Expanding out-of-home delivery networks through partnerships

Building a parcel locker or PUDO network is often a slow, expensive, and complicated process. But not many parcel and postal operators have the luxury of time. They’re under pressure to build and scale as fast as possible to gain coverage and stay competitive.

That’s why many operators are turning to shared infrastructure and forming partnerships that give them access to widespread locations with built-in foot traffic.

But not all partnerships deliver equal value. A deal that looks promising on paper may still fall flat in practice if the locations don’t perform. Which is why the real question today is: how do you scale successfully through partnerships?

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Why partnerships are essential

The biggest benefit of growing through partnerships is how quickly you can roll out your network, as you’re essentially using infrastructure that already exists. Other benefits include:

• Prime locations: Partner locations, such as shops and gas stations, already have high foot traffic. They are also on daily commute routes and are easy to reach. These factors are very important for making your network successful.
• Lower upfront costs: In most cases, partnerships can help you avoid major infrastructure investments. For example, it's much cheaper to partner with an open network than to endure the costs of installing a large number of lockers.
• Getting around red tape: Some areas are off-limits due to strict regulations. You may need several permits or have to bend over backwards due to city planning requirements. When you partner with shops and others who own the property, you can reach these areas without the hurdles, either by placing a locker inside the premises or by having the property operate as a PUDO point. 

Types of partnerships 

Some of the most common partnership models are:

Retailers and gas station chains

Retailers, supermarket chains, convenience stores, and gas stations make natural partners. They are widespread, often open long hours, and already get plenty of visitors. 

‍Why it works: By teaming up with national or international chains, one contract can give you access to thousands of new locations. They are often open to cross-promotion, which means they will promote the new service to their customers. In return, they benefit from the increased foot traffic as people come in to pick up their parcels. This creates a win-win situation, making it easier to negotiate and finalize the deal.

In practice: This model is quite popular, and parcel and postal carriers often partner with multiple retailers and chains. You can see how common this is by googling "[delivery company] partners" for any major carrier. For example, Royal Mail works with Co-op, Sainsbury's, and Motor Fuel Group to expand its network, while InPost has partnered with Lidl, Tesco, and Morrisons. The key is figuring out which partners make the most sense for your specific market and needs.

Local governments and transit authorities

Public sector partnerships give you access to prime public locations, like sidewalks, transportation hubs, and parking spaces.  

Why it works: These locations are a natural part of people’s daily commutes and have high foot traffic, which ensures greater accessibility and visibility. If the agreement were to give you exclusive rights to the locations for a certain period, it would make it difficult for competition to catch up. 

In practice: New York City started a pilot project called LockerNYC with GoLockers. Together, they placed parcel lockers on sidewalks, directly addressing the urban issues of delivery traffic congestion and package theft.

Open networks

Open networks are shared infrastructure (parcel lockers or shops), operated by one entity but available to multiple carriers. In this case, parcel and postal operators pay a fee to reserve a locker compartment or a staffed counter. 

Why it works: This model maximizes the use of existing infrastructure and lowers the initial investments you’d need to start or expand your network. It’s also an effective way to reach rural and low-density areas where parcel volumes are too low to justify placing your own service points. In urban areas, even when existing locations are available, open networks serve as additional capacity.  

In practice: In recent years, open networks have gained popularity. It’s not uncommon for a single carrier to work with several network providers at once. Amazon UK, for example, partners with Collect+, Quadient, the Post Office, and YEEP!, giving it access to locations across the country. 

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How to evaluate potential partner locations

Not all partnerships bring the same value. And even when a partnership looks good on paper, not every location will actually generate meaningful parcel volumes. The difference is the potential each location has, and the only way to assess it systematically is through spatial analysis. 

Gather data

• Shipment volumes (if available) and population data to benchmark potential demand
• Existing network locations to measure overlap or gaps
• POI data (potential partner sites and competitor locations) to understand the reach of each location and estimate competitor presence

Decide on a tool

Geospatial tools can simulate different network models and help you estimate the outcomes before making final decisions. 

Which tool you choose also matters. Consider who will actually be planning the network. Some organizations have dedicated GIS teams with the expertise to run complex models, while others rely on sales or acquisition teams who may lack technical backgrounds.

The right solution should make it easy to run analysis, iterate quickly, and share results (for example, with the field team). If your team can't use the tool or share its outputs effectively, the analysis won't deliver the value you need.

Define what “high potential” means

Before running your analysis, define what makes a location worth pursuing. In general, high-potential locations should:

• Have strong reach: They can service a large number of people within realistic distances. 
• Be accessible: This includes good parking or public transport connections, wheelchair accessibility, and adequate operating hours. Ideally, they're open evenings and weekends to give customers more flexibility.
• Help close competitive gaps: They improve your network's size and coverage compared to competitors, either by serving underserved areas or matching competitor presence in key locations.

With everything defined and in place, you should be able to complete the spatial analysis.

The output

Your analysis should produce a prioritized list of locations worth negotiating over. Back each location with solid data showing both its individual potential and how it contributes to your overall network coverage. This gives you a strong foundation for partnership negotiations and helps you avoid costly mistakes that could hurt your expansion later.

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Putting it into practice: Building a network in Amsterdam 

Note: The following example uses anonymized publicly available data from real companies operating in the Dutch market.

Let's say we're a parcel operator entering the Dutch market. We want to build a parcel locker network and have decided to start in Amsterdam as a test phase. We’ll drive network growth through partnerships with supermarkets and are specifically looking for well-loved brands with long opening hours that could give us good market penetration. 

For the initial rollout, we're limiting ourselves to 10 locations since our field team can only handle site visits and installations for that many stores at this stage.

We'll evaluate three potential partners: Tulip, Rose, and Daisy supermarket chains.

→ Interested in how this plays out in other markets? Check out The Network Chronicles, where we analyze Amazon and DPD’s network strategies in the UK.

Setting the scope

Data we need: 

• Population data: Since we're entering a new market, we don't have shipment volumes yet, so we'll base our analysis on population data
• POI data: Tulip, Rose, and Daisy locations across Amsterdam

How we'll measure coverage:

As we examine the entire city of Amsterdam, which is a large and walkable urban area, we will use walking distance to calculate coverage. This coverage represents the potential customer base that could reach each within a 10-minute walking distance (W10).

Tool: 

We’ll be using Mily Tech’s OOH delivery analytics solution to evaluate location potential and plan the network. 

The analysis

Let’s start by looking at each partner individually:

• Tulip: 14 stores with 17% coverage. Strong performance with fewer sites, showing that Tulip’s locations are generally well placed.
• Rose: 19 stores with 17% coverage. Even with more stores, coverage is the same as Tulip's, which suggests that Rose, as a partner on its own, could give us lower reach.
• Daisy: 14 stores with 12% coverage. Lower overall coverage, so we could assume that Daisy, as an individual partner, would also give us less optimal locations, but we can’t be sure until we complete the analysis.

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Now, we’ll use the platform to generate 10 optimal location recommendations, meaning locations that would give us the highest reach out of each store network:

• Tulip: 13% coverage. As expected, Tulip performs best as a standalone option.
• Rose: 11% coverage. Solid performance, but less efficient compared to Tulip.
• Daisy: 11% coverage. Close to Rose despite fewer stores, which shows that our initial assumption could have led us to a wrong decision.

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Finally, let’s see what results a mix of partners could deliver:  

• Tulip + Rose: 14% coverage (119,095 absolute coverage). The strongest two-partner combination.
• Tulip + Daisy: 13% coverage (114,912 absolute coverage). A good mix that brings coverage close to the previous option, but with slightly less reach.
• Rose + Daisy: 13% coverage (111,220 absolute coverage). Similar to Tulip + Daisy, showing Daisy can complement either partner.
• All three partners: 14% coverage (121,338 absolute coverage). While the % coverage is the same as Tulip + Rose, this scenario captures the largest total number of people, which could make it the most attractive option.
  
  

A mix of all three partners could potentially be the best choice for us. But the final decision depends on other factors, like budget, competition, and what the sites actually look like in real life.

If our budget only allowed for two partners, we’d likely go with the Tulip + Rose combination.

At the same time, we’d want to validate each location. Using the platform to check street view, we might find that some sites don’t have enough space for lockers. In that case, we’d have to remove those locations and continue the analysis to create a network structure that works both on paper and on the ground.

Another layer to add is competition. We can check if our competitors are already working with any of these partners, and which locations they’re not covering on the market, which gives us more insights into which partners and locations to choose. 

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Final remarks

Successful expansion isn’t about adding more dots to the map. It’s about ensuring every location delivers value by serving the right customers, maximizing utilization, and reinforcing your competitive position.

At Mily Tech, we help you grow your network strategically with data, so you can choose the right partners and expand where it truly matters.

Want to see how? Reach out to our team.