Study on the economics of the cross-border B2B2C delivery market 

Questions 

Answers

The Call for Tenders requests the involvement of three consultants in this project. Are they supposed to be available throughout the whole 8-months project and what is expected level of engagement e.g. full time / part time?

The CFT specifies that “bidders not operating as an independent consultant [i.e. companies] should propose at least three individual consultants in accordance with the requirements specified in this call for tenders for the performance of the services and activities described herein.” 

Does UPU anticipate additional travel for interviews or face-to-face meetings with DOs?

The bidder specifies the proposed methodology to conduct the study. Please note that the UPU does not anticipate travel and does not reimburse for any travel related costs. The quoted price shall thus be all-inclusive and include any travel and/or other activities that the vendor may undertake for the purpose of the study. Interviews could be done remotely an so can the presentations of the findings of the study at the Council of Administration (CA) in as under phase 4 and 11 of the delivery and payment schedule in section 3.7. These presentations can be delivered remotely via the remote participation platforms used at the meeting (the CA conducts its meetings in hybrid format using a remote participation platform). As such, no travel and related expenditure could be avoided. Physical presence at the relevant CA Committee meeting is possible without reimbursement of the related expenditure.

What data, on the subject of the project, is planned to be made available to a contractor?

The UPU, more specifically the International Bureau of the UPU (UPU IB), will provide, upon request from the vendor, any relevant information to the vendor to the extent that such information is available and subject to data protection, data confidentiality and other requirements. Such information could include postal statistics and any relevant research material, as far as available. It should be noted that the development and growth of the B2B2C delivery model is considered an emerging trend of which limited information is available which is the reason for the UPU to commission the study. 

The UPU IB staff, including experts in postal statistics and research, transportation, customs, remuneration, product development, quality of service and other operational areas, will make itself available for consultation. To give one example, the transport and customs expert could review, complement and make recommendations concerning the description of operational and freight models by the vendor. Upon requests by the vendor, UPU IB staff will make itself available for interviews and for the provision of any relevant background information, for example on postal operational processes. The vendor may approach third parties to obtain information by clearly stating the purpose for the collection and use of that information. UPU IB staff may be able to facilitate contacts with designated operators or support the vendor in the collection of such information to facilitate and ensure the confidential treatment of data. 

In point 4 of paragraph 4.1, you mentioned a "detailed overview of main operational difficulties." Do you expect one of the designated consultants to have an operational background in the postal / parcel industry? 

Under point 4, the consultant is expected to provide an overview of existing end-to-end operational models and processes of B2B2C shipments, which includes any observations in terms of operational difficulties and legal bottlenecks in how to operate B2B2C shipments, these operational challenges could concern the infrastructure, the operational issues around handling containers and the interoperability between cargo and postal handling of items, including the handling of different manifests or the requirements for customs clearance, etc. 

In point 4 of paragraph 4.1, you mentioned a "detailed overview of existing legal bottlenecks."  Do you expect one of the designated consultants to have a legal background in the postal industry?

There are is no specific requirement for legal background for the consultants. However international postal and cargo traffic is subject to regulatory requirements as the shipments cross international borders. Domestically a specific regulatory framework may apply for items that are inserted into the domestic postal network. It is expected that the study not only provides insight into the operational challenges, but also provide an overview of the legal or regulatory issues and/ or challenges of how the traffic is to be handled in particular where it moves across borders as cargo and is presented as postal in the domestic network. 

If we submit a bid over the 50k CHF threshold will it be rejected?

Bids over the ceiling of 50,000 CHF are automatically disqualified. 

In chapter 2 the RDP states

'“Bidder” shall refer to any person, company or legal entity submitting a proposal.'

In paragraph 4.2 the RDP states

'Bidders shall be consultancy firms, or one or more individual consultants,'

However, the RDP is not clear on how a group of individual consultants should structure the proposal documents in such a way that they are acceptable to the UPU selection process for this tender.

Our company acted as vendor in similar tenders, whereas we used the services of independent experts in our network. The work was conducted and led by our company, the experts stayed independent and had a contractual relationship with us. Would this be acceptable for this RDP?

Can the UPU please clarify?

This would be acceptable. Should your company be successful in the selection process then the contract would be concluded with your company. The relationship with individual contributing consultants would be considered as an internal matter. The commitments to be specified in the contract are between UPU and the successful bidder. 

in paragraph 3.5 the RDP states

'Bidders shall provide an all-inclusive pricing structure applicable throughout the contract period.'

In paragraph 4.8 the RDP states

'Bidders shall also confirm that their tender covers all costs associated with the provision of the services referred to herein. Any other costs to be incurred by the Vendor, including any travel and subsistence costs incurred in the provision of the services at locations other than its own premises and specifically designated by the UPU, shall be subject to the prior written consent of the UPU.'

The RDP also indicates already one presentation at the BERNE offices of the UPU and attending related committee meetings in S3 (this is May 2023) and S4 (this would be November 2023).

Should travel and expenses for that presentation be included in the price to be submitted as part of the proposal, or does the UPU expect to handle the travel & accommodation costs for that presentation separately (in line with what is stated in paragraph 4.8)?

We assume that other travel and expenses necessary to meet UPU requirements will not need to be included in the all-in price and the procedure of prior agreement and written consent by UPU will be applied.

Can UPU please confirm? 

The price shall indeed be all-inclusive and therefore include all services as specified in the RFP, including the presentation of the results at the Council of Administration (CA), and therefore no separate (or additional) compensation or reimbursement of travel and other expenses is foreseen. However, please note the following: the reference to the physical location of the CA meetings in Berne as mentioned in the RFP do not require the physical presence of the vendor at those meetings as the CA conducts its meetings in hybrid format using a remote participation platform. The presentations of the results as under phase 4 and 11 of the delivery and payment schedule in section 3.7 can therefore be delivered remotely via the remote participation platforms used at the meeting. As such, travel and related expenditure could be avoided. Physical presence at the relevant CA Committee meeting is possible without reimbursement of any related expenditure.   

In chapter 2 scope of the call for tenders has been limited to the cross-border B2B2C delivery market

‘The study will focus on trends and developments in terms of operational models and the pricing of services in the business-to-business (B2B) and business-to-consumer (B2C) segments of the international delivery market, including cargo, courier and postal services. In particular, it should examine operational models (processes) and pricing strategies in relation to e-commerce items shipped under the B2B2C model (see section 2.4 below)’ and further ‘the experience of these designated operators should serve as a valuable reference for the development of the operational models (transportation of goods) and freight models (transportation of goods with financial elements) associated with the aim of this study’.

Will the UPU make “valuable references for the development of the operational models and freight models associated with the aim of this study” available, when they have been already studied or presented by designated operators, other participants of the UPU meetings or experts to the UPU? When approaching third parties engaged in such operational models, may the vendor use, in close alignment with the UPU, the fact that the vendor has been commissioned by the UPU to study any operational model for the benefit of the study?

Can the UPU please confirm?

The UPU, more specifically the International Bureau of the UPU (UPU IB), will provide, upon request from the vendor, any relevant information to the vendor to the extent that such information is available and subject to data protection, data confidentiality and other requirements. Such information could include postal statistics and any relevant research material, as far as available. It should be noted that the development and growth of the B2B2C delivery model is considered an emerging trend of which limited information is available which is the reason for the UPU to commission the study. The UPU IB staff, including experts in postal statistics and research, transportation, customs, remuneration, product development, quality of service and other operational areas, will make itself available for consultation. To give one example, the transport and customs expert could review, complement and make recommendations concerning the description of operational and freight models by the vendor. Upon requests by the vendor, UPU IB staff will make itself available for interviews and for the provision of any relevant background information, for example on postal operational processes. The vendor may approach third parties to obtain information by clearly stating the purpose for the collection and use of that information. UPU IB staff may be able to facilitate contacts with designated operators or support the vendor in the collection of such information to facilitate and ensure the confidential treatment of data.  

Currently, is there a UPU offer on B2B2C products / services ? 

Early research shows that an increasing volume of e-commerce generated items move across borders as cargo (B2B) to warehouses in destination markets from where e-commerce orders are fulfilled. The international cargo traffic takes place outside the UPU postal network which is predominantly focused on the exchange of postal items rather than bulk/ cargo movements. Currently there is no UPU service that supports or implements the B2B2C model. The insights and information obtained from the study will feed into the work of working groups of the Postal Operations Council that are identifying a possible product response to these developments, but currently no such product/ service exists at the level of the UPU. 

What is the Data from UPU that can be used as input for this study ? Does UPU have access to a database of the B2B2C Products used by designated operators ? If yes, does UPU have access to volume / prices ? 

The UPU does not have specific B2B2C data and the objective of the study is to obtain information about the market and the operational requirements for implementing a B2B2C model. The UPU does not have the volumes and prices of international cargo shipments (the B2B segment of the model) and the purpose of the study is to obtain such information. 

The UPU, more specifically the International Bureau of the UPU (UPU IB), will provide, upon request from the vendor, any relevant information to the vendor to the extent that such information is available and subject to data protection, data confidentiality and other requirements. Such information could include postal statistics and any relevant research material, as far as available. It should be noted that the development and growth of the B2B2C delivery model is considered an emerging trend of which limited or no information is available which is the reason for the UPU to commission the study. 

The UPU IB staff, including experts in postal statistics and research, transportation, customs, remuneration, product development, quality of service and other operational areas, will make itself available for consultation. To give one example, the transport and customs expert could review, complement and make recommendations concerning the description of operational and freight models by the vendor. Upon requests by the vendor, UPU IB staff will make itself available for interviews and for the provision of any relevant background information, for example on postal operational processes. The vendor may approach third parties to obtain information by clearly stating the purpose for the collection and use of that information. UPU IB staff may be able to facilitate contacts with designated operators or support the vendor in the collection of such information to facilitate and ensure the confidential treatment of data. 

Is the scope all goods, whatever the delivery product : delivered by letter-post, small package and parcels (for the B2C segment, done designated operators) ? 

The scope is where e-commerce generated items are moved as cargo (B2B) across borders and presented to the postal service provider for final delivery from warehouses. It is possible that there are variations of such models where the B2C processes are regional or where other delivery agents (other than the universal postal service provider) are involved in the final delivery process. There are differences in how the postal delivery services are provided in each country, possibly based on the operational network where items are sometimes delivered as parcels sometimes delivered through the letter mail delivery network. The focus is specifically on the cross-border aspect of the service (i.e. cargo) and to the interface of the cargo transport with the domestic delivery network.

What geographical cover do you expect ? I assume you would expect a global vision. If so, could you precise a segmentation of the world market (Our suggestion : North America, LATAM, EU, Arabic Countries, Africa, APAC). Do you recommend markets, which have major disruptors ? 

Indeed a global coverage is expected with highlighting a number of important links between regions, for example containerization of items in the Asia-Pacific region for cargo transportation to another region (say Europe or Africa). The study should give insights in some of the existing practices and applicable rates/ costs that apply in the cargo segment in the different B2B2C models. 

How many designated operators and private careers do you expect to see in the analysis, notably to dress the market trends per geographical zone ? (Our suggestion : 2-3 designated operators and 2-3 careers per area mentioned above)

The study should involve a number of different flows between different regions. There are no specific criteria, combinations between different regions/ operators/ cargo carriers could provide sufficient insight in the developments, pricing and operational models applied in the market. 

Does the analysis only focus on end-to-end B2B2C services ? Or do we include the B2B / B2C segment, used by players to address a part of the B2B2C e-commerce flow ? 

The study should cover the full market and provide insights in which operational models apply. There may be integrated B2B2C solutions or different combinations of B2B (cargo) and B2C (warehouse to addressee) operational models. The objective of the study is to understand the models that exist in the market. 

What granularity do you expect for the costs and pricing done by the players ? Do you expect the pricing for all the product combinations available for one player, or an illustration of the 2-3 most representative products sold by a player is enough ? Getting the actual costs and pricing strategies is somewhat problematic due to commercial confidentiality at a customer level. Indicative pricing can be implied from changes over years. Segmentation is especially important.  Does UPU will help to gather relevant data and/or contacts on this ? 

The objective is to obtain a better insight in how cargo for B2B2C is priced, including the most common pricing practices, to understand how the cargo services are prices, i.e. by container, by weight, or other factors and how that translates to pricing per unit (parcel, receptacle, container). Under point 5 of section 4.1, see underlined where it is specified that the study should give an overview of operational models, pricing and remuneration practices and corresponding remuneration for key flows, including price estimates (or price ranges) for each standardized unit (see item above on metrics to estimate average pricing). It is understood that actual pricing depends on many factors and are commercially negotiated and/or subject to confidentiality obligations. However, the idea is to obtain estimates or price ranges to obtain a global understanding and to have a benchmark for possible remuneration of future postal cargo or postal B2B2C services. 

Regarding the UPU's product remuneration : are you talking about terminal dues,  inward land rates and transit charges ?  Or, do you imagine something different/new ? 

Something different or new. The current UPU remuneration systems remunerate existing postal products which are item-level services between two DOs. The remuneration for B2B2C, including cargo, are not expected to be related to any remuneration system for the possible B2B postal cargo segment. The study results should give indications on the principles and/ or price ranges that could be appropriate for such as service, including remuneration by which unit (weight, item, container, volumetric, …?) and the factors that would determine a possible remuneration. 

We wanted to find out if the study is country specific as this would inform our approach .

The aim of the study is to obtain insights in processes and costs of moving e-commerce generated items as cargo across borders to warehouses from where the items are inserted into the national postal network for final delivery. The scope of the study is thus international and not specific to any country. However, the study would focus on certain trade links between different regions as specified in section 4.1 of the CFT: “estimation of the abovementioned metrics for the major trade links between different regions of the Americas, Europe, Africa and Asia-Pacific”. It may provide examples of existing B2B2C models involving an origin country in one region and a delivery market in another country/region and hence it may be more correct to refer to the costs and operational practices of specific flows (rather than a national study).