Joint production in the delivery market: Letter networks with parcels or parcel networks with letters? Cost savings and securing quality of universal services due to joint delivery of letters and parcels
The postal markets are undergoing a profound structural change, both nationally and internationally. Digitilisation is changing the forms of communication between consumers, companies and government institutions. As a result, letter volumes have been falling for years, not only in Germany but worldwide. At the same time, the strong growth in e-commerce is leading to an increase of consignments to consumers.
The discussion paper presents the results of a benchmark analysis among seven national postal operators. Overall, the postal companies are striving to exploit the advantages of an existing, nationwide letter delivery network for the delivery of merchandise and to use delivery capacities that have become available due to the decline in letter volumes. In addition, postal operators put significant efforts to organise the last mile in a more flexible and, for letter post and packages, more permeable way in order to better cope with the considerable fluctuations in demand for the delivery of merchandise to consumers.
In a model simulation, the study shows that joint delivery leads to cost savings compared to separate delivery networks. It is expected that Deutsche Post will continue to pursue this strategy in the coming years. Among other things, this strategy helps to secure the quality level in the universal postal service, especially in rural areas.