Kazpost delivers cutting-edge services after five-year transformation 

NUR-SULTAN – Kazpost, which began updating all of its services and processes five years ago, has seen a tremendous spurt in development. Kazpost Chair Saken Sarsenov spoke with The Astana Times about the company’s achievements in e-commerce, privatisation in 2020, using drones to reach remote villages and efforts to reduce the ecological impact of its vehicles.

Kazpost Chair Saken Sarsenov. Photo credit: Sergey Nagaibekov.

“Yes, it really was the old postal system, the old infrastructure with the Soviet processes. (Until five years ago), nothing had changed. (In updating the work of the postal service), we moved in two directions – we changed the processes themselves, then automatised and digitised (them),” he said.

Several years ago, parcels travelled 16 days to reach certain localities, but Kazpost has reduced maximum delivery time within the country to four-six days. The expedited distribution is the result of entirely revised activities, such as a new sorting line with round-the-clock processing and a capacity of 6,500 departures per hour, new fulfilment centres in the capital, Almaty and Aktobe, increase in air transport deliveries and automatising processes like receiving, sorting and issuing parcels.

“For example, starting this year, when our operators accept a package, they no longer manually enter the data of all customers each time; the information is automatically self-filled. This reduced the time to receiving packages and correspondences by 40 percent,” he said.

Along with developing as a company, Kazpost installed a complete infrastructure to develop other businesses in the country.

“Development of e-commerce is one of our priority tasks. Recently, the export procedures were eased. The new law significantly simplified forming international customary documents. The ‘window’ for sale of Kazakh products is open,” said Sarsenov.

To date, the company has opened four e-commerce centres in the capital, Almaty, Karaganda and Shymkent. All small and medium-sized enterprises (SMEs) are trained in the basics of e-commerce and procedures for operating in world markets.

Approximately 1,500 SME representatives were trained in 2018 and this year, the number has risen to more than 2,000. Kazpost offers continued support to all entrepreneurs after training.

The centres provide services for 57 online stores, such as offering advice on ways to promote their shops including by creating websites, selling on social media platforms and renting contact centres, as well as facilities for receiving, storing, sorting and delivering goods.

Privatising in 2020

Kazpost is among the companies to be partially privatised in 2020. Samruk Kazyna Sovereign Wealth Fund is currently its only shareholder. 

“Since the beginning of 2019, our shareholder has already held a number of investment roundtables, including in Dubai and Beijing, with the goal of promoting portfolio companies… We will continue to present the assets and strengths of the company,” said Sarsenov.

“Another step towards privatisation is improving the corporate governance rating. According to the results of an independent external assessment in 2018, the rating of Kazpost’s corporate governance rose to the level of BB. The company is successfully implementing a plan to improve corporate governance and plans in 2020 to improve it to the level of BBB. We believe such a level is an indicator of readiness for privatisation and maturity of corporate governance processes in a company,” he added.

Kazpost is developing new projects to improve its investment attractiveness and profitability. One project is enhancing transit and bonded warehouses, as transit and e-commerce growth potential are attractive to investors.

“We will actively develop both domestic and cross-border e-commerce and support the development of SMEs by offering to work with us on the franchise model. I am confident the successful implementation of these initiatives will have a positive impact on the privatisation process,” he said.

Drones deliver parcels to remote villages

Although many people were originally ready to criticise the idea of using drones for postal service, the unmanned aircraft have been demonstrating good results. In 2017, Kazpost used drones to launch a correspondence provision project to remote rural offices.

“We are very pleased with the results,” said Sarsenov. “There are mountainous rural areas (where the distance) from the regional centre to a village is 40 kilometres, while driving to it on a serpentine route is 150-170 kilometres. Also, it happens in winter in severe weather conditions, when the rivers freeze and roads get blocked and no land vehicle can drive to that destination.”

Two years ago, drones transported 1,150 kilogrammes of correspondence, travelling 16,000 kilometres in 460 hours. In 2018, the figures increased nearly 13 times. In the past year, Kazpost transported 16 tonnes of periodicals; the drones spent the same 460 hours in flight yet covered more than 74,000 kilometres.

The company uses drones to deliver correspondence to 150 locations in the Almaty, East Kazakhstan, Karaganda, Kostanai, Turkestan and Zhambyl regions. This year, delivering periodicals by drones will be available in all areas.

“This means, for example, that readers in remote villages receive newspapers on the day they are released and not late. They don’t have to wait until the land transport arrives. The advantage of drones is high mobility, independent of the quality of roads, and low energy consumption. But I want to note that they do not replace the work of postal employees,” he said.

Addressing environmental impact 

Drones run on electricity, making them an eco-friendlier means of delivery than gasoline-powered vehicles. As one of the biggest delivery services in the country, Kazpost is aware of the impact of each delivery on the environment.

“Kazpost, in its part, is doing everything possible to reduce emissions, while maintaining the availability of services. In particular, we have significantly reduced the use of non-ecological fuel such as coal to heat (Kazpost) branches. In addition, on ‘the last mile,’ we transferred delivery to an ecological type of fuel for our transport fleet, which affected the reduction of emissions and the reduction in the use of gasoline and diesel. In addition, we gave bikes to postmen, from which there is absolutely no harm to the environment,” said Sarsenov.

For regular deliveries within Kazakhstan, Kazpost tries to maximise the transport load in order to reduce the cost of fuel per package. International parcels and express deliveries, however, require airplanes that emit nearly 90 kilogrammes of carbon dioxide per hour of flight. 

“But airplanes, with every age, also become more economical and aviation fuel is also trying to be less harmful. At the same time, emissions are not so significant. The last mile is much more affected by how a department works. In these directions, Kazpost is constantly progressing,” he noted.

The company is continuing to carefully study the possibilities to reduce future environmental impact.  

“It is likely that with the development of technology, their availability and economic efficiency, we will use autonomous and all-electric machines, robots and drones to deliver over ‘the last mile’ and solar energy for the rest of our needs. I believe green technology has a future and it is only a matter of time,” he added.