Focus on Postal Applications
RFID is being introduced in postal applications all over the world, creating new ways of delivering mail - and value - in a historically costly national process
by David C. Wyld, Southeastern Louisiana University
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Going postal
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nywhere you go on the planet, from New York to New Zealand, the most routinized, bureaucratized, unionized, and much maligned government outpost is usually the post office. There are “urban legends” about the postal service that are often incredible, and true, which comedians have used to mercilessly ridicule the post office. Stories range from government checks that take years to arrive, to postcards from World War II soldiers finally being delivered 60 years after they were sent. Since the days of the Pony Express in the American West to the introduction of air mail in Europe, postal systems have consistently found new ways of delivering mail in a faster and better, but not necessarily cheaper, way. Indeed, the business of moving letters and parcels from a sender to a receiver has remained a very manual, labor-intensive operation.
New challenges for postal authorities Today, as never before, national postal systems are facing unprecedented technological, competitive, logistical and political challenges. The postal agencies are facing what has been aptly described as nothing less than a “new order.” Across the industrialized world, postal systems historically enjoyed growing mail volumes as their economies and populations grew. Today however, postal authorities are contending with the fact that total mail volumes that have remained flat over the past decade. Even worse, the “mail mix” has changed, as the trend has been for declines in first-class mail, or the “normal” letter mail service in a given country, and a growth in so-called “junk” or “bulk” mail, which represents a less profitable class of service to the postal agency. Operating Global IDentification - December 2005
by and large as government-backed monopolies until the past decade, postal systems could raise prices concomitant with their rising costs, often with scant or passing managerial attention to the quality of their services. Furthermore, while private small parcel competitors have been free to market their services to targeted markets irrespective of borders, postal authorities must maintain their commitment to “universal service” to all. Although the precise definition of universal service may differ from country to country, postal
agencies have an almost uniform mandate to serve all customers in all regions of their country without the ability to discriminate between them on pricing or service levels. At the same time, new technologies such as email, fax, text messaging and so on continue to allow personal, business, and government mailers to substitute e-technologies for stamps and paper.
purposes, with RFID-tagged (or “seeded”) letters and parcels tracking how long a package or letter takes to be conveyed from its sender to the receiver, especially internationally between disparate postal systems. Postal authorities all over the world are looking to RFID technology to deliver mail throughout their systems in a new way in the 21st century, and compete in this “new order” in which they find themselves. According to a recent Accenture report, the global cost and efficiency savings that could be achieved through RFID-enabled postal operations could be in the realms of billions of dollars annually. With the November release of IDTechEx’s “RFID in the Postal and Courier Service”, Peter Harrop, chairman of the research firm, commented that “We see a strong move toward revamping total postal systems to make it much easier to send and receive the correct package more promptly with better cost and security.” His firm has projected that by 2020, one trillion packages and letters will carry equipped RFID smart labels or even an “e-stamp”, a postage stamp with an RFID tag embedded in it. To put this in perspective, as shown in the figure,
Projected annual global market for RFID tags 2016
The move towards RFID Postal systems around the globe have made significant investments in automatic identification technologies for sorting, routing, and delivering the mail, including bar coding and phosphor dotting. However, they have only made limited use of RFID in the past. These uses have primarily been confined to asset, vehicle, and conveyance tracking, as well as smart card access for people to secure postal yards and facilities. RFID has also been used for testing and trial www.global-identification.com
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South Korea – Earlier this year, the Korea Electronics and Telecommunications Research Institute (ETRI) successfully demonstrated an RFID-based system that totally automates the postal process, from the acceptance of the package into the postal system through the sortation and dispatch process to final delivery.
It has been predicted that as many as 20 trillion letters and parcels will be equipped with RFID smart labels by 2020
a decade from now, postal applications will be the second largest potential market for RFID tags. Quite significantly, with all the attention being paid to item-level tagging of pharmaceuticals, postal tag usage will dwarf the drug market, with almost twenty times more tags being used to tag letters and parcels in postal applications than pharmaceuticals.
Setting the ball rolling There are several examples of progressive postal agencies around the globe that are piloting and implementing RFID-based systems. These include: Saudi Arabia - Saudi Post is undertaking the Wasel project – projected to be the largest RFID project of any kind undertaken in the Middle East - at a cost of US$270 million. For the first time, the Kingdom of Saudi Arabia will offer home delivery to its residents, eliminating the need for customers to collect mail from Saudi post offices. When fully implemented, the Wasel project will enable mail to be tracked throughout the Saudi system. To do this, Saudi Post is working with private contractors to outfit all residences in the country with specially designed, RFID-tagged mailboxes, assisting mail carriers to match the right letter or parcel with the right post box.
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Australia – Australia Post has been experimenting with “seeding” international mail to monitor transit times for the past two years. In October, the agency announced that it had selected Sydney-based Research International to implement RFID-based tracking nationwide. This will mean installing RFIDbased sortation and monitoring systems in Australia Post’s 10 major metropolitan letter-processing facilities, in addition to 44 other mail centers and 16 mobile units (for remote delivery areas). Sweden - The Swedish postal service, Posten, is piloting its SecurePak system. SecurePak uses specially designed cardboard packaging sourced from Cypak, a Swedish technology firm, which contains an embedded RFID tag that can be programmed to contain information regarding the package’s origin, contents and transit, and sensors to detect tampering with the box or the tape used to seal the carton. Posten has tested the system on shipments of high-value items and important government documents. Thord Axelsson, Posten’s chief security officer, recently gave an interesting example on the capabilities of SecurePak. He commented that: “There are some people who are not so honest, who are opening packages and taking mobile phones or computers. Using Cypak secure boxes or security tape, we can see when someone opens the package. There’s a time stamp on a microchip that can detect whether a box has been opened or cut using a knife. This makes it much easier Global IDentification - December 2005
for our investigators to go back into the logistics chain and see where the box was at 10:50 a.m.” Looking ahead, Axelsson predicted that: “The next step may be to see how we can use the technology once the box has been opened. Sensors in the parcel could activate the phone so that it makes a call, or so that we could track it through the phone’s GSM.”
Moving with the times Georges Clermont of the International Post Corporation recently commented that “postal services are one of the last vestiges of the good old days.” Today however, it is clear that postal executives can no longer continue to operate in a “business as usual” mode. The competitive, technological, and government pressures on postal authorities worldwide are forcing wrenching changes in what was formerly a monopolistic environment, largely free of cost, performance, and quality concerns. Indeed to remain viable in the 21st century, it will be incumbent on postal systems to explore how RFID technologies can be employed to deliver higher quality, more efficient, value-added services to their customers. As shown by innovative postal authorities around the globe, working with private sector partners and technology vendors, RFID can enable newfound levels of visibility and automation in the entire mail transit process. This can allow postal authorities to better utilize their physical assets and human resources to comply with their universal service mandate and compete more effectively with their privately owned counterparts. In a postal world where competition between national postal systems is morphing into direct competition, this will make process and quality improvements even more important over the coming decade. www.global-identification.com
Due to the sheer size of the postal market, RFID hardware and software vendors, both large and small, will be attracted to this marketspace. The vast potential for improvements – and money – to be made in the postal market is signified by the fact that Microsoft is looking to be a huge player, targeting postal agencies with a complete, RFID-based postal application. The Microsoft solution provides for total visibility to the sender, the receiver, and the postal agency - from the point of shipment to the point of delivery. Using Texas Instruments’ RFID tags that are affixed to a package, containing information about the package’s contents, sender, and destination, the tagged package can tell other electronic devices, like mail sorting machines, where it needs to go throughout the postal system. The software allows for continual monitoring of the package while in transit and for an alert to be sent (via MSN Messenger or a mobile phone SMS - Short Message Service) once the package has arrived at its destination. In the view of Dragon Shyy, a senior consultant at the Microsoft Technology Center in Taipei, “Most postal services worldwide are trying to adopt this type of technology.” Thus far, Microsoft is focusing on the fast-growing East Asian market, hoping to secure contracts with India’s SpeedPost service and Taiwan’s Chungwa Post in the coming months. Indeed, the national governments’ needs to respond to the changing postal environment, and make their still lumbering postal systems more competitive, will drive significant spending to vendors in this market for some time to come.
RFID can enable newfound levels of visibility and automation in the entire mail transit process, allowing postal authorities to better utilize their physical assets and human resources
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