Delivering Efficiency: Streamlining Pick-Up and Delivery in the Post & Parcel Industry

White paper
Delivering Efficiency:
Streamlining Pick-Up
and Delivery in the
Post & Parcel Industry
In today’s fast-paced post and parcel industry, streamlined
efficiency is more important than ever. Often times,
however, the determining factors are out of our control.
Many of the most technologically-advanced delivery companies
in the world still pick up a relatively high percentage of their
items without prior knowledge of the destination or any other
delivery element prior to taking physical control of the item.
For example, what portion of your business is a surprise? How
do these surprises impact your downstream processes? How
much does it cost you when an item cannot be delivered the
first time (or at all) and must be rehandled, redelivered or
returned to sender? First, let’s define a “surprise.” In this use,
it is an item that walks into your retail location or is picked
up at a scheduled or regular pick-up point without the details
of the shipment or delivery available prior to the pickup.
Some of our most advanced customers don’t know the answer
to this question prior to being asked. Do you? When challenged,
some of the most advanced companies in the world found
“surprises” like these are accounting for as much as 10-25 percent
of the items they are picking up. That is as much as 25 percent
of their business they don’t know about in advance – meaning
they can’t plan for downstream processes, in turn eliminating
much (if any) chance to do dynamic network optimization or
downstream labor planning. That also means as much as 25
percent of their business also requires someone to sit in front
of a computer to manually enter the shipping details, including
the delivery address, which they tell us can take in excess of one
minute per package – ultimately costing millions of dollars each
year. If they want any chance of advanced notice on the shipment
and true tracking from the point of pickup, it entails having their
most expensive resource, the courier, enter the data on their
mobile computer. Our customers have found that these methods
are not only time consuming, but very error prone as well.
And, due to decreasing work forces and overall increased
productivity issues, delays and other shipping errors are further
decreasing customer satisfaction. According to a 2009 Gallup
Poll, the U.S. postal industry alone has lost $8 billion since
2007.1 In order to be successful in such challenging times,
industry leaders must find ways to both increase revenue
and reduce costs. To mitigate these issues, post and parcel
industry operators are actively pursuing new technologies to
help enhance profitability, while also increasing visibility and
planning capabilities through the elimination of errors.2 New
technology solutions may hold the key to solving this issue.
Eliminating Manual Entry, Increasing Overall Visibility
Today’s post and parcel organizations have been drastically
affected in recent years by rising costs and shifting requirements –
meaning doing business in the global economy is creating new
challenges for companies with even the biggest technology
budgets. More than ever, companies are looking to new
technology solutions to offer a better visibility into their
daily operations, helping to avoid errors before they start.
As previously mentioned, our customers estimate that in today’s
post and parcel systems nearly 25 percent of items aren’t visible
in company track-and-trace systems upon customer pick-up,
causing these items to be manually entered later at some point
along the process. The human error associated with manual
entry alone is high, but companies also must take into account
that these manually-entered packages become an unwelcomed
surprise to sortation workers when they arrive at the sorting
center. With only a few hours between the items’ pick up and
the sorting process, there is little time to manually enter these
items into the track-and-trace system with any advance notice
for downstream process workers. Not to mention that the further
into the process that the item gets from its origin, the higher the
level of complexity and costs related to the research or customer
service necessary to rectify issues. An obvious statement, but
worth saying is that it is easiest to correct issues standing in
front of the customer versus remotely solving the problem later.
Misrouting errors can also easily occur from manual entry. In the
postal industry, many current automated processing machines
read addresses from the bottom up, searching for a delivery
address last. If machines can’t read each individual line, or can’t
accurately read the way the address was written, the mail can be
delayed or misrouted. Additionally, added information, such as an
attention line, can further confuse and misdirect mail. Essentially,
in current processes, it’s undeniably easy for pieces to get deep
into the delivery network before any problem with the address is
recognized, often making it all the way to delivery before the error
is noticed. This causes the item to be re-handled – potentially
as far back as the items’ origin, and the costs associated with
these re-deliveries can be staggering. A technology that could
verify the validity of addresses from the point-of-pickup could
easily correct these simple errors before they happen, allowing for
increased visibility, better efficiency and increased overall ROI.
1 Jones, Jeffrey. “Americans Advocate Reduced Services to Help Postal
Service, Gallup Poll.” Feb. 16, 2009.
2 Danner, Phil. “Increasing revenue and cutting costs: Staying ahead
in the postal industry.” Nov. 1, 2008.
For example, Figure 1 showcases how manual entry
could sideline a fleet of drivers in a single day.
As Figure 1 clearly showcases, simply eliminating the time
necessary to input a few items requiring manual entry per
day can equate to hundreds of lost hours saved day for an
entire fleet. This otherwise lost time can equate to delivery
delays, lost revenue, customer dissatisfaction or overall
losses, not to mention artificially increased labor costs.
New technologies that offer to extract and verify address
data would save not only the additional labor expenses
associated with the data in Figure 1, but would help to eliminate
bottlenecks at sorting centers currently necessary to handles
these items. Additionally this would enable other process,
such as network planning, to work from much more accurate
information received hours in advance of current processes.
To summarize, a solution that would quickly and accurately allow
data entry at the point-of-pickup would allow companies to
optimize downstream logistics, displaying in real-time what items
are being entered into the system and where they will need to be
delivered. This offers total transparency from pick up to delivery.
use some sort of address verification, but these systems only
work if the address is entered and verified before pick-up.
With rising fuel costs and smaller workforces, “undeliverable
as addressed” has become one of the biggest proficiency
issues in today’s postal industry – and certainly one of the
most costly. As previously outlined, many items brought into
delivery systems aren’t addressed correctly, yet it’s often hard
to catch these errors until the address is either verified at the
sortation center, or until the driver realizes there is an error
upon delivery. This creates not only a significant delay to the
shipper, but the added expense of correcting the delivery error.
A mobile solution that would provide the same proven address
verification used in current sortation operations would help
with this phenomenon. Unlike manual entry and paper-based
processes, a mobile verification solution could automate the
extraction process, offering a cleansing and correction of any
data errors at the collection point, eliminating issues before
they entered the network. This could virtually eliminate
the “undeliverable as addressed” problem on every item
processed, offering an incredible increase in accuracy in an
easy-to-implement solution with minimal process impact.
Undermining the Undeliverable
Industry research suggests a large national parcel operator can
easily face thousands of dollars per year in delivery re-attempts,
with each undeliverable parcels costing up to $10 process and
resend.3 Many post and parcel companies have systems that
Figure 1: Cost of Manual Entry
for Manual Entry for Manual Entry
60 seconds
60 seconds
60 seconds
for Manual Entry
10 minutes
6 minutes
2 minutes
166 hrs
500 hrs
333 hrs
Average Hourly
equivalent cost
Estimated Savings
Per Fleet
166 hrs x $50 =
$8,300 x 250 days =
500 hrs. X $50 =
$25,000 x 250 days =
333 hrs x $50 =
$16,650 x 250 days =
Fill in Your
Own Figures:
3 Brown, Kevin. How Today’s Intelligent Postal Technologies can Benefit
Best-in-Class Merchants.” April 2010.
Increasing Customer Satisfaction
Customer demand for increased delivery performance is at an all
time high. The increased demand for instant and accurate delivery
status and customer information is driving a dire need to ensure
shipment integrity in the post and parcel supply chain. In fact, the
increase in customer demands, including shorter cycle times or
higher on-time delivery performances were noted as a top pressure
by nearly 35 percent of “Best-in-Class” respondents in a recent
study by Aberdeen Group on transportation organizations.4
Delayed or undeliverable shipments are considered unacceptable
by shippers and receivers, making customer service one of the
most important factors in delivery operations. Additionally,
because customers and businesses can increasingly source more
and more products on the Internet, post and parcel operators are
looking to further maintain their businesses through satisfied
repeat customers.
As a result of rising fuel prices and other economic factors
that rise overall operational costs, delivery organizations must
operate as efficiently as possible to avoid further decreased
profits. This directly ties into customer satisfaction; with
customers already adjusting to rising costs of shipping, they
will have less tolerance for errors, and with consumer and brand
loyalty decreasing in order to find the lowest overall price,
unhappy customers will quickly move their business elsewhere.
The ability for a mobile solution to immediately make shipments
visible to not only the delivery organization, but to the shipper
would help to alleviate this pressure. Customers would know the
status of all items shipped from the moment they are picked up
by the driver. The same applies to the receiver. They are able to
track all items to make sure they will be delivered on time from the
moment they leave the sender, which gives them more confidence
that their package will be sent or delivered on time, without delays.
In the age of increased e-commerce purchases, this is extremely
important to maintain customer satisfaction. Shippers realize
that their delivery company is as much a part of their customer
perception of the service as their own internal processes. Failures,
no matter whose fault, impact that perception and ultimately
impact the shipper’s relationship with the delivery company.
Eliminating unnecessary errors and delays will become more and
more vital as technologies and consumer shipping needs increase.
In order to improve in this area, companies are increasingly
looking to new mobile technologies to help increase revenue
and reduce errors to maintain customer loyalty.
A New Solution
One new technology advancement delivers an overall cost
reduction, as well as reduction in errors, in a streamlined, costeffective way: VERDEX, a revolutionary new solution from
Intermec Technologies. Nearly eliminating all downstream
visibility issues and undeliverable address data, Intermec’s
VERDEX is a real-time solution for enhanced data collection
that helps to further the delivery process evolution by:
• Providing instant, accurate address verification from the
point of pick-up
• Virtually eliminating all address related errors to offer
delivery organizations efficiency
• Easily integrating into existing processes with minimal
user intervention
• Offering unprecedented time savings, improving customer
service satisfaction
As showcased in Figure 2, VERDEX adds a proficiency
not possible with current processes. This new solution
not only helps organizations run more efficiently, but
virtually eliminates all address related errors while further
improving customer service and overall satisfaction.
Figure 2
(Manual Entry)
(Entry into alpha
numeric keypad)
4 Heaney, Bob. “Internal Transportation: Optimize Cost and Service
in a Global Market.” Aberdeen Group Report. July 2010.
How it Works
With current systems relying on manual entry or choke point
processes that capture items for introduction into the network
flow, VERDEX offers a type of address verification for the
mobile postal worker never before found on a handheld device.
The name VERDEX is a combination of “VER” and “DEX” from
“verification” and “data extraction.” Compatible only with
Intermec’s CN50 and CN3 mobile computers (both operating
Window’s Mobile 6.1), VERDEX is able to virtually eliminate
current problems in the post and parcel industry worldwide.
After capturing an image using a handheld scanner, such as a
shipping label, VERDEX performs SmartMatch™ verification
against a custom or commercial database of known
information, in this case, addresses. After SmartMatch™
verification, the image goes through a cleansing process to
validate and correct address information or supply back a
corrected address, preventing common shipping errors.
Through VERDEX’s SmartMatch™ verification and
cleansing process, mistakes, such as listing “street”
instead of “road,” spelling a city or street name incorrectly,
including any number of address abbreviations, are
automatically corrected, ensuring proper delivery.
VERDEX easily integrates into line-of-business applications
and is currently the only solution in the marketplace to
provide context aware data collection at the point of work.
As the post and parcel industry continues to rely upon more
sophisticated processes to help eliminate costly issues, the
demand for automated mobile solution and data extraction
capabilities is at an all time high. Mobile technology must be
utilized in the future to help tackle the costly and advancementbarring issues faced in today’s post and parcel landscape. New
solutions, such as VERDEX, offer a complete, error-reducing
solution at the point-of-pick up. The postal workforce will find
increased efficiency and productivity, eliminating some of the
industry’s most troublesome, costly and advancement barring
issues worldwide – before they even enter the network.
About Intermec
Intermec’s innovation dates back for more than 40 years,
having successfully integrated hundreds of thousands of
solutions into demanding fields around the world. VERDEX
was developed in partnership with RAF Technology, Inc., a
world-wide leader in advanced pattern and image recognition,
intelligent information extraction and data verification solutions.
VERDEX utilizes commercial or custom databases provided
and maintained by RAF, allowing precise information to pass
automatically from the package to pickup and delivery systems.
Intermec Inc. (NYSE:IN) develops and integrates products,
services and technologies that identify, track and manage
supply chain assets and information. Core technologies include
rugged mobile computing and data collection systems, bar code
printers, label media, and RFID. The company’s products and
services are used by customers in many industries worldwide
to improve the productivity, quality and responsiveness
of business operations. For more information about
Intermec, visit or call 800-347-2636.
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is a registered trademark of Intermec Technologies Corporation. All other
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612095-01A 11/10
In a continuing effort to improve our products, Intermec Technologies Corporation
reserves the right to change specifications and features without prior notice.