[SCMP Column] Code Matters

June 11, 2016

At a wonderful Riesling wine tasting at the Foreign Correspondents’ Club last week I decided to order for home delivery a half case of delicious Piesporter Goldtropfchen Riesling Spatlese (yes I live a very privileged life). The agreed Saturday delivery time to Clearwater Bay came and went, and so did the courier – without leaving any wine. Phone calls followed. He could not find the house. New arrangements were made, and he tried afresh on Monday – this time successfully.

This got me thinking. Did the wine merchant carry the cost of two courier trips to distant Clearwater Bay? Or did the courier company bear the cost of first-time failure? Either way, this delivery exercise proved very expensive for someone - and I am sure at some point was built into the price I paid for the wine.

Surely this is not efficient. And surely this delivery challenge would be greatly eased if Hong Kong bothered to introduce postal codes. But here’s the rub: despite investigations in 2000, in 2004 and again in July last year, the Hong Kong Post office – and the government and legislators too – Hong Kong remains one of the few economies worldwide without postal codes. By far the majority of countries without postal codes sit in godforsaken parts of Africa. Among moderately developed economies, only South Africa has failed to introduce. Ireland – long a laggard – at last launched a postal code system in 2015. Eircode provides unique codes for every individual address in Ireland.

Hong Kong often relishes being contrarian, but why on earth should we wish to opt out of a system that everyone else believes is so useful? Some argue that Hong Kong is too small to need postal codes, with just 3 million local residential and commercial addresses. The absence of any standardized form of address format in Hong Kong, and no standard form for street names in English and Chinese, adds complications I understand – though my own sense is that postcodes would help to tackle this problem rather than be frustrated by it. Perhaps more to the point, the Post Office also argues that its current admirable efficiency in getting 99% of letters reliably to their destinations within a day makes postal codes unnecessary. But if Hong Kong is too small to need postal codes, why are they needed in even-smaller Singapore, which has unique postal codes for every house and building in the country.

With delivery of letters being a declining global industry, some would argue that it will get easier, not more difficult, to deal with future volumes of postal traffic – and hence less important to introduce postal codes. The Universal Postal Union says that the global volume of letters fell 2.6% in 2014 – the latest year for which we have data – to 327.4 billion, with international traffic, which accounts for just 1% of all letter traffic, falling by over 6%. Pressures in Asia are also insignificant by comparison with the US and Europe, where 301 letters per capita are posted every year. The comparable number for Asia is less than 6 per year. The same picture emerges with parcel delivery. While parcel deliveries grew by 3% in 2014 to 7.38 billion, by far the majority of pressure is in the US and Europe, with 7.5 parcels delivered per capita per year – 100 times more than in Asia. So the comparatively massive volumes of letter and parcel traffic in Europe and the US mean that the case for postal codes there is clearly more powerful.

But surely nowadays this is about much more than the simple delivery of letters and parcels. What about Amazon’s need to deliver books across the community? What about the burgeoning needs of courier-based “fulfillment” for the E-retail craze that is putting the future of the region’s retail malls in peril? Or about Taobao trying to deliver garden furniture or cooking pots from a Shenzhen warehouse? What about Uber taxi drivers trying to find your apartment to deliver you to a cinema in town, or for that matter what about a friend trying to come to your home for dinner?

It strikes me there are a multitude of good reasons to take very seriously the need for postal codes. It is true that the fact of widespread high-rise living makes it harder to apply a post-code scheme – local experts say we would need a 15-digit code – but if Singapore, or Taipei, or New York or London can conquer such challenges, surely the Hong Kong challenge is not insurmountable? And if China can introduce a scheme to cover the entire Chinese economy down to the district level, surely the Hong Kong challenge in introducing a scheme must be very modest. Surely the data embedded in Hong Kong’s Land Registry should provide a strong foundation for a highly efficient postal code scheme? Surely large numbers of couriers, logistics companies, and even Pizza delivery guys would greatly benefit – improving their efficiency, lowering delivery costs, and reducing the cost to us of so many services.

I confess I am biased because I was irritated not to be able to savour my glass of Piesporter Goldtropfchen Riesling Spatlese last Saturday night, but I don’t think this overrides the case for seriously reconsidering introduction of postal codes. In my view whatever the local complexities, and however efficient our postal workers may be, there are broader and bigger reasons why today we need a post-code system in place.
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