Brazilian Post boosts tech investment to respond to e-commerce growth

The service is ramping up spend in tracking and automation to stave off competition and improve customer service.

Brazilian postal service Correios has a multimillion-dollar technology investment planned to support a transformation project intended to respond to e-commerce growth.

The yearly investment of 200 million reais ($51 million) aims to change the negative perception of Correios from the general public and businesses - nearly half of Brazilian e-commerce sites perceive the service as bad or awful, according to the Brazilian Association of Electronic Commerce (ABComm).

Improving internal efficiency and customer service at the government-owned postal system has become crucial, since 55 percent of its business comes from parcels, with an increasing number coming from overseas.

"We are looking to do more business and operate in a competitive market. In fact, we want to be the first choice of logistics operator in Brazil," the president at the postal service, Carlos Alberto Fortner, told delegates at the EBANX Summit on cross-border online commerce in Curitiba today (3).

Technology investments include a series of initiatives including the rollout of RFID tagging for all parcels to improve tracking - one of the biggest issues faced by the service - by next year.

According to Fortner, the project is currently on trial and is developed by the Center for Excellence in Advanced Electronic Technology, CEITEC, a government institution which, like the postal service, is linked to the Ministry of Science, Technology and Innovation.

"We discussed possible ways [CEITEC] could help us and the project made total sense since we are under the same Ministry. But it will be a very large-scale project and key to the improvements we want to make," Fortner told ZDNet at the event sidelines, adding that about 1.2 million tags will need to be produced daily to meet the demand of the postal service.

In addition, technology investment will also be required to support automation of the processes related to parcel handling, including the 50 new sorting machines aimed to speed up processing.

As well as having to deal with losses of 2.5 billion reais, Correios has to fend off competition: according to Fortner, there are some 200 companies of all sizes providing parcel delivery in Brazil at cheaper rates than Correios - that means modernizing is an imperative.

"We need to make improvements to the operation but above all, we need to change the mindset of the entire operation - either we think and work like a private company, or we are out," the executive said.

Angelica Mari traveled to Curitiba as a guest of EBANX.