E-commerce stymied by post office

E-commerce orders are being cancelled or redirected amid the slashing of country destinations offered by the Postal Corporation, operator of Jamaica Post.

The postal service, which delivered to about 200 countries using surface and airmail shipping methods prior to the pandemic, had cut its service to just 50 countries last May, and reduced that even further this month to about 10 nations.

The retreat is happening at a time when e-commerce is on the rise and small entrepreneurs are in need of an affordable and reliable shipping partner to deliver on overseas orders. For many, that has been Jamaica Post.

“These post office restrictions have affected our business,” said Rory-Craig Walker, CEO and founder of Jamaican Care Packages Limited.

Walker said that in the past few months, his company has had to “cancel and refund numerous orders” from Japan, China, Switzerland, Spain and many more countries because packages just couldn’t be shipped to those destinations.

“We know that Jamaicans are practically everywhere and miss that connection to home, so not being able to fulfil these orders has caused issues. It’s rather hard to tell a Jamaican abroad that we can ship to certain countries but not their country,” said Walker. “We had to resort to other methods to getting our care packages to these customers, by using international and more expensive shipping options such as FedEx, and also shipping from the United States, which shouldn’t be the case.”

Most Jamaicans use the post for letters or for collecting inbound packages from online selling platforms. Some micro sellers, however, sell on their own sites or join sales platforms such as Amazon, eBay and Etsy. Yet others use social platforms such as Instagram, Snapchat and TikTok to trade. They, however, all use the postal office or rapid courier services to fulfil orders. That’s because, in general, the post office offers a reliable, affordable and secure shipping method that allows for tracking online, in most cases.

These sellers generate millions of dollars, individually and collectively, based on anecdotal tabulations of the public records on some of these platforms, which saves past orders. Reggae vinyl, Jamaican vintage coins, castor oil, coffee, sea moss and snacks are some of the goods finding their way to homes around the world; at least, prior to the pandemic.

A vinyl seller, who gave his name as Nile, said that he had orders for over a year destined for Scandinavia.

“That customer is patient,” he said, adding that others are not willing to wait.

A single vintage vinyl record that most discard holds value overseas. They generally sell for US$30, but others sell for hundreds if not thousands of US dollars, based on public auction records on selling platforms. Although there’s a vinyl market in the USA and UK, often there are serious collectors in Japan, Europe, Brazil and Argentina. It means that for Nile, much of his sales have been in decline since the pandemic.

“I don’t know what’s going on with them,” Nile said regarding Jamaica Post’s truncation of its foreign delivery routes.

Currently, Jamaica Post offers its core outbound air and surface services to the United States, Canada, Great Britain only in the United Kingdom, The Bahamas, Antigua & Barbuda, Guyana, Montserrat, St Vincent & the Grenadines, Suriname, and St Lucia.

It does not deliver to Trinidad & Tobago, despite that being the hub for its main cargo carrier in the region, Caribbean Airlines.

Earlier in January, the Financial Gleaner attempted, unsuccessfully, to send a package to Trinidad via Jamaica Post’s core air or surface methods. The only method available to Trinidad and other parts of the world not on its updated list was via its top-tier service Fast Track, which partners with global courier DHL.

Sellers complain, however, that the cost to send things by rapid courier mail can surpass the value of the item being sent, thereby making it uneconomical. For instance, it costs $350 and $500 for surface and airmail, respectively, to the United States for packages weighing less than one kilogram. Fast Track prices, on the other hand, start at $6,800, according to the Jamaica Post website.

Last May, Jamaica Post offered outbound shipments via its core air and surface methods to 50 destinations, according to formal notices in post offices and on Jamaica Post’s website that were seen and tabulated by the Financial Gleaner. Prior to the onset of the pandemic it offered shipments to the world via its core methods.

“Outbound shipments continue to be adversely impacted by the effects of COVID-19, despite our efforts to resume sending shipments to all the usual destinations. We continue to work with our airline partners and other stakeholders to regularise our services,” Jamaica Post said in a notice last May.

The postal service did not immediately respond to requests for comment on the rationale for the reduction in outbound destinations. A source indicated, however, that it was likely related to the cost of air freight, which has been soaring alongside the rising cost of oil since 2022 amid the war in Ukraine and sanctions on Russia. This has served to push the cost of cargo beyond the ability of Jamaica Post to absorb, in the regions it has suspended, the source said.

That said, Jamaica Post has been increasing the price of its Fast Track rapid service over time. But it hasn’t increased prices for its core air and surface mail for well over a decade, despite the local dollar losing 50 per cent of its value during the same period. The exchange rate in 2013 was about $100 for each US dollar; now, in January 2023, it’s hovering at around $153.

Back in November, the Postal Corporation hosted a regional conference to address some of the concerns, dubbed the ‘Caribbean Transport Hub Think Tank Meeting’. It described it as an initiative in response to the “lengthy delays that tend to be experienced by mail transport operators and customers in the Caribbean region”.

Currently, there are only six airlines that are widely used by regional postal administrations, with Caribbean Airlines being the main partner, Jamaica Post stated. Additionally, mail transportation in the Caribbean region often exceeds seven days from one airport to the other, thereby impacting the global end-to-end quality of postal services.

Outside of Caribbean Airlines, Jamaica Post revealed that it has transported mail via Air Canada, British Airways and American Airlines, at least in the past.

The transport hub think tank group, which includes representatives from the Universal Postal Union and the Caribbean Postal Union, aims to implement a multi-hub concept as a solution to this perennial logistics challenge, according to previous post office statements.

The multi-hub will be operated by Antigua & Barbuda, Barbados, Jamaica, St Maarten and Trinidad & Tobago. The benefits to be derived from its implementation include a wider postal network and, ultimately, better customer experience, Jamaica Post says on its website.

Jamaica Post handled 25.1 million units of mail in 2021, down 11 per cent from 2020, according to the latest version of the Economic and Social Survey Jamaica published by the Planning Institute of Jamaica. This includes inbound and outbound movements. The number of parcels, which is the main method used to mail goods, dropped to 115,000 units from 187,000.

“The overall out-turn was affected by the impact of the COVID-19 pandemic,” the report stated.

The postal service, meanwhile, recorded a deficit of $1.53 billion for the 2021 fiscal year, compared to a deficit of $1.6 billion a year earlier and $1.18 billion in 2019.

steven.jackson@gleanerjm.com