The encyclopedia · Strategy & Leadership · Strategic decision · 2013–2016
La Poste proved merging mail and parcel saves ~3% per city
A mixed-integer model of Nantes showed merging mail and parcel urban delivery yields about 3% cost benefit, robust across scenarios.
La Poste
the move
La Poste delivered mail and parcels in cities through two separate networks, and management suspected they could share routes.
The team built a mixed-integer linear program that determines the optimal network structure (direct, indirect, or hybrid) and approximates routing cost at scale.
Applied to the city of Nantes, the model showed merging the networks yields cost benefits of about 3%, robust across the scenarios tested.
why it works
- The model handles realistic large-scale network problems.
- It evaluates direct, indirect and hybrid structures, not just whether to merge.
- The ~3% benefit held across multiple tested scenarios.
- It gave management the evidence to reorganize around one urban network.
what transfers
When you suspect two networks should share routes, model the merged structure's routing cost first; the model tells you whether you'll actually save.
what came after
The findings corroborated management's expectations and led La Poste to create a new organizational structure in which local managers are responsible for the urban delivery of domestic mail and parcel together.
references
- Strategic Redesign of Urban Mail and Parcel Networks at La Poste
- Strategic Redesign of Urban Mail and Parcel Networks at La Poste
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