Postage (International)

Postage (International)

The Project undertaken involved supporting an eCommerce client who has a large customer base outside of the UK and is therefore dependent on a number of UK-based postal suppliers who manage in-market final mile carriers. Price pressures following both the COVID-19 pandemic (reducing air traffic) and the completion of the BREXIT process meant Staverton was engaged to evaluate costs.


Proposed Project Objectives

Create baseline data – by working with the client’s Finance Team, a baseline data set was created to model the destination country and average parcel weight. Outlier analysis was then completed to ensure that large packages didn’t drive extra cost.

A commercial tender was then launched – given the rapidly changing cost base of international postage over recent years, a market tender was viewed as the best way to establish new baseline costs per country lane. Suppliers were pre-qualified and then invited to tender.

Scenario-based negotiations and award – using baseline cost data from the initial market test, Staverton were then able to engage with suppliers on a direct basis and negotiate different supply scenarios e.g. EU based country lanes vs. non-EU countries and beyond. Parcels of business were created and these were then tendered finally to suppliers who were successful through the first market test.

1: Provide cost certainty for the year ahead – following a period of market shocks, it was important to stabilise pricing for a fixed period of time.

2: Fully understand the cost implication of moving key markets to a ‘tracked’ postal service – in order to reduce customer complaints.

3: Provide a comprehensive view of the postal market cost base – so that the client could take advantage of further improvements in air traffic (driving cost reductions).


By utilising a multi-step tender process, Staverton was able to establish baseline cost drivers quickly before re-invigorating competitive pressures with direct, scenario-based negotiations.

This meant the client both saved money vs. pre-market shock pricing and avoided price increases that had been tabled by existing suppliers. What’s more, pricing was fixed with review dates to review downward pricing pressures as the impact of COVID-19 fully abates.

Additionally, certain country lanes were upgraded to tracked services to alleviate customer service issues.

Annualised Savings

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