3 Key Reasons Why Singapore Post Limited’s New Regional eCommerce Logistics Hub is Important for its Future

Singapore Post Limited (SGX: S08) launched its Regional eCommerce Logistics Hub (dubbed “eComm Log Hub”) today. There might be a few reasons why investors may want to take note of this new development.

In Singapore Post’s latest annual general meeting held this July, the company’s chairman Simon Israel said that its traditional postal business is facing the threat of digital disruption.

With that in mind, Israel stressed that it is important for Singapore Post to find new and alternate sources of growth and profits to build a sustainable business.

With the opening of its eComm Log Hub, Singapore Post may be taking another step in its search for new sources of revenue.

It’s scalable

As part of the opening of the new hub, Israel said:

“Our Regional eCommerce Logistics Hub leverages on this geographic and infrastructural advantage. Everything in this building is scalable, which means we can keep upgrading it to meet the needs of the future.”

Israel also mentioned that Singapore Post’s eCommerce logistics network now spans 19 markets across Asia Pacific, Europe, and the US. The eComm Log Hub will tap on Singapore’s regional connectivity to grow.

It’s automated

The eComm Log Hub is a three-storey facility with two warehousing floors and an office block. From Singapore Post’s press release:

“Automation plays a big part in the eComm Log Hub – beyond the fully automated parcel sorting system on the first floor of the facility, the second floor warehouse is also automated, resulting in the entire eComm Log Hub being integrated end-to-end from the eCommerce front-end platform to delivery.

The eComm Log Hub will process parcels for delivery within Singapore and those to be shipped to destinations worldwide.”

A shortage of labour is one of the key issues confronting Singapore’s economy. Automation may reduce Singapore Post’s reliance on labour.

It’s a nod to the future

On another note, Israel shared insights on how Singapore Post views the future:

“With the Regional eCommerce Logistics Hub, our POPStation network and our investments into technologies for new postal and logistics solutions, we are prepared for a sustainable future of car-lite cities and the sharing economy.”

The POPStation network is Singapore Post’s solution for last-mile delivery. More importantly, Singapore Post envisions a future in which cities might have less cars on the road and where resources will be shared. The firm believes that its logistics solutions will fit into its vision for the future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.