By Nadia Khan
With increasing modernisation of postal services around the world, ME has some catching up to do with airmail services.
The postal service in the Middle East has not been without its critics. In the absence of a fool-proof postal address system in most countries, coupled with fierce competition from express mail providers and, of course, the email revolution, some businesses have given up on international postal mail altogether. Strict regulations in many Middle Eastern countries further limit the provision of outbound mail to government-run organisations. However, with the promise of increasing liberalisation of postal services inevitably leading to more competitors in the market, international airmail has the potential to make a comeback.
"There is a monopoly for delivering mail in the region so private operators are not encouraged to set up and offer customers an alternative option to the post," explains Sam Samara, director of distribution at Spring Global Mail, a joint venture for cross-border mail between TNT, Royal Mail Group and Singapore Post. "Because of this Spring Global Mail is not investing within the region for outbound mail, but we are very active in supporting inbound delivery services via private operators to improve quality of service and reduce distribution cost."
The Middle East with its dynamic economy and with worldwide business relations is definitely one of the future growth markets for airmail. Martina Goergen
Samara believes that airmail traffic still has a lot of potential for growth in the region, in spite of the increase of internet and electronic messaging. "Airmail in the Middle East is still significantly small contributing less than 5% of total export mail compared with Europe and North America," she says. "Once the region is fully liberalised this will open many opportunities, creating competition which will improve quality of service at competitive pricing."
To meet these growing demands for more reliable international mail services, providers are turning to diversification and technology to solve businesses' airmail needs. Digital technology is seen as being less of a threat to postal services, and more of a necessity in the fast-moving business environments of the Middle East. In particular, the region has been witnessing a trend of operators developing their own bespoke technology to further enhance their services. "Within the Middle East region mail is delivered to PO Box numbers and technology is generally good. Qatar is a good example where an electronic PO Box system with SMS and email alerts is available as part of the standard service offered in the country," Samsara points out.
Developments in technology around airmail are not limited to the postal services - with carriers themselves also updating their systems to ensure a role in this growing market. Martina Goergen, director of the Competence Centre Airmail of Lufthansa agrees that increasing competition will lead to a push for more time-efficient and reliable airmail services. "There are three major factors of success in order to meet the expectations of mail customers for fast transport and reliable delivery on time," she emphasises. "Firstly, a worldwide network - eventually with partner airlines - to cover all main areas of mail traffic. Secondly, dedicated mail handling and sorting processes at each station and the major hubs. And thirdly, an airmail IT-system which allows on-time tracking and tracing."
By providing its customers with all three features including permanent improvements, Lufthansa Cargo and its subsidiaries make sure that they stay on top of the airmail game. Furthermore, the carrier currently chairs the IATA Airmail Panel, which meets annually to discuss the development and maintenance of standards for the procedures, documentation and flow of information relating to the carriage of airmail, including the implementation of technical and procedural standards for electronic data interchange (EDI). "The development of electronic information exchange is mandatory for the business development," says Goergen. "In this respect it is of outmost importance that all parties work on the same system. IATA, UPU (Universal Postal Union) and IPC (International Post Corporation) have agreed on certain standards and an implementation plan for these standards."
By implementing its IT systems, Lufthansa is able to provide mail customers with permanent status information, online proof of delivery and new accounting procedures. "In co-operation with other IATA airlines and postal customers we are developing systems to combine the existing mail documents with the traditional cargo documents (AWBs) in order to meet changing demands of several customs organisations," states Goergen.
The carrier has also begun co-operating with selected mail customers in respect of tailor made solutions for mail transport or mail handling. In the Middle East, this includes working with Emirates Post to use its mail hub for distribution of mail shipments into some areas not flown directly to by the carrier.
"The Middle East with its dynamic economy and worldwide business relations is definitely one of the future growth markets for airmail," maintains Goergen. "The geographical location between Europe and Asia will give the Middle East a huge potential for mail business." Additionally, she points to services such as Emirates Post and Saudi Post, which have started new business-like hub services into smaller countries in the region including Eastern Africa and Northern Asia.
A keen proponent of progress, the United Arab Emirates official postal service, Emirates Post, has also been updating its system in line with technology and business diversification. The postal service has formed strategic partnerships with three of the other postal services using Dubai Airport Mail as a hub to route their mail deliveries throughout the region - Deutsche Post, Swiss Post and British Royal Mail. In addition, Emirates Post plans to vastly enhance its postal service include the building of a three-storey postal operations hub adjacent to its existing sorting centre.
Once the region is fully liberalised this will open many opportunities, creating competition which will improve quality of service at competitive pricing. Sam Samara
Despite this progress, the Middle East still has some way to go. "Mail systems in the region have not reached the advanced technology level like in the US or parts of Europe - yet," says Goergen. One of the major impeding factors, she believes, concerns the electronic exchange of status information of mail shipments. "According to actual discussions between carriers and local post, I expect that this deficiency will be overcome very soon," she says positively. "If those on the post side will continue with their efforts to implement new IT systems and will offer additional services like sorting and distribution facilities, double digit growth figures can be expected."
Despite this steady progress in international postal mail in the region, courier express mail has become more of a necessity for business wishing to ensure their time-sensitive documents arrive on schedule. "Mail is perceived as a non priority non time sensitive product therefore allowing the courier companies to offer such services domestically and regionally," comments Samsara. Infact, Spring Global Mails very own parent company, TNT Express is a prime example of this, having continued to improve its express operations across the GCC in countries such as the UAE, Kuwait and Bahrain.
Dnata Cargo has also been witnessing the healthy growth in the express mail industry firsthand. "The market for express business is growing at approximately 15-20% annually," highlights Jean Pierre L. De Pauw, senior vice president of Dnata Cargo. Dnata's Express Handling Centre (EHC), based at the ever-busy Dubai International Airport, has been set up to specifically meet the increasing demands of express and courier operators in the region. The centre is able to handle approximately 3.1 million express and mail parcels, and houses many well-known operators in the express world including Aramex, TNT and OCS.
The EHC has experienced an impressive 17% year by year increase in express and courier movements in 2006-2007, handling around 17,500 tonnes of mail and a staggering 50,000 tonnes by courier. But the scope for further growth is ever present. "The challenge for Dnata Cargo's EHC is to continue to improve its processes in terms of speed, quality and reliability," confides De Pauw.
Not surprisingly, this growth of the express airmail sector has not gone unchecked by the region's newly reinvigorated postal services. For instance, as well as its investments into postal air mail, Emirates Post recently revealed its plans to diversify to capitalise on the expanding express mail market by launching its own air courier service. "The goal behind launching our own freighter service is to control the movements of goods by air, rather than depend on regular carriers, as there is always a shortage of capacity in this busy market," said Abdullah Ebrahim Al Daboos, director general of Emirates Post. "We intend to adopt the business models of DHL, UPS, FedEx and others, and develop the lucrative freighter business," he added. With the postal service provider already having selected the 44 tonne capacity Airbus A300, it is planning to add a plan to its fleet each month with a target of 50 planes in the next five years.
As the lines which divide postal and courier air mail become more blurred, there will be increasing opportunities for companies in both sectors to diversify and improve their services to meet the needs of a growing and ever-demanding region. Whether it's the postal services, express operators or airlines themselves, it is clear that the Middle East is catching up fast to the potential of the airmail market. And judging by its rate of development in general, it won't be too long before international airmail is back on the region's map.
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