2021 - Last mile delivery hype or saviour? Let’s talk parcel lockers

The 2020 IPC Cross-Border E-Commerce Shopper Survey looked into the delivery preferences and experiences of over 33,000 global consumers in 40 countries. Respondents were asked which delivery locations they had used in the past year and how often they had used them over that period. The most commonly used location was delivery at home at the door (used at least once in the past year by 86%), followed by delivery in the mailbox (78%) and post office (51%). Other locations were used by less than half of the respondents. Parcel lockers were used by 39% of the respondents and 17% responded that they have used lockers between 6 and 10 times over the last 12 months. In terms of consumer preferences regarding returns location, parcel lockers were the fourth most popular (a 2pp increase compared to previous year) – this was highest in Estonia, Poland, Lithuania and Finland.

The infrastructure and integration of logistics systems need to be improved to allow for a seamless cross-border delivery to a parcel locker. The parcel locker market is still dominated by private manufacturers which sell their hardware and software solutions to different e-commerce stakeholders, but in some cases it shows slow signs of change. In the Netherlands, for example, PostNL decided that a close partnership with a local hardware manufacturer was the right way to launch and expand their parcel locker network – this ensured that they could influence the hardware and software design better for their local market needs.

COVID-19 effect

COVID-19 and related lockdowns in various markets over the last year and a half have certainly had a large influence on growing e-commerce volumes. The mix of high street store closures due to anti-pandemic measures, online retail offers and early Christmas shopping all drove a 230% increase in parcels in peak period of 2020, from 1 million to 3.3 million items compared to the same period in 2019¹.

“We see that the pandemic has given a strong kick to other countries. In the region where we operate (Commonwealth of Independent States, Eastern Europe and Asia), over 20,000 parcel terminals were installed in 2020-2021. And the numbers continue to rise – says Ann Snitko, Head of Product Development at OMNIC.”

In the Netherlands, however, during the pandemic and during the lockdown especially “Home delivery was a lot more popular and so the usage of parcel lockers decreased slightly. What increased by a lot, however, was the use of parcel lockers for returns” – says Jean-Luc Otten, Business Development Manager, PostNL.

An increase in parcel locker usage for returns was noticed by InPost UK as well. Their ‘Instant Returns’ service was launched in March 2021 in response to calls from customers for retailers to make returns easier and to better fit around their lifestyles. This was reiterated in research commissioned by InPost – based on a survey of over 2,000 online shoppers.² All shoppers have to do is scan their QR code at the locker and put the parcel inside. Removing the need for labels means returns can be easier and faster. Fashion retailer Missguided is one of the first UK retailers to introduce the new service to its customers. A similar service exists in Denmark provided by the parcel locker manufacturer SwipBox with its Infinity locker model. Logistics provider Bring, one of the carriers on the network, was the first to offer first mile parcels via these parcel lockers.³

Approach to space sharing

A lot of companies who produce parcel lockers are essentially in the business of selling their units to public or private carriers. The lockers are then used for deliveries from a specific carrier, as in the case of Cleveron, Keba or InPost (in Poland).

However, there have been some efforts in the last couple of years, especially from SwipBox and InPost (outside of the Polish market), to promote the carrier-agnostic approach where more than one carrier has access to the same parcel locker network.

Carrier-agnostic approaches are certainly an interesting solution for last mile delivery for local governments as they can potentially increase the out-of-home coverage for all carriers and reduce the distance that any carrier fleet has to drive to deliver a full load of e-commerce items.

Some within the e-commerce industry voice their full support for the open network model – for example according to Last Mile Experts and UPIDO’s Out Of Home Europe report, this is the “go-to model”. Open networks have an advantage in four key areas: efficiency, proximity, speed of development and sharing benefits – the report explains.

Ann Snitko, Head of Product Development at OMNIC, a parcel locker manufacturer, has a similar opinion. “We believe in the agnostic model around the world, since it is very difficult for one carrier to provide a high level of PTD (Parcel Turnover per Day) on their own, which means that some of the cells are idle. In addition, in big cities, there is a struggle for locations and a reluctance of users (for example, in-residence buildings) to put 3-4 players at one location”.

In terms of cross-border deliveries, parcel lockers are severely under-utilised even though It seems that from the technical perspective everything is ready. “Opening up the parcel networks between neighbouring countries will be the first step in allowing more parcel lockers to be used for cross-border deliveries” – says Jens Rom, CEO at SwipBox.

An open parcel locker network is certainly a scenario that cities and municipalities would prefer. Their perspective is making sure that everybody has access to all parcel lockers within their area regardless of who delivers their parcel.

However, as much as it sounds promising, the current reality is complicated. For delivery providers, there are financial and other factors to consider regarding sharing locker space.

An open locker network is not possible in the case of DP DHL, for example, as its "lockers are well utilised and so it does not make business sense for us to open up the network. Full control of the network is also in the interest of our customers as we can ensure that their parcels are not rerouted due to the locker being filled with parcels from other delivery organisations.“ – says Corinna Glatz, Senior Expert at DP DHL.

Similar argument is mentioned in the Sustainability of the Last Mile Concepts report by Sesam as "carrier agnostic [parcel] lockers make carrier delivery less productive compared to carrier-controlled lockers. Any carrier will only have so many doors available per locker as is their market share. Drop rate will be far lower when using carrier-agnostic lockers." Taking these points into consideration, the scenario of dropping 25 or more parcels at an agnostic parcel locker with a 100 compartments would seem like a stroke of luck, even for the major carrier. 

Security and sustainability

Parcel lockers are perfectly suited to provide secure last mile delivery, especially during a pandemic where reduced physical contact is preferred by consumers and delivery drivers alike. To enhance the pick-up experience for consumers, some parcel locker providers offer the possibility to remotely open the compartment where their parcel is located – offered by InPost (in Poland) and SwipBox (with the Infinity model lockers) for instance. Others, such as OMNIC, released sterile parcel locker stations that sanitise lockers after each use. The sanitising module can be implemented in any self-service station. The company opened this technology to the public for free, even for competitors.

Parcel lockers can have other advantages, such as contributing to a reduced impact on the environment thanks to first-time delivery success and a reduced amount of individual routes that the courier has to follow. Some experts say that it all comes down to the density of the network and the type of goods that are ordered online, but the true sustainability equation is influenced by more factors.

Weather is a major factor in the adoption of parcel lockers and the sustainability of the solution. In markets with regular periods of extreme weather (warm or cold), parcels are likely to remain in the locker for longer times before being collected. And when they are collected, it’s likely it will be done using a car even for a trip of 500-1,000 metres.

Part of this willingness to pick parcels in a carbon-zero way can be due to culture of a specific market. In the Netherlands, known for its bicycle-centred lifestyle, „already 62% of the parcel locker users pick their parcel up on foot or by bicycle“ – says Jean-Luc Otten, Business Development Manager, PostNL.

In the UK, on the other hand, a study conducted by InPost between December 2019 to May 2020 on their parcel locker utilisation (only customers who collected or returned parcels from InPost Lockers outside Lidl stores) found that only 31% of consumers travelled to the locker by bicycle or on foot. 61% went by car or motorbike, but almost half (47%) of those shoppers also went into the Lidl store⁴. This means that 1 in 4 travelled to the locker by car or motorcycle for the sole purpose of visiting the parcel locker.

Ultimately, every market is different in its approach to parcel lockers – be it consumer preferences or carrier strategy – and so trialling a solution is a good idea in all cases. A good example of this is the trial of an ecozone in the Belgian city of Mechelen. In a study that bpost did in the city during the trial, it found that 85% of Mechelen residents went to pick up their parcels on foot or by bike. Only a small number of respondents took the car and two thirds of car users combined the pick-up with other business (trip chaining), such as a trip to the supermarket, school or work. 81% of users covered less than 500m to get to a parcel locker station. Bpost also recorded a satisfaction score of 9.3 out of 10 for the ecozone delivery concept.⁵

Putting this into perspective, however, makes one realise that parcel lockers such as these need a much higher density in order to accomodate the current and especially the future e-commerce volumes. The 51 parcel lockers across the city each consist of 13 compartments, providing only 663 parcel spaces in total and the scalability of the concept is still to be proven. Based on the success and the learnings bpost has taken from the pilot project, the city of Mons and bpost have decided to open a second Belgian Ecozone in Mons city centre.⁶

Lastly, when put to the test, parcel lockers tend to be associated only with „potential reductions“ of emissions when compared to the legacy door-to-door model. In the article ‚On the Impact of Open Parcel Lockers on Traffic‘ from the Sustainability journal⁷, the authors state that no general conclusion such as “a parcel locker will reduce the emitted CO₂” can be made. This is mainly since the individual surroundings and framework conditions have to be considered and there are a multitude of factors at play. The authors make another important point regarding lockers and their location, stating that „the main goal of (political) decision makers must be to promote sustainable pickup locations and prohibit pure cost-induced decisions like pickup locations at fuel stations or in industrial areas, which might be cheaper than those situated close to living areas.“

Peak season adaptability

Parcel lockers are not really built to serve the growth in e-commerce volumes during peak seasons such as the period from Black Friday to Christmas. Using incentives to pick the parcels up earlier and delivering several parcels for the same consumer into one compartment (such as multi-skrytka by InPost) can help a bit but will not solve this issue completely. In comparison, postal offices and other more traditional PUDO points would not be affected by the peak season limitations in the same way as parcel lockers would.

Locations

This will be harder and harder to secure in the future and a number of sources from the industry mention this as a current or future challenge. A definition of a good location is different depending on the type of locker, as some require electricity and ethernet access, while others only operate on batteries and use cellular data. One common requirement for a location is access to a large pool of residents or consumers (shoppers or commuters) and the possibility to scale up if needed. Provided that the parcel locker model is modular, you can always scale down if the actual usage is lower than anticipated. However, an installation setting which does not allow for scaling up (adding additional modules) can potentially stifle the location’s potential – more and more consumers would choose that location but their parcels would often be redirected to other lockers due to volume saturation. There are different strategies regarding what a good number of compartments is ideal to start with at an average location. SwipBox’s basic machine has 13 compartments and their strategy is high density. Omnic, however, has a rule that a parcel locker of less than 36 compartments does not make business sense “since the unit economy becomes unprofitable for logistics companies”.

An obvious location used to be at supermarkets and discounters, but due to COVID-19 and changing consumer habits, many supermarkets started BOPIS (Buy Online Pick up In Store), which requires additional personnel and space on site. “Using Click and Collect boxes for perishable food could significantly reduce operating cost of BOPIS, and thereby take the location away from carriers.” – says Jesper Okkels, founder of Sesam, an individual parcel boxes manufacturer from Germany.

State of play: country level

Australia

Australia Post launched their parcel locker system in 2014 together with MyPost Deliveries, a service that gives customers choice over exactly where their parcels get delivered. By registering for a MyPost account, customers can choose their closest or most convenient delivery point, whether to their home, a post office close to work or a Parcel Locker, with the flexibility to change it every time they shop. In June 2021, Australia Post had over 600 parcel locker stations, a 50% increase compared to previous year.⁸

Austria

Early in July 2021, the Austrian postal operator Österreichische Post AG officially launched a mega-parcel locker in the city centre of Vienna – with 900 compartments this locker is part of the wider concept of “post office of the future”⁹. The Austrian postal operator has a network of 400 parcel lockers. The city of Salzburg invested in InPost’s parcel lockers to create a network of alternative delivery points with an order for 1,000 lockers by 2024.¹⁰

Belgium

Currently, there are more than 300 parcel locker terminals in Belgium. The plans include expanding the network to 500 by the end of 2021.¹¹ Bpost’s objective is for the offer of alternative delivery locations to keep growing. A key part of that is developing the network of last mile points which are more sustainable and are available 24/7 – including parcel lockers.

Croatia

To date, almost 80 parcel lockers have been installed by Croatian Post. The parcel lockers are evenly distributed across urban and rural areas nationwide. By the end of 2022, a total of 300 parcel lockers will be installed across the country. Each of the lockers, reserved only for Croatian Post deliveries, will have 96 compartments, in various sizes: L, M, S, and XS. These parcel lockers will be manufactured in China and the software will be provided by the Estonian Post.¹²

Denmark

PostNord Denmark and Swipbox created a co-owned company, Nordic Infrastructure, which owned the network. The lockers were carrier and postal agnostic, offering DHL, Bring and PostNord the possibility of delivering through them. The lockers each consist of 13 compartments.

Earlier in 2021, PostNord acquired Swipbox’s 50% stake in Nordic Infrastructure as a way to step up its own Nordic e-commerce delivery network. This move also enabled SwipBox to solidify its strategy as they want to be seen as parcel locker provider and not the network owner or competitor in any market.

PostNord now has 2,950 of its own parcel lockers in the country. The company plans to have a total of 3,100 parcel lockers in Denmark by the end of 2021.¹³

SwipBox already has parcel lockers in more than 50 countries - the lockers are mainly concentrated in larger networks in Denmark, Sweden, Finland, Norway & Australia. By the end of 2021, SwipBox will have around 150,000 locker compartments around the globe.¹⁴

Finland

Finnish postal group Posti is investing in parcel lockers, a move driven primarily by a record-breaking e-commerce delivery orders, especially around the Christmas season.

As of early 2021, Posti has 2,200 parcel terminals containing more than 130,000 individual locker compartments and plans to add 10-15 new parcel terminals and hundreds of individual locker compartments per week. Posti estimates that expanding its network to over 200,000 locker compartments will be needed in the next few years due to e-commerce growth, with a significant number of the lockers located outside.¹⁵

PostNord currently delivers to shared network lockers, but a pilot project involving 100 of its own boxes in Turku and Tampere is planned for later in 2021.

Germany

Currently, Deutsche Post has over 7,000 parcel lockers across Germany and it plans to have 8,500 by the end of 2021. Its plans also include having over 12,500 parcel lockers in operation by the end of 2023. The current network of ‘DHL Packstation’ consists of lockers supplied by KEBA as well as lockers partly manufactured outside of the EU.¹⁶

The Netherlands

Instead of buying or renting existing machines from manufacturers, in 2017 PostNL decided to partner with a local manufacturer and software company to create a custom-made parcel locker and to have more influence on all elements of the production. The Dutch postal operator currently has close to 200 parcel lockers around the country. All lockers are carrier-specific, so only PostNL can use them. On average, the size of parcel lockers (amount of compartments) is increasing.[17] In a recent move, PostNL partnered with the supermarket chain Jumbo to trial the supermarket’s heavy footfall area for its parcel lockers.[18] In 2021, it also partnered with Albert Heijn supermarket chain in an exclusive deal with the e-retailer Bol.com. Consumers shopping at bol.com can collect their parcels from PostNL parcel lockers located at five different Albert Heijn stores.¹⁹

Norway

Posten Norge, the national postal operator in Norway, partnered with SwipBox on parcel locker front. In 2021, it will roll out 3,000 new parcel lockers in 1,000 locations.²⁰

PostNord has around 310 parcel locker stations in Oslo. The ambition is to have a total of 1,500 parcel lockers in the country by end of 2022, with locations in Bergen and Trondheim in use as well.

Poland

InPost is an independent postal services provider in Poland which offers secure parcel services via its Paczkomaty facilities. Currently, there are 13,000 InPost parcel lockers in Poland (an 85% YoY increase). Most parcel stations have 76 locker boxes (some have less and some have more) in three sizes, accessible 24/7.

A key development for InPost’s success in Poland was the partnership with Allegro, the largest Polish e-retailer in terms of market share. This partnership allowed Allegro to offer a wider range of delivery options while allowing InPost to ensure a relatively high and regular volume of parcels to their parcel lockers. This year, however, Allegro decided to complement its partnership with InPost. By the end of 2021 (most likely by end of summer), there will be 1,500 new parcel lockers owned and branded by the Polish e-retailer.²¹

Cainiao, the logistics arm of the Chinese e-retailer Alibaba, has also announced expansion plans for their parcel locker network in Poland. By end of 2022, it reportedly plans to add extra 7,700 parcel lockers to the current pool of 300 machines.

In 2019, the national Polish postal operator, Poczta Polska, started its collaboration with SwipBox. The Polish postal operator plans to have a total of at least 500 such points by the end of 2021, and as many as 2,000 in 2022.

SwipBox itself plans to install between 40,000-50,000 new parcel lockers (that’s more than 0.5m compartments) in Poland in the next 4-5 years. “Our goal is to create a dense network of small devices. Based on the example of Scandinavia, our Infinity machines are located 300-400 meters apart in highly populated places” - said Michał Czechowski in an interview with Business Insider.²²

^Portugal

Current locker network of over 100 lockers in Portugal is in an aggressive expansion, with a plan to roll-out over 1,000. After renting from existing lockers manufacturers, CTT decided to partner with a local manufacturers and software company to develop a custom-made local locker. The main focus is on developing the traditional e-commerce lockers on a public network of the postal operator. Average locker size is 33 compartments, completely modular. Lockers are deployed in different type of locations: shopping malls and commercial areas, supermarkets, laundry stores, mobility terminals (subway, railway, river transport), universities and hospitals. Other types of lockers are also being explored: refrigerated, residential, office lockers and click & collect. The currently carrier-specific network may be opened to other operators in the fututre, said CTT Correios.

Spain

Correos now has a network of over 5,000 differently-sized CityPaq terminals and collection boxes in major cities across Spain and other regions such as Canary & Balearic Islands. The most lockers are located in Madrid, where there are over 1,000 self-service points, followed by Barcelona, Málaga, Seville and Alicante. The number of locker compartments is 10 per locker on average. However, the CityPaq network is highly scalable as additional modules can be added or removed depending on demand.

Sweden

PostNord currently have 330 parcel lockers in Sweden, primarily in the large cities of Stockholm, Gothenburg and Malmö. The plan is to have 4,500 parcel lockers in Sweden by the end of 2022, covering not only the 30 largest towns but also rural areas.

A relatively new player on the Swedish market, called iBoxen, entered the market too. They claim that they will have coverage in the entire country by 2026 , with 50,000 lockers. The approach and model of lockers is very similar to the one from SwipBox and they claim that the entire network will be carrier agnostic.²³

Switzerland

In July 2021, there are close to 200 parcel locker stations in Switzerland (compared to 162 in June 2020). The My Post 24 network is using the KePol parcel locker system but the Swiss postal operator will be trialling solutions with other providers towards the end of 2021. The My Post 24 terminal in Bern Längasse, in the west of the Swiss capital, is the biggest parcel terminal in the country to date. The terminal features 221 compartments, with 9,000 households in the nearby vicinity being able to take advantage of the service. Customers can receive, send and return parcels and registered letters 24/7, placing shopping in the locker temporarily, or store keys at the My Post 24 terminals.²⁴

UK

Overall, InPost has a national network of around 1,500 fully automated parcel lockers in the UK, which are located in a variety of “safe and secure” locations including Morrisons supermarkets, Esso petrol stations and Transport for London sites. Its plans include having a network of 10,000 automated parcel machines across the UK by 2023.²⁵ The company works with a wide variety of partners, including well-known retailers such as ASOS, Boohoo, Holland & Barrett and John Lewis. InPost’s parcel locker network in the UK is accessible to courier partners such as UK Mail, DX, DHL Express, Hermes and APC Overnight.

The number of Amazon lockers in the UK is not public. Industry experts speculate that Amazon’s locker network may have around 5,000 machines in the UK and around 15,000 PUDO points in general.