SINGAPORE -- Ailing logistics operator Singapore Post is betting on new technology to help lift the company out of the doldrums following an ill-fated North America expansion that has so far cost more than $180 million.
Touting the world's first mail system that can track ordinary mail from start to finish, Vincent Phang, SingPost's CEO of postal services, said the company had invested a significant amount of time and resources toward addressing service lapses.
"As a company, as an organization, we continue to make investments in innovation," Phang told Nikkei Asian Review in an interview. "We do that every year, we do that on an ongoing basis. This is all part of that."
In March this year, Singapore's industry regulator imposed a fine of S$300,000 on the company for failing to meet standards relating to the delivery of some letters and registered mail in 2018.
SingPost, whose major shareholders include Singapore Telecommunications and China's Alibaba Group Holding, showed off its 'smart letterbox' prototype -- which can distribute mail and notify customers when mail is ready for collection -- last week after its money-losing U.S. subsidiaries filed for bankruptcy protection.
SingPost entered the U.S. market in October 2015, making its largest-ever acquisition with purchase of majority stakes in TradeGlobal and Jagged Peak as part of its vision of building an e-commerce logistics network and technology platform that would cover Asia, Australia, continental North America and Europe.
While Phang would not comment on when the new technology would be deployed, or how much the company had spent on its development, he said the investment in new technology would help the company meet future challenges and address the changing profile of mail deliveries.
Abhineet Kaul, director of public sector and government at global research and consulting firm Frost & Sullivan, believes that while SingPost's proactive efforts could help change the short-term narrative, the company still needed to demonstrate how it can monetize innovation.
"SingPost has been a pioneer in terms of adoption of technology and new business models across the world," Kaul said, adding that it was uncertain how the company's bets on smart technology would impact the bottom line.
"It could help in enhancing customer delight and reduce pressure from the regulators to meet service standards, but beyond that it is not clear whether this will lead to higher revenue or lower costs," Kaul said.
Last week Earlier Tuesday, SingPost said it suffered a net loss of S$75.1 million for the fourth quarter ended March after one-off losses swelled due to an impairment charge of S$98.7 million for TradeGlobal and Jagged Peak.
Operating losses from the e-commerce segment widened to S$51.9 million in the full year ended March from S$19.6 million in the previous year. Net profit for the year plunged 86% to S$19.0 million, while underlying net profit fell 5.8% to S$100.1 million, below the consensus estimate of S$105.60 million.
SingPost shares were trading at S$0.98 yesterday, below the 12-month high of $1.14 reached in October last year.