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Nationwide parcel locker network to be accessible to all

Nationwide parcel locker network to be accessible to all

Source: Straits Times
Article Date: 06 Apr 2021
Author: Adeline Tan & Sharanya Pillai

The Postal Services Act was also amended to grant IMDA the powers to deploy and operate the nationwide parcel locker network which comes at a time when e-commerce use and parcel volumes have skyrocketed, in part due to the pandemic.

The nationwide parcel locker network that is being rolled out will be run by the Government so that it is neutral and freely accessible to all delivery service providers and consumers, Senior Minister of State for Communications and Information Sim Ann said in Parliament yesterday.

Safety measures will be put in place to prevent misuse and to ensure that the lockers stay secure, through both technology and laws that spell out offences such as tampering with the lockers.

To this end, the Postal Services Act was amended yesterday to grant the Infocomm Media Development Authority (IMDA) powers to deploy and operate the islandwide network, and comes at a time when e-commerce use and parcel volumes have skyrocketed, in part due to the coronavirus outbreak.

"The vibrant last-mile delivery sector has thrived with open and free competition, and should be given room to flourish," said Ms Sim.

"It is therefore our priority to facilitate an environment where all players can participate equitably."

Industry players in the logistics sector had expressly said during consultations that a national parcel locker network should be managed by a neutral operator to ensure open and non-discriminatory access for all players, Ms Sim told Parliament.

That and the need to roll out the locker network quickly to realise network effects is why the Government decided that the best option is to run such a locker system itself, said Ms Sim.

The parcel locker network, which will reach 1,000 stations in Housing Board estates, MRT stations, bus interchanges and community centres by the end of this year, will be managed by IMDA's wholly owned subsidiary, Pick Network.

Ms Sim said Pick was set up to run the network as public infrastructure so as to "avoid conferring an unfair competitive advantage upon any single player".

Originally slated to be ready by the end of next year, the schedule for the roll-out of the network of parcel stations was pushed forward by a year to ease the strain on delivery manpower.

It will complement the existing letterbox infrastructure, which is not designed for parcel deliveries.

While mail volume declined by 27 per cent between 2010 and 2019, the e-commerce sector here has been expanding rapidly, and is projected to grow by a compound annual growth rate of 16 per cent from last year to 2025.

But parcel deliveries, typically to consumers' doorsteps today, has a chequered report card. About 7 per cent of doorstep deliveries are unsuccessful, requiring return trips and therefore wasting manpower.

Currently, self-collection parcel lockers tend to be concentrated in high-traffic commercial areas and leave residential areas under-served, said Ms Sim, who noted that they cater to just 5 per cent of total parcel volume.

During the debate, several Members of Parliament, such as Mr Patrick Tay (Pioneer) raised concerns about the security of the lockers, especially since they will be located in public spaces and will be accessible to many delivery service providers.

Ms Sim said closed-circuit television cameras will be deployed at each station, as well as sensors that can detect if lockers contain objects when they should not.

Each locker station will have two cameras, which will come in handy both for incidents of alleged theft as well as disputes over the handling of parcels.

Each compartment will also have presence sensors to alert Pick of suspicious items, or if locker doors are not securely fastened.

With the amendments to the law, IMDA now has the power to direct the network operator to search the lockers and confiscate suspected harmful items if they are found.

The police and authorised IMDA officers also have the power to search the lockers and seize any items that are suspected of posing a threat to public health or safety.

Other amendments introduced to protect the network include making it an offence to open the lockers without authorisation, as well as to destroy, steal or throw away parcels. Offenders may face a fine or a jail term, or both.

Mr Yip Hon Weng (Yio Chu Kang) asked if the widespread use of these parcel lockers would mean that businesses may be inclined to cease doorstep delivery, or offer it at a higher cost.

This would work against groups like the elderly, who may be less mobile and rely on doorstep deliveries for items such as groceries, he said.

In response, Ms Sim said she believes that doorstep delivery is likely to continue.

"It is precisely because doorstep delivery is manpower intensive and not sustainable as a long-term default that we believe businesses are likely to continue to offer doorstep delivery at a reasonable rate to consumers if they're able to achieve productivity gains elsewhere, such as the kind of productivity gains we anticipate from the deployment of the network," she said.

Responding to MPs' questions on ways to expand the parcel network's functionality, Ms Sim said Pick and the National Library Board are exploring the possibility of allowing residents to borrow and return library books through the lockers.

Pick is also talking to industry players about using the lockers as collection points for recyclable e-waste, as well as studying the feasibility of including refrigerated lockers at some of its locker stations.


DOORSTEP DELIVERY WON'T BE ELIMINATED

It is precisely because doorstep delivery is manpower intensive and not sustainable as a long-term default that we believe businesses are likely to continue to offer doorstep delivery at a reasonable rate to consumers if they're able to achieve productivity gains elsewhere, such as the kind of productivity gains we anticipate from the deployment of the network.

MS SIM ANN, Senior Minister of State for Communications and Information, on the likely impact of the parcel lockers.

Pick Network not created to stifle competition in parcel-locker sector, says Sim Ann

Pick Network, the government-owned entity that will operate Singapore's upcoming parcel-locker network, was not created to stifle competition among private-sector parcel-locker operators, Senior Minister of State for Communications and Information Sim Ann told Parliament on Monday.

Formed last July, Pick is a subsidiary of the Infocomm Media Development Authority (IMDA). It will deploy, own and operate 1,000 parcel-locker stations in areas such as HDB estates, public-transport nodes, and community centres and clubs.

Addressing concerns that Pick could become a monopoly, Ms Sim said: "Let me clarify that our intention is not to put Pick in a favoured position. Pick's exclusive privileges are confined to the provision of parcel lockers at specified premises only.

"In this regard, the network, which will be available for use by all e-commerce marketplaces and delivery service providers, will serve to complement, but not compete with, existing locker offerings from the industry, which are accessible only by selected operators."

Ms Sim was speaking on the proposed amendments to the Postal Services Act, to grant the IMDA the privilege to establish, install, operate and maintain the parcel-locker network, as well as to appoint a network operator for these duties. The amendments were passed on Monday.

While expressing support for parcel-locker infrastructure, some MPs raised concerns during the session. For instance, PAP MPs Ng Ling Ling and Louis Ng questioned whether Pick could become overly dominant and dampen market competitiveness.

Ms Ng said: "(We) need to be mindful that such an arrangement will not stifle innovation, or worse, create an unintended monopoly by the network operator, which may increase the cost of operations for delivery service providers."

Meanwhile, Workers' Party MP Gerald Giam asked why the IMDA did not contract existing private-sector parcel-locker operators to operate the network.

"They already have the experience of running parcel lockers and can take on the investment risk and bear the cost of expanding the network. Is Pick's mandate to fulfil a need that is distinct and complementary to the services already provided by the private parcel-locker providers or would it be competing with them?" he asked.

Mr Giam also asked whether Pick may go against the so-called "yellow pages" rule, under which the government should exit from market segments that already have active private-sector players.

PAP MP Darryl David flagged the possibility of "unintended consequences" with market consolidation, such as whether "a single player will end up dominating the market", impacting long-term affordability.

Addressing these questions, Ms Sim said that having a "neutral" parcel locker operator is key to ensuring that the parcel-locker network can be efficient.

"The current private-sector driven market for parcel lockers is largely fragmented, with competing players deploying their proprietary networks which are accessible only by selected delivery service providers. This has given rise to deep inefficiencies for local operators.

"The lockers are duplicated at high-traffic commercial locations and e-commerce marketplaces and delivery service providers are unable to access all lockers which may be available," she said. Existing parcel locker operators include Singapore Post, Blu and Parcel Santa.

The rollout of 1,000 parcel-locker stations could solve this inefficiency. But for productivity gains to be realised, the network needs to be deployed expeditiously, and "by a neutral operator to ensure open and non-discriminatory access", Ms Sim said.

"We believe that these twin objectives that are outlined would be best served by a network operated by the government. In this case, it would be IMDA and to give effect to this intention, IMDA formed a subsidiary, Pick," she added.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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