6

KEY HIGHLIGHTS FROM THE REPORT INCLUDE:

more info 76%OF CONSUMERS PREFER TO HAVE THEIR CROSS-BORDER PARCELS DELIVERED TO THEIR HOME ADDRESS

59%OF ALL FREQUENT CROSS-BORDER ONLINE SHOPPERS WERE OFFERED FREE SHIPPING

84%OF CROSS-BORDER SHOPPERS WERE EITHER VERY SATISFIED OR SATISFIED WITH THEIR DELIVERY EXPERIENCE


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https://www.ipc.be/en/programmes/e-commerce/online-shopper-survey

REGULATORY SERVICES2.7

A key element of the work throughout 2015 was the focus on e-Commerce and parcel delivery and the monitoring of

developments at the European Commission after the launch of the EU Green Paper, the Roadmap on parcel delivery

and the Digital Single Market Strategy. This included: analysis and follow-up related to the Postal Industry Initiative

and INTERCONNECT activities; internal coordination for the collection and provision of relevant information

and support for the technical reports to the European Commission on INTERCONNECT implementation; and

responding to and liaising with members and PostEurop in this respect. Since 2015, the regulatory department

engages with European posts outside of IPC’s membership, providing support regarding their participation in the

INTERCONNECT programme and in relation with other European projects. In 2016, the cooperation with posts and

other stakeholders regarding e-Commerce delivery and the INTERCONNECT network will continue.

The IPC’s regulatory services also aim at providing members with information, regulatory research, and a platform

for regulatory experts to meet for debate and analysis of strategic postal issues in order to identify requirements for

future research projects.

In order to provide members with up-to-date regulatory information, the department regularly monitors the developments

in the postal sector and the status of the EU law across various fields relevant to the postal, but also to the broader

e-Commerce regulatory context affecting the postal sector. The Regulatory Intelligence services include: the publication

of the annual Regulatory Database, which covers the regulatory developments in 49 countries; the Regulatory Portal

which provides extended regulatory analysis and benchmarking in 27 countries, including the monitoring of 15 practice

areas of the broader regulatory context; and the facilitation of individual members’ regulatory benchmarking requests. In

February 2015, the annual update of the Regulatory Database was published and a month later the new release of the

Regulatory Portal was launched. In 2016, the Regulatory Portal will be enhanced with two new sections, the EU Tracker

and the Regulators Tracker, along with new features and further developments, as part of the new release.

Regular news updates are distributed only to IPC member posts via the weekly and monthly issues of the Regulatory

Flash, which complements the Regulator Database and provides comprehensive coverage of news and initiatives in

postal regulatory and legislative affairs around the world.

In 2015, the INTERCONNECT Remuneration Agreement – Europe (IRA-E), the first multi-

lateral Terminal Dues agreement covering both letters and parcels products, was developed and

signed by 20 postal operators. This agreement, that entered into force on 1 January 2016, is

one of the building blocks of the new INTERCONNECT system setting the basis for a global

postal e-Commerce delivery network. This new agreement addresses the higher importance of

e-Commerce volumes for the postal operators without leaving aside the historical postal business.

One of the main objectives targeted under the IRA-E was to lower the Terminal Dues level in order

for postal operators to be more competitive on the e-Commerce market.

INTERCOMPANY PRICING2.8

20POSTAL OPERATORS SIGNED THE IRA-E

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SUSTAINABILITY2.9

Furthermore, the year 2015 saw the first steps being taken to increase the scope of the quality of service performance

in the INTERCONNECT network. In order to provide more added value to the end-customer, the network has

enlarged its focus from only inbound monitoring in the country of destination – as under REIMS – to end-to-

end monitoring, including the performance of the outbound postal operator in the origin country and cross-border

transportation.

In parallel, the existing REIMS Agreements remain active between 24 postal operators, ensuring a cost-covering

remuneration between the postal operators and keeping the inbound quality of service performance as a key element

to determine the level of remuneration.

The first non-REIMS and non-IPC member post, FSUE Russian Post, started testing IPC’s electronic accounting

tool, iPep. iPep is a unique and modular tool for paperless accounting of Terminal Dues, allowing the postal

operators to proceed with all their Terminal Dues accounting electronically from the sampling information until the

production of the final invoice. iPep is open to any postal operator independently of their membership to IPC and is

currently used by 28 postal operators.

EMMS

The year 2015 was a crucial year in the six-year existence of IPC’s Environmental Measurement and Monitoring

System (EMMS) programme: IPC had the honour of announcing that the 21 EMMS participants collectively reached

the programme’s 2020 targets of 20% CO2 reduction compared to the 2008 baseline, six years ahead of schedule.

The carbon emissions reduction target was set in December 2009 in Copenhagen at the United Nations COP15

event. Due to IPC’s leadership and the strong commitment of the EMMS participants, this target was reached in

2015, six years earlier than anticipated.

Having achieved the 2020 postal sector reduction target for total volumes of carbon emissions, IPC’s sustainability

programme will continue to focus on minimising the postal sector’s carbon footprint by placing a greater emphasis

on efficiency and broadening the coverage of the programme’s target to include Scope 3 emissions generated by

sub-contracted and outsourced transport. In 2015, IPC developed a new efficiency target for the EMMS programme

to reduce total carbon dioxide emissions – Scope 1, 2 and 3 – per letter mail item and per parcel by 20% by 2025,

from a 2013 baseline.


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On its current trajectory, the EMMS group is on track to achieve the 90% Carbon

Management Proficiency (CMP) target by 2020. This has been made possible by

year-on-year improvements in the group’s score. In 2014, EMMS participants achieved

an average of 81% (2013: 79%). This is an increase of 25 percentage points since

2008, and represents an annual average increase of 4.2 percentage points. All results

have been reviewed by third parties.

As every year, IPC published the IPC Postal Sector Sustainability Report, which

reports on the results of the EMMS programme during the previous year. The 2015

report provided an executive summary with an overview of the programme’s results

in 2014, best-practice case studies from operators across the world, and a more

in-depth and technical analysis of the results.

IPC’S OWN CARBON EMISSIONS REDUCTION MEASURES AND RESULTS

IPC is an active member of the United Nations Global Compact, and as such is committed to taking a precautionary

approach to environmental challenges, engaging in initiatives to promote environmental responsibility and

encouraging the use of environmentally friendly technology.

In 2014, IPC’s own carbon emissions amounted to 687 tonnes CO2, a 13% decrease from 789 tonnes in 2013.

Of these emissions, 58% were associated with business air travel, while 35% were associated with road travel

(business and commuting). The remaining 7% were associated with electricity use, heating, paper usage etc. In

order to help reduce business travel, we place an emphasis on the use of alternative options, such as teleconferencing

and remote presentation technologies.

In 2014, IPC also introduced its own company bicycle policy as a benefit for those employees that do not have a

company car. This initiative provides employees who commute by train or bus with an ecologically sound alternative

(or additional and integrated) means of traveling to/from work. In reporting year 2014, 15% of employees eligible

applied for a company bike, showing there is a clear interest for alternative transportation.

For the 7th consecutive year we have partnered with the Climate Neutral Group to compensate our carbon emissions.

The last five years of emissions have been fully offset with Gold Standard credits from Cookstove projects in Africa.

In 2014, credits were used from the Cookstove Project in Uganda. This project has a positive impact on both the

climate and local communities.

Reductions in paper use are driven through the continued implementation of a minimal printing policy and IPC

encourages the printing of documents in black and white and on double-sided paper only. Our printing paper is

100% Forest Stewardship Council (FSC) and EU Ecolabel certified.

20%TOTAL CARBON EMISSIONS REDUCTION IN 2014 COMPARED TO 2008

81%CMP IN 2014

ANNUAL REVIEW 2015

25

DATA PLATFORMIPC continues to further deploy and embed its major transformation to meet market

needs. Delivery networks operated by IPC are fuelled by e-Commerce and driven

by data: data ensures that the whole supply chain – from e-tailer to end-customer

– operates and delivers fast and seamlessly. Therefore there will be a major focus

on source data provision as a corner stone of the e-Commerce model. In 2015, IPC

deployed its new IT architecture designed to drive this data-driven model.


26

DATA TECHNOLOGIES AND PROCESSES3.1

As part of an extensive upgrade of its systems and services, IPC has embedded new technologies and processes to

deliver high-quality services to its membership and beyond. These technologies and processes are now being made

available to our members.

With these technologies and processes firmly in place, IPC will pro-actively engage with its members on a

technological level to create value out of this new platform. Over the coming years, alternative postal architectures

will need to be discussed and evaluated for posts to stay competitive in a changing world.

DATA CAPTURE

As international mail moves through the postal network, it generates business-critical data at source as well as in

the postal pipeline. IPC receives copies of item attributes and event messages generated by posts and exchanged

between posts. IPC also captures data generated by its own systems using RFID technology and Mail Registration

Devices (MRDs) located at postal facilities at inbound and outbound airports.

IPC has implemented major upgrades to ensure a better and standardised capture of data, especially for its RFID

technology and Mail Registration Devices.

RFIDRFID is the enabling technology for measuring the performance of items that do not have a barcode. Since the

introduction by IPC in 1997, it is now in use by well over 50 postal operators and the technology has been extended

to alternative postal applications.

In 2015, IPC expanded the passive RFID network to support INTERCONNECT tracking services. This process

will continue in 2016. Moreover, IPC implemented a new open data exchange platform based on the Electronic

Product Code Information Services (EPCIS) framework to facilitate the RFID data communication with other

EPCIS-compliant networks. IPC also developed a new standard tag testing methodology and qualification criteria

for benchmarking new passive RFID tags. Furthermore, IPC developed new proposals for postal RFID-encoding

standards for item, receptacle and asset tracking.

IPC has implemented major upgrades to ensure a better and standardised capture of data.

”

ANNUAL REVIEW 2015

27

Mail Registration DeviceThe IPC Mail Registration Device allows a quick and simple registration of mail deliveries handovers at postal

facilities situated in airports. The device is installed by postal operators at the point where handlers from the airlines

deliver postal containers to the postal staff and/or where postal staff hand over mail consignments to airlines, which

usually takes place at the entrance of the air mail units at the airport.

One of the main focal points in 2015 was the deployment of new MRDs for Proof Of Delivery (POD) – at the point

of the delivery of mail consignments at destination – and Proof of Custody (POC) – at the point of the handover of

consignments at origin. The year 2015 also saw the completion of the operational assessment for installations for all

IPC members except Canada. Moreover, postal operators outside of IPC’s membership were assessed, paving the way

for further expansion. The first Proof of Pickup (POP) MRD was installed in Miami. During 2015, nine new POD MRDs

were installed, while one POP MRD and four POC MRDs were shipped to interested parties for future installation.

DATA PLATFORM AS A SERVICE (dPaaS)

All operational postal events captured through barcode scans, RFID reads or MRDs are stored

in IPC’s Common Central Data Store (CCDS). In 2015, more than 3bn events were loaded over

the entire year – each day more than 10m events were processed. All data is made accessible

to services and members via IPC’s Analytics Platform and standard interfaces like Application

Programming Interfaces (APIs) or push data mechanisms.

This single platform will deliver all data services, including tracking and analytics. This approach

– Data Platform As A Service (dPaaS) – represents a new method to efficiently blend people,

processes and technologies. The dPaaS was designed to be completely customisable and offers

unified integration and data management. This enables IPC to harness the value of the data

available to improve decision outcomes and operating performance.

In 2015, IPC finalised its outsourcing of its key infrastructure to external, highly reliable data

centres, thereby ensuring a high level of availability and quality of service.

This approach represents a new method to efficiently blend people, processes and technologies.

”


28

ANALYTICSBusiness

Intelligence, Service

Reliability

> 180postal

operators

> 10 M tracking events

per day

> 3000RFID gates in over

50 countries

> 20Mail Registration

Devices

> 3BNdata inputs

per year

E-COMMERCE SOLUTIONS

Tracking, Returns, Delivery Choice

GLOBAL CUSTOMER SERVICE SYSTEM

CARRIER INTEGRATION

Forecast & Booking System,...

PROCESS HARMONISATIONHarmonised Label,

Seamless Customs, …

CAPTURE DATA

STORE DATA

USE DATA

DATA PLATFORM AS A SERVICE (dPaaS)

AT SOURCE

E-TAILERS & CONSUMERS

ONE STORE SERVES ALL

MASTER DATA MANAGEMENTAll reference data in one place: countries, postal operators, IMPC’s, postal codes, UPU code lists etc.

MULTIPLE STANDARD AGREEMENTSINTERCONNECT, EMS, KPG, PRIME, EPG, …

GLOBAL DATA

DATA QUALITY TOOLS

CCDSCOMMON CENTRAL

DATA STORE

ANNUAL REVIEW 2015

29

DATA-DRIVEN SOLUTIONS

In 2015, a new Business Intelligence (BI) platform was launched to deliver reporting, monitoring and analytics to

the members. IPC’s services moved from regular reporting to near-real-time reporting. The platform provides the

necessary basis and support for the e-Commerce solutions offered by IPC: the data is used by postal operators to

support their e-Commerce growth. In 2015, the BI platform was launched in the following areas:

• Global Customer Services Reporting: a tool to enable postal customer service centres to monitor and improve

the service provided.

• ITMATT Quality Monitoring: a tool to manage the availability and quality of ITMATT messages, which are

messages are exchanged between the origin and destination posts to provide information about an item.

• Consignment Monitoring: a tool to monitor and improve leg 2 performance. Detailed down to hub and tail

performance is available.

• Service Performance Reporting: detailed service performance reporting against the INTERCONNECT standard

was made available in 2015.

The platform is fully mobile enabled and has the possibility

of self-service. This will enable the users to create their

own reports and analytics. In the future, this platform will

enable predictive analysis so that members can act pro-

actively instead of reactively.

The new IT architecture also enables posts to integrate real-time services, like tracking, returns services, delivery choice, customer service and label generation. For instance, in 2015, STROBE (Single Tracking of Blind E-Commerce) Lite, an RFID-tracked economy product, was commercially launched. This service builds on different components of the new IT architecture, like real-time tracking based on the RFID network, the integration of the member’s systems into IPC’s CCDS, and applications pushing data to the customers.


30

CUSTOMER MIGRATIONS AND SUPPORT

In 2015, a new programme was kicked off to migrate all IPC customers to the new platform. IPC is working in close collaboration with its customers to make this programme a success.

The KPG network took the lead: all requirements were identified in 2015 in order to be ready for a migration to the new platform in the first half of 2016. Other networks and services – including EPG, PRIME, EMS, UPU Parcels, CAPE and UNEX™ – are planned to migrate in 2016.

A new customer support approach aligning IT services with customer and business needs has been deployed across multiple customer groups and will continue to be implemented in the coming years.

Over the coming years, alternative postal architectures will need to be discussed and evaluated for posts to stay competitive in a changing world.

”

ANNUAL REVIEW 2015

31

MANAGEMENT AND REPORTING FOR INTERNATIONAL POSTAL NETWORKS

3.2

IPC manages and coordinates a number of international postal networks that focus on value-added letter services

(PRIME), express mail service (EMS Task Force group), priority parcel products (E-Parcel Group), and priority

and non-priority parcels (Parcel Performance Reporting group, Kahala Posts Group). For these networks, IPC

provides monitoring, tracking or reporting services, as well as a reliable global customer service system. With the

enhancement of the data-driven services performed over the past years, IPC will be able to offer better support and

services to these networks.

PRIME

PRIME is a network of postal operators working together to deliver cross-border tracked

packet solutions for the e-Commerce market. During 2015, the PRIME membership grew to

137 operators from all over the world.

A new PRIME board was elected during 2015, consisting of Board Members from different

regions of the world. A new Vice Chair was also elected.

PRIME also launched a redesigned visual identity, including a revised logo which reflects

packets rather than letters. Changes were made to the PRIME website (www.prime-posts.com),

including the addition of a section called MyPRIME, which is for members only. MyPRIME

contains documents such as agreements, operational guides and accounting guides.

The volumes managed in through the international PRIME network totalled more than 289m,

a growth of nearly 74% compared to 2014.

EMS TASK FORCE

The IPC EMS Task Force group of 13 postal operators ensures high-quality delivery performance and drives

improvement of how members measure EMS performance so that EMS items are delivered according to customer’s

expectations. The group works closely with PRIME and the E-Parcel Group, as well as with the Universal Postal

Union (UPU) EMS Cooperative. EMS benefited from enhanced performance measurement as well as from reinforced

customer service with the transition to the Global Customer Service System (GCSS).

137POSTAL OPERATORS IN THE PRIME NETWORK

289MITEMS DESPATCHED IN NETWORK


32

http://www.prime-posts.com

E-PARCEL GROUP

The E-Parcel Group (EPG) is made up of 31 postal operators across Europe and North

America and is focused on providing a reliable quality of service for priority parcels. IPC

provides central project management, quality of service monitoring and reporting, support

for geographical expansion, and ongoing service development and enhancement to

operators and their customers.

The group was recently able to come to a fundamental settlement in extending the exchange

of information on parcels in a shorter timeframe between posts. By adopting a shared

presentation-to-customs processing cost, the new agreement provides a financial incentive to

postal operators able to send compliant ITMATT messages to destination posts (valid and on

time), by the inbound operators to use this information, thus speeding up the customs process.

Moreover, EPG started considering a financial incentive to operators that – in implementing the EMSEVTv3 item

tracking and tracing – are able to quickly provide important item data in order to further expedite the inbound

process and improve the end-to-end delivery time.

Though remaining focused on synergies and alignment with other project and services, IPC will continue to monitor

and report on all the areas relevant to the EPG agreement in order to further improve the quality of service and

customers’ satisfaction.

PARCEL PERFORMANCE AND REPORTING

IPC also provides additional support to 13 European postal operators through the monthly Parcels Performance

Reporting (PPR). The reports produced by IPC enable operators to look at their UPU Parcels quality performance

and identify possible weak areas. This solid set of reports includes performance across the end-to-end delivery

process, including customs.

Several reports were enhanced in 2015 to allow for a more market-oriented analysis of the results achieved. The

results from 2015 show that both the priority and non-priority parcel volumes decreased respectively by 3.2% and

9.1% compared to 2014.

KPG

IPC continues to provide services to the Kahala Posts Group (KPG), whose aim is to focus on service performance

improvement to meet the levels of reliability required by customers. These services include quality of service

monitoring, provision of reporting services, customer services and e-Commerce solutions.

During the year KPG and IPC worked closely together to develop IPC’s new customer support approach which is

now being rolled out to benefit all customer groups, providing greater structure and visibility to the IT change process.

31POSTAL OPERATORS IN THE EPG NETWORK

ANNUAL REVIEW 2015

33

E-COMMERCE SOLUTIONSIPC gives postal operators the right tools to underpin e-Commerce growth by

offering a seamless cross-border delivery experience. These solutions respond

to consumer demands for a transparent, hassle-free and reliable cross-border

delivery of goods purchased online. These solutions were enhanced under the

INTERCONNECT umbrella.

the global postal e-commerce network

INTERCONNECTIPC

INTERCONNECT

The INTERCONNECT platform is the result of a unique endeavour undertaken by the postal sector to address

the needs of e-retailers and customers for reliable global cross-border end-to-end delivery service. It aims

at offering customers the same experience when shopping online abroad as domestically. INTERCONNECT

is the outcome of cooperative efforts of posts from America, Europe and Asia Pacific to agree on common

standards for consistent cross-border delivery at three service levels: premium, standard and economy.

Building on the new IPC Common Central Data Store, the INTERCONNECT solutions will address customers’

needs for cross-border tracking, delivery choice, cross-border customer service and easy returns.


34

SERVICE RELIABILITY

INTERCONNECT represents IPC’s response to customer demands for an integrated cross-border e-Commerce

solution. In order to be successful, member posts need to offer delivery reliability and accurate data capture to

inform customers of item progress through the supply chain. The Service Reliability stream of INTERCONNECT

brings together the agreed targets for end-to-end performance and data capture; a suite of Business Intelligence

analysis tools, and performance review processes. To this end, IPC issues interim service reliability data packs to

30 countries every month.

During 2015, IPC developed the business requirement specifications for end-state reporting and compliance.

These specifications were agreed on by all INTERCONNECT posts, who collaborated via the Operations Upgrading

Committee and PostEurop.

HARMONISED LABEL

The over-labelling of inbound postal items received from the origin post is not

only inefficient but it also leads to the presence of multiple labels and barcodes

on packets and parcels. This in turn means a lack of uniformity in the presentation

of postal items on delivery, which does not contribute to a positive customer

experience. Moreover, a substantial number of postal items are missing a

delivery event scan, making these items not measureable and thereby depriving

the customer from a proof of delivery. Therefore IPC worked together with its

member posts to agree on a design specification and to develop and implement a

harmonised labelling solution, ensuring uniformity based on the existing standard

barcode and a set of standardised address elements, icons and layouts. In 2015,

the harmonised label technical capability was fully rolled out in order to be ready

for the deployment of INTERCONNECT in 2016.

The harmonised label was designed and developed to enable postal operators

to optimise the end-to-end processing of international letter packets and

parcels. The new label will present significant improvements for e-retailers and

consumers, by reducing over-labelling, improving track and trace, quality and

transit times, and facilitating delivery.

Furthermore, in September 2015 IPC rolled out the Harmonised Label IT

Service in collaboration with three posts that registered to use the system from

the start; other interested posts can subscribe to use the Harmonised Label IT

Service as well.

ANNUAL REVIEW 2015

35

TRACKING

In 2013, the IPC Tracking project was conceived to ensure full track and trace from despatch to delivery, including

a low-cost measurement and tracking solution for economy and standard packets. This solution was designed,

developed and tested in 2013. The next year saw the completion of the Tracking and Simple Tracking of Blind

E-Commerce (STROBE) central system within the INTERCONNECT network. In 2015, the INTERCONNECT

members started their own IT developments and implementation.

The Tracking project encompassed two key areas. The first area focused on the EMSEVT V3 M40-6/7 standard

and saw the implementation and deployment of the standard in 2015. The INTERCONNECT members are amending

their respective own systems and are progressively deploying EMSEVT V3 M40-6/7 throughout 2015 and 2016.

In 2015, 17 members completed the implementation. The remaining 13 INTERCONNECT members planned to

implement the standard during 2016.

IPC also offers another tracking solution, called STROBE, which combines

passive RFID and barcode to provide tracking at low cost for standard

e-Commerce items.

A simpler version, called STROBE Lite – which is not part of the INTERCONNECT

network – provides tracking fully based on passive RFID. By the end of 2015,

20 INTERCONNECT members had completed the basic set-up of STROBE by

upgrading active RFID gates into active/passive gates.

All along the year, the members participated in the ramp-up phase, which started

in 2013 and will continue in 2016. This ramp-up involved the tagging – by the

members in their outbound OE – of over 300,000 live packets over 250 flows

between the 20 countries since the start of 2014. This provides a large base of

data to fine-tune all technical issues and improve the passive RFID network and

read rates. Most sites in the network (60+) aimed to pass certification in 2016.

Some STROBE participants started live commercial pilots in 2015 and one even

launched it as a commercial product.

Furthermore, seven posts in Europe are currently involved in IPC trials with

Asian posts to test a low-cost basic tracking service for small packets from Asia

into Europe based on passive RFID infrastructure.

20POSTS FINALISED STROBE SET-UP BY END 2015

300,000PACKETS TRACKED SINCE START OF RAMP-UP PHASE

250FLOWS COVERED DURING RAMP-UP PHASE


36

SEAMLESS CUSTOMS

Customs clearance can be a time-consuming and complex process and a bottleneck for cross-border e-Commerce.

Therefore, IPC has set out to ensure a more efficient and seamless customs processing of e-Commerce items within

INTERCONNECT. To this end, IPC developed a portfolio of enablers for seamless customs processes referred to

as Advance Declaration Solutions. The portfolio aims at providing solutions, whether developed by IPC, contracted

by IPC with vendors, or vendor solutions recommended by IPC, at different stages starting at the source with the

e-seller and throughout the postal process.

In 2015, IPC supported the expansion of the signing of Data Sharing Agreements between posts, a pre-requisite

for the exchange of electronic customs declaration data. More analytic functions were added to the Business

Intelligence (BI) Tool, which monitors data accuracy and completeness of ITMATT (messages to transmit electronic

customs data from origin to destination). IPC completed the tender process for customs tariff code classification

and a landed cost calculator. Five participants in INTERCONNECT subscribed to the service contracted by IPC

with Amber Road, a provider of on-demand global trade management solutions. Other interested posts can also

subscribe to the service at any time.

DELIVERY CHOICE

As part of INTERCONNECT, the Delivery Choice solution will enable e-customers to

opt for the same delivery options for cross-border online purchases as for domestic

purchases, such as delivery in a parcel locker, at a post office, at a shop, etc.

As opposed to a traditional doorstep delivery, customers can determine where

and when to collect their purchases by choosing from a full range of locations

either provided at the e-retailer’s website – at Point Of Purchase (POP) – or by

the destination post via e-notification – at a Point In the Pipeline (PIP).

To support posts with the implementation of the Delivery Choice solution, IPC

developed the Translation Engine (TE), a tool that facilitates access to delivery

location data in multiple countries. The tool enables XML requests for delivery

points and redirects these requests to the correct data source. The data source

can be either a remote web service owned by the inbound post or an internal

database hosted at IPC referred to as the Translation Engine Light (TE Light).

Currently the TE provides access to collection points in 13 countries – nine using

the full version and four using the Light version.

DELIVERY OPTIONS:

ANNUAL REVIEW 2015

37

RETURNS

IPC’s Common Returns Platform (CRP) enables posts to offer distance sellers a

priority postage-paid international return service for their customers.

The service allows authorised returns to be accepted at postal counters without

payment, and then returned through the postal network to the e-seller which

authorised the return.

The aim of the solution is to support the growth on e-Commerce, ensuring

customers are allowed to return ‘unwanted goods’, increase parcel volume,

and avoid over-labelling costs for postal operators, without any operational

changes. The solution has evolved due to market needs and now supports several

international mail networks – EPG, KPG, PRIME, INTERCONNECT and UPU

parcels.

In 2015, the return solution reached the milestone of 2m returned items.

During 2015, IPC explored the addition of new functionalities to the platform,

such as a pick-up option, a single label concept, consignment consolidation.

Some of these functionalities will be available in 2016.

CUSTOMER SERVICE

IPC’s Global Customer Service System (GCSS) is a unique platform in

the postal industry which allows customer service call centres worldwide to

exchange customer queries about barcoded items. Although already rolled out

across the world, five additional posts have signed up to the service, bringing

the total number of connected posts to 182, operating around 275 call centres.

As a last phase in the overall migration to GCSS, the customer service for

the UPU Parcels Group – the Internet Based Inquiry System or IBIS – was

successfully migrated to GCSS in February 2015.

In 2015, IPC defined a number of simplified customer service procedures for

INTERCONNECT, in collaboration with its members. Based on a pro-active

approach and the use of electronic documentation, these procedures help

reducing the resolution time of enquiries and improve customer satisfaction. The

procedures, together with other customer service-related material, have been put

online in the INTERCONNECT Customer Service content management system.

2MITEMS RETURNED BY Q3 2015

10AUTHORISING POSTS

30ACCEPTING POSTS

182POSTS USING THE GCSS

275CALL CENTRES CONNECTED


38

To further support INTERCONNECT, three new modules were developed: Standard Packets, Standard Parcels

and Premium. The new modules were developed with a multi-view screen, which allows customer service agents

to view all enquiries, regardless of which service or module is being used, in one screen. With INTERCONNECT

being gradually implemented throughout 2016, the GCSS team will continue to provide support around workflow

adherence, ensure correct application of the new procedures and monitor compliance.

A set of consolidated KPIs – mainly around pro-activity, enquiry duration, and quality of requests and replies –

has been agreed upon by the INTERCONNECT members. With the inclusion of these KPIs in the IPC Business

Intelligence Tool, customer service managers now have the possibility to follow their performance and immediately

act in case of problems.

ANNUAL REVIEW 2015

39

OPERATIONAL SOLUTIONSIPC provides technological and cooperative solutions that enable its member postal

operators to achieve common goals and meet commercial needs. IPC is supporting

postal operators to improve the quality of service and perform consistently against a

wide range of industry standards which demonstrate the value of the postal network.


40

IPC’S OPERATIONAL SERVICES5.1

IPC manages several solutions directly aimed at improving interoperability between posts and the quality of postal

operations, as well as the delivery of actual operational services, Tray and Bag Pools and the Sprinter transport

network. IPC manages these services centrally and monitors them closely via the CAPE Vision tool, IPC’s main

technical platform providing near real-time postal operations data used for monitoring, planning and analysis of mail

exchanges for all postal products. The tool has dedicated modules for each service. This ensures that the equipment

and the vehicles are used in the most efficient ways to help members manage postal traffic.

SPRINTER

Sprinter is a road transport network with nine posts. The network provides road transport

at the best fares on the market and ensures a high quality of service. Sprinter is centrally

managed and monitored by IPC.

Transponders attached to the vehicles transmit tracking data, which is detected by IPC’s

RFID network at each office of exchange. IPC feeds tracking events into CAPE Vision, which

allows to assess performance and to report back to participating postal operators.

On average throughout the year, a total of 40 tonnes of mail was transported per week.

IPC BAG POOL

The IPC Bag Pool is a shared pool of a standard, long-lasting and environmentally friendly

mail bags to be used for international priority letter mail.

Over the years, it has brought multiple benefits to the Bag Pool members in terms of

standardised operations, cost savings and environment protection. Since it is a standard mail

bag exchanged amongst many members, it streamlines operations as it enables the members

to reuse inbound bags for their outbound production. Moreover, having a single mail bag

shared by many reduces the total number of bags purchased and reduces significantly the

amount of bag repatriations between sending and receiving members, and thereby the costs

and adverse environmental impact for transport of empty bags.

The total Bag Pool stock consists of 100,000 bags. The number of bags exchanged during

the full year 2015 remains stable at 1m.

100,000BAGS IN POOL

1MTIMES BAGS WERE EXCHANGED

40TONNES OF MAIL TRANSPORTED PER WEEK THROUGH THE SPRINTER NETWORK

ANNUAL REVIEW 2015

41

IPC TRAY POOL

The IPC Tray Pool is a shared pool of standard and durable plastic trays that leading postal

operators use to transport international letter mail.

By using a common type of equipment pool members get multiple benefits from standardised

processes and interoperability. The Tray Pool is centrally managed by IPC, thus allowing a

proper balance of the stocks for all members. The IPC Tray Pool solution also shows great

durability. The number of damaged trays remains at an extremely low level due to the high quality

of the tray: less than 0.2% of the trays have been removed from the network for recycling since

the start of the Tray Pool in 2001.

The total Pool stock consists of roughly 460,000 trays. The number of trays exchanged in

2015 decreased from 5.5m to 5m, reflecting the decrease in letter mail volumes.

IPC PALLET BOX

In 2015, IPC prepared for the 2016 launch of the new IPC Pallet Box. This operational solution will be managed by

IPC, which allows for a more efficient use of cross-border road transport through minimising equipment tare weight

and maximising use of the load capacity.

The IPC Pallet Box has been designed to be 100% recyclable, environmentally friendly, durable, lightweight and

weather and chemical resistant. Stacking allows the fullest volume exploitation across operations, especially lorry

cargo space and load capacity utilisation, but also storage floor area during pre-transport staging and receipt at

destination offices of exchange.

As a cost-effective re-usable transit packaging (RTP) solution, IPC Pallet Boxes are both collapsible and have a very

low tare weight, offering many advantages to the repatriation processes and with storage between uses.

460,000TRAYS IN POOL

5MTIMES TRAYS WERE EXCHANGED


42

POST–CARRIER INTEGRATION5.2

FUTURE OF MAIL BY AIR (FOMBA)

To respond to changes in the mail and airline industry and address market and regulatory demands, IPC launched

its Future of Mail by Air (FoMbA) initiative at the end of 2005. FoMbA aims at improving the customer-supplier

relationship between postal operators and air carriers to eventually lead into a business partnership, improving

the accountability and visibility of mail in transport. By taking these measures, FoMbA intends to reduce operating

costs through process optimisation and standardisation. The key priorities are space allocation, electronic proof of

custody and delivery, data capturing efficiencies and accuracy, standard operating and messaging procedures and

electronic settlement.

In 2015, FoMbA started a comprehensive analysis of the elements that make up the key electronic data interchange

(EDI) messages between posts and carriers. EDI is a method used for transferring data between different systems

or networks; in the postal industry EDI standards and technology are being used to increase end-to-end visibility,

reduce costs and promote efficiencies. By completing this effort the group set up a standard approach that will help

both posts and carriers better interpret the information exchanged in order to further optimise their operations.

FoMbA also focused on enhancing the Consignment Monitoring reporting tools: IPC posts now have access to much

more detailed analysis of the performance of the transport leg, which is a key aspect contributing to the end-to-end

delivery performance of e-Commerce items.

FORECASTING, ALLOCATION AND BOOKING

The lack of consignment planning between posts and air carriers causes delays in air transportation of mail, with

posts consigning all they produce to carriers and carriers willing to accept as much traffic as possible from posts

without necessarily having capacity to carry it as planned. This practice results in significant delays in the delivery of

airmail receptacles at destination, with less than half the mail delivered as planned and another seven to eight days

before 98% of receptacles are delivered.

In 2015, IPC collaborated with member posts to develop the future business processes for efficient space allocation

planning, based on reliable accurate capacity forecasting. During the year, IPC and the member posts also reached

an agreement with the air carriers in FoMbA on these business processes. As a result, IPC sent out service proposals

to build an integrated forecasting, allocation and booking solution, referred to as IFABS. Depending on the specific

needs of each post, these modules can be used as separate solution whereas all of them combined provide an end-

to-end integrated solution.

In 2015, ten member posts signed up for the forecasting module which was developed in order to be deployed in the

course of 2016. Interested IPC member posts can sign up for the deployment of the IFABS Route Management and

Allocation modules or subscribe to the IFABS Forecasting solution, which was planned to be operational in 2016.

ANNUAL REVIEW 2015

43

QUALITY AND ASSESSMENT5.3

CERTIFICATION ASSESSMENTS

The IPC Certification of Excellence is an independent process that encourages postal operators to strive for

excellence. Certificates are awarded to qualifying offices of exchange. Assessments focus on the processing of

international priority products. The main criteria for assessment relate to: organisation and resource management;

quality management, EDI message and data compliance and interface relationships with international partners,

carriers and handlers at both the offices of exchange and airmail units.

The following offices of exchange were re-certified: Milan, Helsinki, Amsterdam/Rotterdam, Reykjavik, Lisbon,

Budapest and Athens. Toronto SCLPP received its first Certificate. Pre-re-assessments were organised in

Melbourne, Sydney, JFK, London, Toronto and Vancouver.

PERFORMANCE CENTRE OPERATIONS

The IPC Performance Centre is IPC’s quality monitoring unit. The platform sends performance and diagnostic data

on the quality of service to postal operators, helping them to improve their services or plan for and manage periods

of peak volumes. The Performance Centre monitors quality of service; supports operational improvements; issues

reports; and performs operational surveys.

In 2015, one of the main roles of the Performance Centre was the continued support for letter mail performance.

The main focus in 2015 was on ensuring a high level of quality and providing reliable links with cost-efficient

solutions. The Performance Centre published monthly Performance and Certification Alerts for member posts.

IPC’s member posts also agreed on new targets to ensure a higher quality of service in 2016 for both letters and

letter packets.

The Performance Centre also provided support for the INTERCONNECT network, particularly in the area of

Service Reliability. Data produced by the Performance Centre was used as the basis of Performance Uplift Trackers

(PUT), which use performance data from existing products that mirror INTERCONNECT products in order to

improve service reliability in preparation for the INTERCONNECT launch. The unit also coordinated the monthly

teleconference for member posts focussing on INTERCONNECT performance improvement. In addition, IPC

released monthly reports on end-to-end performance to respond to the needs of INTERCONNECT participants.

The Performance Centre also assisted in creating the business requirements for the INTERCONNECT Business

Intelligence Tool (BI Tool) and provided training the BI Tool’s users. The support provided by the Performance

Centre will continue in 2016.


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TEST MEASUREMENT OF INTERNATIONAL LETTER SERVICE PERFORMANCE WITH UNEX™

The UNEX™ system offers IPC and its customers a wide range of measurement tools to monitor postal quality of

service for cross-border letter mail. UNEX™ offers participating posts a set of modules and measurements that cater

for all user needs: Regulatory (via the CEN module and official annual publication), Operational (letter mail and

untracked packets diagnostic measurements) and Terminal Dues (providing quality of service figures for multilateral

agreements).

For its 37 participating postal operators throughout the world, UNEX™ measured

500,000 test letter items (envelopes and packets) over the course of 2015 using

four contractors who manage around 4,600 volunteers receiving and sending

pre-produced test mail containing an RFID tag.

At the end of 2015, IPC prepared the implementation of the quality of service

measurement required for the INTERCONNECT Remuneration Agreement for

Europe. In addition, the UNEX™ team investigated different options for measuring

postal quality of service using new technologies and methods to aim at an even

more cost-efficient approach in the future. These considerations will strongly

define the quality of service solution envisaged by IPC for the future. In 2016, the

UNEX™ team will further investigate these alternative quality of service methods

and solutions. The team will also focus on fine-tuning the INTERCONNECT

Remuneration Agreement – Europe quality of service measurement.

RELEASE OF UNEX™ 2015 EUROPEAN RESULTS ON INTERNATIONAL MAIL QUALITY OF SERVICE

Quality of letter mail service in Europe continued to exceed both the European

Union’s speed objective of 85% of intra-EU mail delivery within three days of

posting, and its reliability objective of 97% within five days. Performance recorded

by the IPC UNEX™ measurement system in 2015 exceeded, on average, these

objectives for the 18th consecutive year.

In 2015, 89% of international priority and first-class letter mail was delivered

within three days of posting and 97.1% within five days. The average delivery time

was 2.5 days. These results cover a total of 32 countries: the 28 EU member

states together with Iceland, Norway and Switzerland along with Serbia, which re-

joined the measurement in 2015. These European results for 2015 were based on

266,000 test letters of which more than 75% was containing Radio Frequency

Identification (RFID) tags.

500,000TEST LETTERS SENT IN 2015

4,600VOLUNTEER PANELLISTS

89.0%OF MAIL DELIVERED WITHIN THREE DAYS

97.1%OF MAIL DELIVERED WITHIN FIVE DAYS

ANNUAL REVIEW 2015

45

Frank AppelDeutsche Post DHL Chairman of the Management Board and CEO

GERMANY

Georg PölzlÖsterreichische Post AG Chairman and CEO

AUSTRIA

Heikki MalinenPosti President and CEO

FINLAND

Ahmed FahourAustralia Post Managing Director and CEO

AUSTRALIA

Andreas GregoriouCyprus Post Director

CYPRUS

Philippe WahlLe Groupe La Poste Chairman and CEO

FRANCE

Koen Van Gervenbpost Chief Executive Officer

BELGIUM

Deepak ChopraCanada Post President and CEO

CANADA

IPC MEMBERS


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Hakan EricssonPostNord President and Group CEO

SWEDEN & DENMARK

Francisco de LacerdaCTT- Correios de Portugal SA Chairman and CEO

PORTUGAL

Dag MejdellPosten Norge Chief Executive Officer

NORWAY

Javier Cuesta NuinCorreos President and CEO

SPAIN

Claude StrasserPOST Luxembourg Chief Executive Officer

LUXEMBOURG

Donal ConnelAn Post Chief Executive

IRELAND

Brian RocheNew Zealand Post Group Chief Executive

NEW ZEALAND

Francesco CaioPoste Italiane SPA CEO and General Manager

ITALY

Ingimundur SigurpalssonIceland Post General Manager and CEO

ICELAND

Kostis MelachroinosHellenic Post ELTA Chairman and CEO

GREECE

Zsolt SzarkaMagyar Posta RT Chief Executive Officer

HUNGARY

Status at the time of printing (April 2016)

Suzanne RuoffSwiss Post Chief Executive Officer

SWITZERLAND

Herna VerhagenPostNL Chief Executive Officer

NETHERLANDS

Moya GreeneRoyal Mail Group plc Chief Executive

UNITED KINGDOM

Megan J BrennanUnited States Postal Service Postmaster General and CEO

UNITED STATES

ANNUAL REVIEW 2015

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International Post Corporation

Avenue du Bourget 44 1130 Brussels, Belgium

Tel +32 (0)2 724 72 11 Fax +32 (0)2 724 72 32

www.ipc.be [email protected]

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