Delays and disruption as Russian Post struggles with e-commerce
Wednesday, April 10th, 2013
Russian Post is contending with tons of backlogged international mail â€“ mostly e-commerce parcels â€“ in Moscow after problems with staffing levels in the Russian customs service.
An embargo on inbound international mail has been declared from 9th to the 14th April at Sheremetyevo International Airport with reports of 500 tons of mail sitting waiting to get through customs.
Growth in the volume of mail sent to Russia from abroad has doubled in the last three years, while at the same time domestic mail volumes have grown only 15%. Internet shopping accounts for about 70% of Russian Postâ€™s parcel volumes.
Russian Post itself has been struggling with its own infrastructure, and last year urged major foreign posts to consider sending inbound Russian mail to specific regional airports, rather than via Moscow, to avoid swamping the Russian capitalâ€™s processing facilities.
However, the latest problem has seen the Post suggesting that customs officials are as much to blame as the problems in the postal network, particularly with a 20% cut to civil service staffing levels in 2013 as ordered by the previous Russian President, Dmitry Medvedev.
Russian Post director general Alexander Kiselev has now written to the Federal Customs Service calling for improvements.
Foreign postal operators have been warning their customer of likely delays, while looking for alternative routes for particularly urgent items.
bpost international, the cross-border mail division of Belgiumâ€™s bpost, said that with Domodedovo International Airport also closed to international mail it was routing some mail and express items through Turkish Airlines, with some letter mail going through bpost UK.
Russian Post is facing considerable domestic network problems as well, and as of today more than 11,000 people have signed an online petition at Change.org calling on President Vladimir Putin to deal with the mail network.
The petition complains that some people are having to wait up to six months for a parcel to be delivered.
The Post organized an open forum last week to discuss the problems it is having keeping up with the distance selling market, discussing the issues with politicians, experts and representatives of public organisations.
Russian Post has been calling for state assistance for months to help modernise its aging processing infrastructure.
The company said its forum had come to the conclusion that a concerted effort is needed from both government and business to address the logistics problems in Russian e-commerce and distance selling.
But without government support, Russian Post said strategic development of the business was â€œimpossibleâ€.
Alexander Timofeev, director of production processes, said the company was in need of â€œserious investmentâ€ to provide the desired level of service quality and tap the potential for Russiaâ€™s distance-selling market.
He said: â€œ60% of our existing infrastructure is in need of replacement and cannot provide quality service for the avalanche flow of parcels. And it will inevitably become a brake on the further development of distance selling in Russia if we do not solve this problem.â€
Alexei Mitrofanov, the chairman of the State Duma committee on information policy, information technology and communications, said the outdated infrastructure and technology and high reliance on manual labour at Russian Post was constraining the distance-selling industry.
â€œThis concerns a huge industry that employs hundreds of thousands of people and we as a legislator take this legislation very seriously,â€ he insisted.
OZON Holdings, the ecommerce firm dubbed the â€œAmazon of Russiaâ€, spoke at the forum to state that dealing with Russiaâ€™s distance-selling logistics problem cannot be solved by simply upgrading Russian Postâ€™s creaking network.
Nina Mogilev, the director of service delivery at OZON Holdings, said: â€œWe are interested in the development of mail in Russia, as we see this as important in the future development and expansion of our business throughout the country.
â€œBut to build an affordable, effective and efficient system for the delivery of goods to the population of such a great country it is not enough to just update the fleet of Russian Post or add an automated sorting system in order to work effectively. You need a strategic interation between all the participants in this process â€“ the rapidly growing e-commerce sector and also government, transportation and logistics companies,â€ said the OZON director, whose company has 11m registered users and makes $500m (USD) a year in sales.