To door or not to door, that is the question

Posti is moving fast to roll out Europe’s densest parcel locker network. Ian Kerr (Postal Hub Podcast) and Marek Różycki (Last Mile Experts) dissect how Posti is combining network density with fast delivery to provide improved levels of customer experience

Finnish postal operator Posti plans to deliver more parcels to lockers instead of residential addresses. Lockers have proved to be operationally effective and offer great customer experience when used well.

Posti says it has the densest network of automated parcel machines (APM) in Europe, with another 500 coming into service this year, to make a total of 1,500 by the end of 2019. Currently Posti has one APM per 5,000 inhabitants. By the end of 2019, the density would have increased such that there will be one APM for less than 4,000 inhabitants.

In other words, more customers will have parcel lockers close to their homes, making delivery to parcel lockers even more attractive and convenient.

While this is a carrier-specific parcel locker network, Posti is moving fast to grow its network. Proximity is essential for the success of a parcel locker network.

Growing volumes and speedy delivery
The volume of parcels going to Posti’s lockers is already on the rise: in 2018, the number of parcels delivered to parcel lockers increased 22% over the previous year. This trend may be expected to continue as new lockers are added.

Speed is also a crucial element of Posti’s plan to leverage its parcel locker network. A successful first-time delivery to a parcel locker is better for the customer than a failed delivery attempt at home, requiring a trip to a post office the following day to collect their parcel. Locker first-time delivery success is virtually 100%; the only delivery failures are when the consignee can’t collect (through absence for example), or related to payment after receipt goods that were ‘push sold’ in.

The customer experience is augmented in the municipality of Turku in Finland, where Posti is enabling same-day e-commerce deliveries via its Fast Track service. This follows the roll-out of same-day delivery in Helsinki in 2018. Fast Track is available Monday to Saturday. Parcels will be delivered to the recipient’s home between 6:00pm and 8:00pm, and to the Posti parcel lockers located in supermarkets and shopping centers by 7:00pm.

In its quest for speed, Posti is also trialling a new system introduced in its sorting center and transportation terminals in the Turku municipality that enables manual work to be digitized. The new parcel distribution management system enables more efficient distribution to all Posti pick-up points, while making parcels easier to track.

In practice, the system will automatically allocate parcels to a parcel locker or PUDO point, depending on locker availability and proximity to the customer. The aim is to minimize the distance consumers have to travel to collect their parcels. Customers can also nominate their preferred pick-up point (for example a parcel locker near their office) via the OmaPosti app, putting the customer in control.

Other out-of-home delivery options
The parcel locker network is complemented by the post office network. Customers can select to have their e-commerce purchases delivered straight to the post office – without a home delivery attempt. This adds up to an improved customer experience, because the customer is in control of their deliveries.

Posti has also incorporated parcel lockers into an automated post office. When Posti couldn’t find a partner to operate one particular suburban post office, it installed a range of automated options – including parcel lockers – in place of a staffed post office. This maintained the reach of the post office network, as well as offering locals a new parcel delivery option.

Ultimately the customer is the winner
Against a background of falling letter volumes, the team at Posti is putting a big emphasis on out-of-home delivery, including parcel lockers, enabling fast first-time parcel delivery. This is operationally efficient and can lead to a better customer experience in terms of choice and cost.

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