Bermuda Post’s decision to expand its international mail service should not have come as a surprise. After all, his 2020 business plan was announced in the House of Assembly a year ago and one of the deliverables was the package delivery partnerships.
In my last opinion, “whether to privatize or not”, I said that public transport should remain a public service because of the positive benefits which also align with the current challenges and objectives of the country. That is, to help reduce traffic jams, reduce the number of traffic accidents, protect the environment and reduce the cost of living.
While there is a good argument to be made for maintaining and even expanding Bermuda’s public transport services, I don’t see a similar path for the post office. In this context, I question the government’s strategy of increasing competition and causing friction with one of its main job-creating players.
Malcolm Raynor has worked in the telecommunications industry in Bermuda for over 30 years. Benefiting from Cable & Wireless internal training and education programs in Bermuda, Barbados, Saint Lucia (University of the West Indies) and Great Britain, he has reached the level of Senior Vice President. Independent thinker with a moderate ideology, his opinions are influenced by principles, data and trends
When unveiling the 2020 business plan, it was misleading for the minister to say: “The Bermuda Post value chain, compared to its competitors, relies heavily on its competitive prices.” While competition is healthy in a market to control prices and rates, is it a fair fight for a government institution that operates at a large loss to take on private companies that have to operate at a profit to maintain itself?
I am aware of the decline of the traditional economic model of the Post, and I understand that the goal is to make more income to reduce its deficit. However, at what cost? There is now no more love between the government and the e-commerce packaging industry. Whatever relationship there was, it’s definitely worse now.
More importantly, trust within the entire retail sector is broken, as overseas purchases are openly encouraged by a government which should instead provide economic security and assistance to businesses operating in the United States. the island.
This situation reminds me of a video that had previously gone viral on social media. It featured two gazelles locking horns and fighting against each other, arguing over what I suppose is territory. The two perceived enemies were so busy and focused on their disagreement that they didn’t notice a real threat looming on the horizon. Frame by frame of the video, there was danger running towards them. Gazelle spectators quickly left, as soon as it became apparent that a lion was coming to join the fray, hoping to have a five-course meal. The two in conflict continued to fight, and unfortunately for one of the gazelles, the lion got her wish.
The two gazelles fighting for the territory recall the Post Office and the local e-commerce packaging company. The lion, who is the king of the jungle, is Amazon, and that is the real danger to the courier industry in Bermuda, as well as the local retail industry as a whole.
Many of us are aware that Amazon has devoured its competition in its own home market in the United States and is the # 1 overseas retailer Bermuda and residents use when shopping. in line. What many ignore is Amazon Air, which has been the fastest growing airline to date.
Amazon Air is a cargo airline that operates exclusively for the transport of Amazon packages. It leases most of its cargo planes, but recently added to its fleet by purchasing used Boeing jets from other airlines. The number of planes at Amazon Air is expected to double in size over the past year, taking full advantage of the pandemic and the challenges it has faced for airlines. Amazon clearly has the ambition to build its own air cargo empire.
How will it be for Bermuda, who knows. Our small market may not be feasible for Amazon to fly its own plane to the island. However, one cannot rule out the possibility. Amazon’s goal is for customers to sign up for its Prime service, as this is a key factor in its long-term success. In order to be able to offer Amazon Prime, there must be a fast delivery option, which is usually two days. The only way to do this is to use your own plane. Like the lion in search of his next meal, Amazon is a beast, and he wants his brand to stay sticky to keep customers buying his products.
One of the stated goals of the Bermuda Post Office is to position itself to provide services to businesses large and small. It remains to be seen whether its initiatives, which are outlined in the Business Plan 2020, will be affected by the decision to promote online shopping abroad.
To achieve the Post’s overall goal of increasing revenue, the focus should have been on its strength – last mile services. I have a few suggestions that could have been explored as well, that wouldn’t have ruffled anyone.
Work with e-commerce packaging companies, not against them
Instead of intensifying competition with local businesses in this sector, La Poste could position itself as the last mile delivery person and complement them, whether it is hand delivery or pickup in the store. one of its post offices across the island. . This logistics program could then be used as a last mile deliverer for goods purchased online from local retail businesses, which have plenty of room to grow.
Direct mail is not dead
In fact, direct mail is making a comeback. The more online ads appear on all social media platforms, the harder it is for businesses to get their message across to consumers. Direct mail now has a better response rate than online ads and email campaigns as people are increasingly overwhelmed by digital marketing.
There are only a few retail businesses on the island that periodically use direct mail flyers to advertise their products. I don’t know the reasons for the low turnout. However, this looks like an opportunity to create an island-wide or parish-wide bi-weekly or monthly flyer delivery service to accommodate small businesses.
Create your own digital platform
La Poste must expand its last mile distribution by asserting itself in the digital space. Emails are less and less secure and it is very easy to create bogus and fraudulent messages. By creating a digital platform that requires a secure two-step login, all government bills and important notices could be posted for retrieval instead of sending regular email correspondence.
Privatize a service
As the Post moves towards parcel delivery, the service that should eventually be entrusted to individuals is the sale of stamps to the public. It would not be revolutionary, because other countries are already using this type of model. This would help reduce the overhead costs of a declining service while not affecting our obligation to provide accessible and affordable means of communication.
Kudos to the post office for creating a plan that will shape it for the future. It was good to involve a reputable company like KPMG, although it seemed to me that its scope was a bit narrow. That said, it was a misstep for the Post to establish its own link with a US-based courier provider, creating mistrust within the business community in the process.
I don’t know if Amazon is becoming more of a threat to local retailers. Amazon has a habit of eliminating its competitors and removing middlemen from its supply chain.
The MyBermudaPost service is myopic and makes the challenges that local retailers face in operating their businesses on the island even more difficult. It’s important to remember that overseas online retailers do not employ Bermudians, support other local businesses, and pay salaries and other government taxes. It is not a focus on the big picture.
• Malcolm Raynor has worked in the telecommunications industry in Bermuda for over 30 years. Benefiting from Cable & Wireless internal training and education programs in Bermuda, Barbados, Saint Lucia (University of the West Indies) and Great Britain, he has reached the level of Senior Vice President. Independent thinker with a moderate ideology, his opinions are influenced by principles, data and trends