Jersey Post’s Managing Director of logistics and postal services tells Channel Eye how the business is adapting to the changes brought by falling letter volumes.
The internet has been both a blessing and a curse for the post office. Since the advent of the internet and email became our primary means of written communication, it’s meant seismic global change for the industry.
For Niall McClure, Managing Director of logistics and postal services at Jersey Post, that change has also been accelerated by Covid.
A new business landscape
Jersey Post is undergoing big changes, just like every other country’s mail provider. It’s had to re-think and change what it does to focus less on letter mail deliveries and more on parcels as our shopping habits have also altered. We’re buying online more than ever before thanks to the global marketplace opening up, giving us the ability to shop for whatever our hearts desire in our PJs at 3am, if we wish.
Niall McClure’s challenge is to enable our demands so when we order something to arrive asap, it does exactly that. For a man who doesn’t have a postal background, it’s been a refreshing change to his previous roles.
“I’m actually a chartered surveyor,” he tells me cheerily as we talk over Zoom one blisteringly hot day in August.
Through what he describes as ‘a convoluted route in facilities management, he came to the attention of Jersey Post’s Chief Exec Tim Brown who offered him the role precisely because he didn’t have a background in the industry.
“He thought I would come with no baggage, I’d have fresh eyes, and ask daft questions and challenge things, which is what I’ve been able to do.
“The first two weeks, after doing a lot of pre-reading, I was thinking what on earth have I got myself into because it was so different. But fundamentally there are the same issues in any company, you’ve got staff to engage with, ways of doing things that have been done forever to deal with. We’ve been working our way forward, asking challenging questions and trying to shake things up.”
Speeding up amid a global slowdown
As we’ve already seen, Jersey Post’s no different to any other postal business in the world. Letter volumes are in decline while the business is now dealing with far more parcels than ever before. But then Covid-19 came along and hit the fast forward button.
“What’s happened with Covid is that we think we’ve seen five years of change happen in three months.
“Letter volumes have now declined by 25-28% and we don’t think that’s going to recover and parcel volumes are up 30-35% now.
That jumped to what we call Christmas peak volumes in March and it hasn’t stopped.”
Niall says the word from companies like Amazon is that there’s also going to be a Christmas peak on top of that so even higher parcel volumes are imminent.
Speaking of Amazon, it and other internet businesses have also dealt with an enormous increase in customer demand.
“We have got a fairly healthy bunch of people here in Jersey who are Amazon resellers. They adapted and worked out how to capitalise on the system so they were further up the pecking order and their volumes have gone up as well. There’s one business here who are worldwide top 500 Amazon reseller, which is no mean feat for someone based in Jersey.”
While Covid-19 meant a general slowing of business, it didn’t stop customers wanting to buy online and this has created another headache for Jersey Post.
“Generally, worldwide everything has slowed down because all the passenger planes stopped flying and a lot of mail goes on passenger planes and even freight liners weren’t flying either so that slowed everything up and is still an issue.”
There’s also pricing issues to factor in, with some countries imposing surcharges on goods.
“Twice a week we get an update on which countries have got embargoes altogether or which countries have surcharges. That changes every week so that’s tricky for the logistics people to keep tabs on and get that information back out to customers.
“Because if a surcharge is suddenly slapped onto a country we’ve got to tell the e-tailers so they can decide if they can absorb that cost or pass it on or stop selling there until it readjusts.”
Jersey loves to shop
He first became aware of the ever-growing tsunami of deliveries back at the start of lockdown.
“I think Easter weekend was the one. Jersey shopped online over Easter weekend and we had the bough wave of that the week after. That’s continued. People are continuing to buy online and it’s got to be delivered and so we’re happy to be doing that.
“We’ve taken a strategic decision at board level so yes, we’re the licensed postal operator but we’re also a parcel business that happens to deliver letter mail as well. We probably generate four times as much revenue from parcel moving than we do from letter movement.”
He says Covid-19 has simply accelerated plans they knew they’d have to put into action anyway, albeit far more speedily.
“Our view is that the change to volumes and product mix would have taken five years and it’s accelerated in three months because of the pandemic. We’ve had to adapt really quite quickly which we’ve been able to do because people have just stepped up. There’s been proper team spirit, they have helped each other out. They’ve been determined to fulfil the service.
“When the evening shift is on and the boat’s late and there’s loads of parcels coming in, they will stay on until after 10pm just to get it done, including the volunteers. I’m very proud of them, it’s been something to observe.”
All of this means big changes within Jersey Post, from adjusting start and finish times, the way in which the sorting office is laid out, the sorting equipment and the delivery vehicles.
“All that has to adapt to reflect the fact that we’re a parcel business. That’s not to belittle letter mail because it’s still very important but it has tailed off and we can’t see it recovering.”
It also means making changes to the people who work within the business.
“We need fewer people who can learn how to do a letter round, we need people who can effectively and efficiently deliver parcels and it’s the number of parcels that you can drop in a day that becomes important.
“It happened to us and we’ve been able to adapt to it and we’re now ahead of the game in terms of we’re able to do proper planning and we’re able to think about how we need to go forward.”
In Friday’s ChannelEye, Niall tells Channel Eye how the team at Jersey Post adapted to life under the shadow of Covid-19.
