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COVID-19 outbreak for parcel and postal operations

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COVID-19 outbreak has been declared a pandemic by the World Health Organization, causing huge impact on people’s lives, families and communities.
To ensure continuing business operations through uncertain times, businesses need to build and rehearse a operational capability to respond to growing parcel processing volumes, increased demand for remote working, and changing delivery patterns.

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COVID-19 outbreak for parcel and postal operations

  1. 1. Considering the potential COVID-19 outbreak’s impact on parcel and postal operations 25 March 2020
  2. 2. PwC Strategy & Operations Responding to COVID-19 in the CEP industry requires to focus on 6 priority areas 2 The COVID-19 outbreak has been declared a pandemic by the World Health Organization, causing huge impact on people’s lives, families and communities. To ensure continuous business operations through uncertain times, businesses need to build up an operational capability to be able to respond to growing parcel processing volumes, increased demand for remote working, and changing delivery patterns. Protecting the well-being and welfare of the whole workforce – both those that are still engaging physically and those working remotely, including mental health. Reduced resilience as key functions, infrastructure and services, or locations become unavailable. Delays in on-site activity, impacting projected financials. . Re-routing, delays, disputes and other knock-on effects on customers. Workforce Operations Delivery Protecting the electronic communication also for remote access. Providing the relevant resources and IT capacity including both software and IT tools. Impact on customers’ shipping structure, volume flows, as a result of a significant uptake in online retail. Leading to cash flow and contractual issues. Providing the clear and effective communication with all stakeholders, both internal and external, including delivery force and first line. Cyber security Customer and revenue Communication
  3. 3. PwC Strategy & Operations Parcel, postal and ecommerce operations face significant challenges and disruption and will have to be able to navigate through crises and unforeseen events for even longer than current peaks 3 PwC epidemiologists and economists have worked together to form coherent scenarios based on fact-driven assumptions CONTAINED Population distancing and movement controls prevent ongoing spread of the disease 1 Newcases/week HOT SPOTS Pandemic spread prevented but ongoing disease hotspots emerge and are contained 2 Assuming vaccine available– June 2021 PANDEMIC Public health measures fail to prevent a pandemic. Focus shifts to reducing outbreak’s impact 2020 2021 2022 Assuming vaccine available– June 2021 3 2020 2021 20222020 2021 2022 Assumptions: • Near 100% case detection rate in all countries, including mild cases. • Successful contact tracing and quarantine measures in all countries. Impact: • Workforce: Home working and travel restrictions in affected countries as disease is contained. • Supply chain: Reduced output from affected countries impacts supply chain in the short term. • Economy: Uncertainty has a short term impact on markets. Affected countries more significantlyimpacted. • Timeframe: 3 to 6 months. Assumptions: • Not all cases are detected, allowing spread at a reduced frequency. • Successful contact tracing and quarantine measures around emerging cases prevent a pandemic. Impact: • Workforce: Home working and travel restrictions in existing and newly affected countries. • Supply chain: Reduced output from affected countries impacts supply chain. • Economy: Ongoing uncertainty has longer term impact on markets. Affected countries more significantly impacted. • Timeframe: 12 to 18 months. Assumptions: • Contact tracing and population movement controls are unsuccessful in containing the outbreak. • Commercially available vaccine necessary to stop the spread of the virus. Impact: • Workforce: Major global disruption, including home working, travel restrictions and morbidity and mortality in the workforce. • Supply chain: Global shortage of some goods due to production slowdown. • Economy: Increased risk of global recession dependent on the severity of the pandemic. • Timeframe: 12 to 18 months.
  4. 4. PwC Strategy & Operations It requires setting up your COVID-19 response to be able to conduct effective and safe operations across the End-2-End process integrated with … 4 • Can shift in patterns be managed in a different way to provide more cover and separation between operational teams? • Are handwashing facilities adequate, do you need to give colleagues any additional PPE to help mitigate risks? • Is it possible to reassign roles for staff even if this requires training (e.g. retraining a office staff to parcel delivery / sorting operations)? • Have you updated your policies regarding sick pay in order to support self- isolation beyond what the government has advised? • Have you set up an internal support helpline for staff? • Are staff being provided with physical and mental health support in this increasingly stressful situation? • Have you prepared for indirect impacts on your staff (e.g. school closures, transport disruption, localised lockdowns)? • Are you able to flex your staffing to demand, while planning and segregating for business continuity? Workforce Protect your people and plan your workforce COVID-19 response strategy • How often are logistics units, Line-hauls, PUDO’s and courier vans being disinfected? • Are you aware of the impact from COVID-19 on the End-2-End operational process / types of products you process? • Do you have logistics network crisis scenarios in terms of sorting hubs black outs, regional lockdowns? • Have you secured relevant capacity in the logistics network to provide required operational efficiency? How long are you able to keep this level? • Have you got relevant processes, equipment to conduct operations with each type of products? • Have you got enough fleet to manage sustained high volumes or shifts in volume within a logistics network? • Have you secured additional operational capacity for higher inventory levels? • Are you able to increase your sorting and operational capacity to logistics units for a peak in demand with more consumers switching to e-commerce? • Are you maximizing the amount of inventory you hold (if possible) to ensure you can operate if fuel supplies become limited? • As air freight may be carried in the cargo bay of commercial passenger airlines, what is the impact on your international volume flows or changes to commercial schedules and cancellation of flights on key trade lanes (supply of airfreight capacity not very elastic)? • Is it possible to use alternate routes, if so, is it financially viable? Is it possible to increase the road / train routes as they appear to be less affected? Operations Maintain business continuity and manage efficiency of your operations • Have you considered a way to prevent physical contact with customers, such as using lockers for deliveries or leaving parcels on doorsteps? Could you ask consumers to notify you if they are showing symptoms of the virus or self-isolating so extra caution can be applied? • Have you secured relevant number resources for delivery? Number of couriers? Number of courier vans? Number of parcel lockers? • Have you secured relevant capacity of delivery vans in order to respond for the growth of the volume? • Are you able to increase your delivery capacity to account for a peak in demand with more consumers switching to e-commerce? • Delivery pattern changed as a results of increase „home office” model – how can you adapt your operating model and / or mitigate the impact of this? • Has a prioritisation of delivering given types of goods been discussed (medicines over luxury items)? Delivery Maintain last mile operations and protect your delivery forces
  5. 5. PwC Strategy & Operations … revised business operations affected by short- and long-term changes in customers’ behaviour patterns 5 • Do you have remote access and VPN applications in place for all endpoint devices? • Are your remote access and VPN applications scalable on demand? • Do your VPN applications have multi-factor authentication in place? • How do you manage user identity when they access systems remotely? • How do you provision user access when users access systems remotely? • Can you implement additional security controls to provide enhanced control on the network (e.g. virtual network zoning, endpoint device compliance checking, etc.) • Does your security monitoring capability alert you on suspicious / unusual VPN activity? • Will network bandwidth support significant increased use of remote access services or is there heightened potential for loss of service (inadvertent DoS)? Cyber security Reviewing and upgrading existing technology to ensure sufficient capacity COVID-19 response strategy • What are the options around pricing decisions and discounting? • What additional surcharges can be implemented? • Do you consider a switching to paperless process? (digital attempted delivery notice, only printed waybills, digital complains’ form, etc.) • Do you have a strategy for customers’ prioritisation in terms of operation under capacity? • Can we move more customers to scheduled pick up? • Can we move more customers to self-service shipping solutions? • Can we drive more volume to self service delivery, e.g. parcel machines? • As customer stockpile key essentials can you combine routes or work with smaller operators to meet demand? • Do we track customers’ performance in case of insolvency or bankruptcy? Customer and revenue Balance customer care with commercial priorities • Have you created an internal and external stakeholder map for key communications (considering staff, customers, suppliers, regulators, etc.)? • Do you have a clear communications strategy that can be implemented in a crisis to protect your reputation and maintain the trust of your stakeholders? • How are you communicating with your employees? • How are you keeping employees regularly informed about the latest updates and guidance? • How are you providing reassurance and consistent messaging to all staff and showing a duty of care? • How are your crisis communications aligned with your organisation’s culture and communications requirements? • How can best practice approaches be tailored to suit your • organisation? Communication strategy Provide clarity to employees and stakeholders and enable business continuity
  6. 6. PwC Strategy & Operations Beside short- and mid-range crisis planning below you can find a few quick wins on how to grow you operational capacity 6 Potential process improvements Implementing of a U-shaped roller conveyors. The use of such a system with 18 employees and 24 directions allows achieving a max sorting capacity of 6,000 packages per hour The use of three lines of roller conveyors for unloading packages. One person sorts into three groups based on the code ranges (one group per one line). Later, 1-2 people sort them into courier groups. Then couriers do final sorting of parcels into their own routes Delegating a dedicated employee to consolidate shipments at large customer’s warehouse to speed up the process and enable cross-dock operations Parcel consolidation at the warehouse location of large clients Using of three-lines roller conveyors from line-haul trucks during unloading U-shape set-up for an additional manual sorting in depot or hub Extra support for delivery force Additional employee / helper during a delivery to increase the number of packages on a car stop as well as depot employees who can load/unload couriers’ cars to increase couriers’ efficiency
  7. 7. Thank you! Radosław Małkiewicz Manager Parcel & Postal Knowledge Hub +48 519 504 362 radoslaw.malkiewicz@pwc.com +48 519 507 386 grzegorz.urban@pwc.com Grzegorz Urban Director Parcel & Postal Knowledge Hub