As Singapore Post looks to expand its horizons and reverse a decline in international parcel and postal volumes, Hazel King speaks to its newly appointed CEO of international business, Li Yu, about his ambitious plans for a brighter, greener future
In the year ending March 31, 2022, Singapore Post (SingPost) saw revenue jump by 18.6% to S$1.67bn (US$1.1bn), with domestic e-commerce volumes growing by 24% over the previous year. However, international parcel and postal volumes declined during the same period – something SingPost is hoping to rectify with the appointment of Li Yu as CEO of international business.
Having taken the helm in September 2022, Yu is charged with “establishing long- and short-term business strategies for SingPost’s international business unit, strengthening its corporate and board governance, and focusing on transformational growth, operational excellence and sustainability.”
“I believe that there are boundaries we have yet to explore and new opportunities to grow the business internationally,” he says. “I have a strong team that I cannot wait to collaborate more closely with to break new ground.”
The postal operator has seen a big jump in revenue from the logistics sector in recent years – 61.6% in the year to March 2022 – and this will be a focus area for international operations, although it is not without its challenges. “E-commerce growth and markets beyond the shores of Singapore are very attractive to us in growing our end-to-end e-commerce logistics solutions offerings,” Yu comments.
“However, with the recent developments around the world, costs of doing business across borders have skyrocketed as air cargo capacities have been impaired. On the postal network front, terminal dues are eroding profits and inflating costs, making the business environment very challenging. The situation is beginning to ease but it will take a while before things get better.”
Yu plans to capitalize on SingPost’s advantageous position of being able to “leverage both an extensive postal network as well as wide commercial networks” to access 220 markets around the globe and grow its international offering, “helping businesses go global, expand their footprint and grow their business.”
Technology will play a key role in this development, helping the post meet growing customer demands for “quick, fuss-free services and, most importantly, trackability of their shipments.” Yu continues, “From our end, we want to ensure that the customer’s experience is great and satisfaction levels are met. This is imperative in building customer loyalty and advocacy. Technology will be one of the best tools in meeting these demands and creating a steady stream of return customers.
“We also need to leverage algorithms and data to develop strategies that can provide customers with more information. This can help in raising customer satisfaction and enhancing customers’ overall experience.”
Focus on sustainability
While growth is a clear objective for Yu, ensuring that SingPost’s international operations meet its overall sustainability targets is also high on the agenda. “Sustainability is here to stay, and also the way to remain in business for a long time,” Yu says. “SingPost is committed to its purpose of making every delivery count for people and the planet, and we are making positive changes by focusing on environmental and social responsibility in our business operations.
“We are exploring a range of decarbonization pathways for different markets across operations globally.
There is another target that we are committed to and that is to increase our operational recycling rate to
30% by 2025.
“We will be adopting recommendations of the TCFD [Task Force on Climate-related Financial Disclosures] to encourage companies to assess the financial impact of climate-related risks and opportunities. We have also started looking into partnerships with key players in the ecosystem – the aviation sector, technology innovators, financial institutions, vendors and research groups,” he continues.
Yu believes that operating a sustainable supply chain is about more than just ‘going green’. “It can be the difference between a business succeeding or failing,” he explains. But it can be challenging to align sustainability targets with operational needs. “Operationally, the cost of meeting our sustainability targets is one of our biggest roadblocks. In the current business climate, where we are already seeing rising costs for our operations, the cost of keeping operations sustainable and environmentally friendly is even higher.
“As we work with different partners across the sectors, there may be a lack of alignment in terms of sustainability frameworks and the way of conducting business. Players in the supply chain rely on one another in the ecosystem, so there is a need for alignment to maintain sustainability-related policies and procedures. This is challenging as different players may have hurdles of their own when it comes to sustainability matters. Mindsets also need to shift with this new way of operating businesses. Organizations can implement new policies for their people to follow, but fundamentally, mindsets need to change toward adopting sustainability as the way forward. This shift in mindset will take time.”
While sustainability may be a longer-term goal, addressing the immediate challenges of ever-falling traditional mail volumes and rising terminal dues costs is imperative for Yu. “Postal organizations must now cater to the booming e-commerce volumes that have replaced traditional mail,” he says. “Postal services were built to handle flat mail, but with the profile of mail items changing it is vital that postal players evolve and redesign their operations to process bigger items. This way, they can capitalize on the burgeoning e-commerce volumes around the world.
“Managing operating costs is a challenge to all businesses, and in addition to cost cutting, another strategy is to grow revenue. There is a limit to cost cutting, but there isn’t for increasing profits. Striving to grow the business, venturing into new borders and seeking collaborations with industry partners can bring vast growth opportunities.”
One of the biggest things Yu hopes to achieve in his new role is to “encourage a more progressive culture” so that his staff are always thinking outside the box in their areas of expertise. “This is so that
we can investigate new waters, find new opportunities and achieve breakthroughs within the sector,” he says. “We are facing a lot of challenges, changes and even the digitization of a traditional sector. Many things that we used to do may not work anymore, so we must develop new ways
of doing business to progress.”
This interview was originally published in the December 2022 issue of Parcel and Postal Technology International