Kardinal’s revolutionary approach to the postal sector in light of UPU’s 2023 report
- October 17, 2023
- 4 mins
In its latest “State of the Postal Sector 2023” report, the Universal Postal Union talks about artificial intelligence (AI) and the dawn of hyper-collaboration in the postal sector. It highlights a number of use cases that are crucial for postal operators, yet often go unapplied. Thanks to its cutting-edge technology, Kardinal meets these challenges identified by the UPU. Let’s discover how!
The power of AI and hyper-collaboration highlighted by UPU’s "State of the Postal Sector" report
The report underscores AI’s potential as a transformative solution in the postal sector, enabling intensive collaboration among international postal services through data, information, and best practice sharing. This collaboration aims to address imbalances in national and international postal development, ensuring that historically less developed regions can benefit from the digital revolution.
The concept of “hyper-collaboration” is defined as deep, extensive, and multidimensional collaboration among diverse stakeholders from various industries, disciplines, countries, maturity levels, and even cultural backgrounds. Digital tools such as online platforms, real-time communication tools, and advanced data-sharing mechanisms facilitate this hyper-collaboration by overcoming geographical and temporal barriers.
The report emphasizes the crucial role of AI in enabling this hyper-collaboration by automating routine tasks, providing predictive insights, and seamlessly integrating data from various sources. This combination of AI and hyper-collaboration accelerates innovation, reduces costs through resource sharing, and creates new economic opportunities.
Furthermore, the report highlights the urgent need for new collective problem-solving solutions in the international postal sector, particularly concerning challenges related to pricing, delivery reliability, customs security, economic and environmental sustainability, and disparities among national postal services. It also points out the negative impact of inefficiencies in fragmented postal and logistics systems on the global customer experience. The absence of solutions could jeopardize the relevance of the postal sector in the global economy.
To illustrate this topic, the report presents 3 use cases where artificial intelligence can revolutionize the global postal network. After 7 years of R&D and numerous exchanges with postal and parcel delivery operators, Kardinal has developed solutions that meet the challenges identified by the UPU.
Use cases for a new generation of hyper-collaborative international postal institutions
Use case 1: Eliminating operational inefficiencies
What the UPU recommends
This section explores how artificial intelligence can improve the efficiency of international postal services. Rising international postal rates since 2018 have impacted demand. Integrating AI-driven cost optimization processes can address these challenges.
AI can play a crucial role in not only rectifying operational inefficiencies but also preventing a significant increase in international postal rates. AI’s strength lies in its ability to conduct detailed microeconomic evaluations, allowing it to cluster postal routes based on their profitability dynamics. By analyzing data and identifying patterns, AI can bundle routes strategically, even those that may seem unprofitable individually, to create a collective positive profit margin. This approach could redefine dynamic pricing in international postal services. Hyper-collaboration amplifies AI’s potential by enriching the global data pool for analysis.
Kardinal’s technology for more profitable routes
Kardinal’s solution empowers postal and parcel operators to assess and enhance the performance of their last-mile network. Operators can utilize the platform to gain insights into their operations, identify the weak points and unprofitable areas. Leveraging advanced mathematical algorithms, the solution calculates the optimal territory organization and identifies the most efficient routes possible.
Our partnership with Open Pricer, provider of the leading pricing management and optimization platform for the logistics industry, aims to transform parcel pricing and margins optimization for postal and parcel carriers.
Kardinal’s data, which encompasses metrics like capacity utilization, delivery zip codes, and day-of-week variations, empowers Open Pricer to refine its cost modeling and provide more precise pricing calculations. This is a significant improvement because last-mile delivery costs are typically estimated using averages, which may not accurately reflect real-world conditions. This is especially critical considering the substantial expenses associated with the last-mile delivery phase. This enhanced precision enables carriers to establish pricing with greater accuracy, particularly when dealing with major retailers or adjusting rates for existing customers.
Furthermore, this partnership unlocks opportunities for dynamic pricing strategies, allowing carriers to offer tailored rates based on customer zip codes and delivery dates. With access to Kardinal’s data, Open Pricer can offer dynamic pricing to its clients, enhancing the profitability of deliveries, especially in rural areas, and optimizing volume distribution. For instance, they can incentivize shipments during low-volume periods by offering more appealing prices.
More information about our territory optimization solution.
Use case 2: Truly predictable international postal delivery services
What the UPU recommends
This section discusses the decline in the reliability of international postal services during the COVID-19 pandemic and the need to rebuild trust while meeting evolving customer expectations. To achieve dependable international postal delivery, accurate forecasting of postal volumes and resource availability is crucial. This challenge can only be addressed through advanced AI algorithms and extensive data sharing among all parties involved.
This approach offers benefits such as optimized resource allocation, enhanced service consistency, and resilience against unforeseen challenges. It also has potential environmental benefits by optimizing routes and reducing CO2 emissions. Moreover, AI can predict potential delays, allowing real-time decision-making, and improve capacity management. When combined with the first use case, these developments enhance economic and environmental sustainability of international postal networks.
Kardinal’s solution for better resource allocation
Based on historical data, considering operational constraints, Kardinal’s innovative dispatch intelligence technology will recommend the optimal territory organization for any geographical area and allow depot managers to optimally allocate resources and anticipate activity changes. This could include fluctuations in parcel volumes, seasonal variations, or unexpected events like traffic disruptions. Anticipating these changes allows postal and parcel operators to proactively adjust their operations to maintain efficiency and service quality.
The algorithms combine advanced mathematical optimization and Machine Learning techniques to accurately size the delivery areas in a sustainable way. This technology is at the heart of Kardinal’s solution, enabling it to process large volumes of data and make sophisticated predictions and recommendations. It continuously learns from new data inputs, improving its recommendations over time.
Unlike traditional route planning systems that are static and inflexible, Kardinal’s solution is dynamic and operates in real-time. It constantly evaluates and reevaluates routes, taking into account a wide range of factors that can impact delivery efficiency. When unexpected events occur in the field, such as traffic congestion, road closures, or adverse weather conditions, the system can quickly recalculate routes to avoid these hazards. This dynamic adjustment ensures that deliveries stay on track and that customers receive their parcels on time, even in the face of unforeseen challenges.
Kardinal’s system doesn’t stop at real-time adjustments; it also learns and improves over time. It continuously collects data from the field, including information on delivery times, driver behavior, and traffic conditions. This wealth of data is then analyzed and used to fine-tune future optimization efforts. By leveraging field data, Kardinal’s system becomes increasingly accurate and efficient, helping postal and parcel operators make data-driven decisions and continually enhance their delivery operations.
More information about our route optimization solution.
Use case 3: Monetizing global postal decarbonization efforts
What the UPU recommends
This use case addresses the challenge of reducing CO2 emissions in the postal industry while handling the surge in parcel volumes. Despite efforts to adopt cleaner energy sources and climate change mitigation measures, only a few UPU member countries have achieved decoupling emissions from parcel growth.
The proposal involves leveraging AI to accurately measure emission reductions, enabling postal operators to accumulate and trade carbon credits on transparent platforms using blockchain or other decentralized technologies.
Kardinal’s solution for greener fleets
Postal and parcel delivery operators are increasingly focused on reducing their environmental impact. However, they aim to strike a balance between meeting delivery demands and minimizing their carbon footprint. In their quest for greener operations, carriers are exploring alternative vehicle options, such as electric delivery vans and cargo bikes, that come with unique operational constraints. Carriers need to assess how these new vehicle types fit into their existing operations.
Kardinal’s technology provides carriers with a powerful tool to analyze and optimize their fleet mix. The solution helps operators determine the ideal combination of vehicles for each area, ensuring that the fleet is both environmentally responsible and operationally efficient. Kardinal’s simulation capabilities allow carriers to experiment with different fleet configurations. This means they can assess the impact of transitioning to greener vehicles, such as electric vans or cargo bikes, before making a commitment. By running simulations, carriers can understand how such conversions would affect their operations, including costs, CO2 emissions, and overall efficiency. Operators can assess the operational costs associated with different fleet scenarios, gaining insights into potential savings. Additionally, they can estimate the environmental benefits in terms of reduced CO2 emissions. Organizational impacts, such as changes in working time and route reliability, are also considered, ensuring that any fleet changes align with the carrier’s broader business goals.
More information about fleet conversion.
In conclusion, the “State of the Postal Sector 2023” report by the Universal Postal Union illuminates the transformative potential of artificial intelligence (AI) and hyper-collaboration in the postal sector. It underscores the urgent need for innovative solutions to address challenges ranging from operational inefficiencies to environmental sustainability. Kardinal, with its cutting-edge technology, stands ready to meet these challenges, offering the postal industry a path forward towards greater efficiency, reliability, and sustainability. As the postal sector embraces AI and collaboration, it has the opportunity to lead the way in harmonizing sustainability and profitability, setting an example for industries worldwide.
