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Automated hub part of SingPost’s plans to rule e-commerce market

SINGAPORE — When inventory comes through the doors of Singapore Post’s (SingPost) new logistics hub in Tampines, which will open in the second half of next year, its workers will have relatively little to do — although up to 100,000 packages may pass through the facility daily.

SP eCommerce CEO Marcelo Wessler (left) and SingPost group CEO Wolfgang Baier. SingPost started SP eCommerce two years ago to provide one-stop, end-to-end e-commerce solutions. Photo: Tristan Loh

SP eCommerce CEO Marcelo Wessler (left) and SingPost group CEO Wolfgang Baier. SingPost started SP eCommerce two years ago to provide one-stop, end-to-end e-commerce solutions. Photo: Tristan Loh

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SINGAPORE — When inventory comes through the doors of Singapore Post’s (SingPost) new logistics hub in Tampines, which will open in the second half of next year, its workers will have relatively little to do — although up to 100,000 packages may pass through the facility daily.

This is because almost every step, from the sorting of goods according to categories and their storage in the second and third storeys of the 5.14ha facility to picking up items for orders, packing them and transferring packages to ships, will be fully automated.

The first-of-its-kind building in South-east Asia is an integral part of SingPost’s plans for its quest to rule the e-commerce market in the region — the reinvention by the nearly 200-year-old national postal service was picked up and featured in a report last week by The International New York Times.

“With this critical infrastructure in place, it will radically transform our full range of e-commerce logistics capabilities across warehousing, fulfilment, sorting and delivery,” said SingPost group chief executive officer Wolfgang Baier.

A mega automated parcel-sorting system will span the entire ground floor of the sprawling facility — its largest undertaking, with a size of four-and-a-half football fields. Every item that comes through will have its specifications, such as its actual and volumetric weights, automatically measured and recorded.

In fact, more than one-sixth of the S$182 million SingPost is spending on the facility will go towards automation and warehousing equipment, as it seeks to double its e-commerce productivity.

SingPost’s first dip into the e-commerce pie started more than a decade ago. It sold products on its homegrown platform and forwarded purchases from international online retailers.

But its makeover happened in 2011, for the sake of its “survival”, said Dr Baier. With its public mail volume dropping 12.3 per cent from financial year 2011 to 2013 — albeit less severe than the 21 per cent slide across the world since 2007 — SingPost started SP eCommerce two years ago to provide one-stop, end-to-end e-commerce solutions for areas from website design, warehousing and shipping to post-delivery customer care.

“The postal landscape has shifted dramatically. Driven by technological advances, mail volume has been declining very, very fast. Some of our postal colleagues around the world have seen very strong declines ... We needed to build a new platform, something that we can land on when our platform has diminished, and move on. With that in mind, we looked around and asked, ‘Hey, where can we be relevant?’ Then we found e-commerce,” he told TODAY last week.

Adidas was the first international brand to engage SingPost for the whole range of e-commerce services. It now caters to 14 other brands, including Muji, Levi’s and Toshiba.

Said SP eCommerce chief executive Marcelo Wessler: “Many multinational brands have their hands full running their markets elsewhere in the world, so we come in to offer a turnkey solution.”

SingPost currently has 20 warehouses in 15 countries in Asia-Pacific, the United Kingdom and the United States. About 1,000 local and foreign clients have also engaged the company for various forms of e-commerce services.

Today, SingPost’s e-commerce-related revenue accounts for about 28 per cent of the entire group’s takings, a 20 per cent year-on-year growth from 2014. In December, it acquired Australian parcel delivery service Courier Please Holdings and now manages a similar end-to-end e-commerce model Down Under.

And it is forging ahead with its next target segment: Local small and medium enterprises (SMEs). Launched last month, ezyCommerce lets SMEs ease into e-commerce by giving them a simple, off-the-shelf interface to connect multiple online sales channels, centralise inventory and automate the processing of orders. SingPost then packs and delivers the goods to customers in Singapore and the region. Kelly Ng

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