Camden Property Trust’s COO Keith Oden Unpacks its Package Policy
- Nov 13, 2015
As U.S. consumers continue to take advantage of the ease and convenience of online shopping, the multifamily sector is struggling with how to cope with the ever-increasing amount of packages properties receive each year.
Apartment communities are experimenting with a variety of options, such as package weight limitations or package lockers, but Houston-based REIT Camden Property Trust has taken one of the strongest stances yet with its policy of no longer accepting packages at the management offices in each of its 168 apartment communities encompassing more than 62,000 apartment units. While the company rolled out this policy in January 2015, the issue recently came into the spotlight in a Wall Street Journal article published last month.
As the 14th largest U.S. apartment operator by number of units, Camden Property Trust owns and operates apartment communities in 15 cities across the country and has been in business for 35 years—23 of those as a public company. Last year, it accepted about one million packages at its communities.
MHN recently caught up with Camden Property Trust’s COO Keith Oden to get his take on the reasoning behind the policy and the reactions it has received from its residents and the industry as whole.
MHN: Give a little background on Camden Property Trust and the company’s new package policy.
Oden: The company has been in business for about 35 years, and we have constantly looked for ways to improve our customer service. If there is a better way, we’re interested. We’ve taken the lead role in a lot of important initiatives, some of which initially started out somewhat controversial in the industry but ultimately were adopted by virtually all of our competitors in the markets where we operate. One good example is water billing. We were the first multifamily company to start billing residents for water, which was sort of a revolutionary idea back in 2004. When we started billing residents for water, we caught a lot of arrows from friends and foes. But fast forward a couple of years later and everyone was doing it because it’s the right solution long-term. So we’ve never been afraid to take stands when we thought it was the right thing to do for our customers, and certainly we think our new package policy is a good example of that.
The number of packages being received at apartment communities is growing at a rate of 30 to 50 percent a year. If you go back eight or 10 years ago, we would receive a handful of packages at any one of our communities, and it wasn’t a big deal for us to intercept the packages from the carrier at our management offices and hold one or two packages for the customers. But that usually meant the customer had to pick the package up at our management office. When you fast forward to last year, we actually handled approximately one million packages. We are just not equipped to handle that kind of volume.
When you step back and think of it from our residents’ perspective: we’re intercepting their package and then holding it in our office in some secure place. The only way the resident can get their package out of what I call ‘being hostage’ is to show up during our office hours (generally 9 a.m. to 6 p.m.) That’s an inconvenience for most residents, many of which might have to take time off of work just to be able to retrieve the package, perhaps days later. From a customer service perspective, the system just wasn’t working.
With that in mind, about two years ago we decided to come up with a solution that would be better for our customers. Ultimately we came to what in retrospect looks like the only obvious solution: work with the carriers so that they could actually deliver the package directly to the doorstep of our customers, the same service that most homeowners all over the country receive. So we didn’t think it was particularly revolutionary, but it did meet our customers’ needs in the sense of having them be able to come home from work and immediately have access to their package, and it got us out of the package delivery business. It also allowed our onsite teams to go back to serving our customers in ways that we weren’t able to before because of the time they were spending on packages.
So we worked with the carriers to deliver directly to the doorstep. If that solution doesn’t work for our customer, then we provide them with all the alternatives that are in their immediate neighborhood, whether it’s direct shipping to FedEx or UPS, or in some cases the carriers partner with other delivery sites set up to handle large volumes of packages. But, as it turns out, most of our customers have opted for ‘just deliver it to my front door’ and when I get home, I’ll kick it inside and that’s the end of it.
MHN: What was the timeline for rolling out this new policy?
Oden: It was a gradual roll-out. We did a pilot in the fourth quarter of 2014 where we took 11 communities around the country and rolled it out. We got really good results and based on that we decided to roll it out in one entire district, which was the D.C. metro area in January 2015. We got good results again and then we decided to expand it to an entire region, which was our East Coast region. Then we just went region by region, city by city until we completed it in September in California. Every step of the way we asked: ‘are we getting the results we thought we would achieve? Is it working for our customers? How much inconvenience goes along with the process? Is this, in fact, a better result?’ So we had plenty of time to vet it and make sure that we were getting the results we wanted and ultimately got it all done long before the [Wall Street Journal] story ever got in the news. We worked with our carriers, allowing them direct access to deliver packages to our customers. So our customers are getting a better result and our onsite teams are getting a better result in being able to get back to property management versus package management.
MHN: How many customers would you say are opting to get packages delivered to their doors?
Oden: We think about half of our customers are currently getting packages delivered directly to their door. We don’t have exact numbers because carriers don’t break it down and we can’t get data from them on how many packages are shipped and going to a community and how many were delivered. That number is based on our management staffs being in the community, looking at the volume of packages being delivered door-to-door, and then making a good-faith estimate of what they think. I think it’s in the 50 to 60 percent range, and I think over time that number’s going to grow.
MHN: How has the apartment industry reacted to your package policy?
Oden: Most of our competitors are continuing to do what we were doing prior to the change, which is accepting packages in their management offices. Most don’t have any alternatives to just accepting deliveries and then allowing customers at their convenience or inconvenience to come pick it up. There are pilot programs going on with onsite package lockers. Some of our competitors have put in package lockers where you have a unique access code, then FedEx or UPS puts it in a locker, and you get a notification and then you have a code where you can go pick your package up in your locker.
The problem is that most sites have a limitation on space, and, particularly in urban communities, there isn’t enough room for package lockers. Some people have also experimented with doing a locked package room. If you have space as part of your office, designate that as a package room, you put a lock on it with a code, and its sort of self-service in the sense that the package company delivers directly to the package room and then you get a notification with a code to open the door to access your package. But both of those solutions have real limitations to them, in the sense that you either have to have someone manage the package room or you kind of get chaos where the carriers stack the packages and your resident has to sort through to find their package.
But here’s the biggest challenge with both of those—scalability. Today our package volumes are a million packages, and let’s say that we decided on one of those two solutions and we could actually accommodate for that onsite now. What are we going to do three to four years from now when the package volume isn’t one million but it’s five million? Our solution we know is scalable because FedEx and UPS are perfectly capable of delivering five million packages to our communities versus one million as long as they are delivering directly to the front door.
MHN: Was the decision to implement this policy prompted from hearing individual sites’ concerns? Why did you think this issue was something you needed to address and enforce this policy?
Oden: Well, it was two-fold. We were hearing from our onsite teams that they were drowning in packages, and two years ago, I personally witnessed what our onsite teams were dealing with, particularly around the holidays—it’s a constant source of chaos throughout the year, but particularly around the holidays when package volumes spike pretty incredibly. I was at one of our large communities in Houston and I happened to be there at the time the FedEx truck rolled up, and the driver got this big dolly and filled it up with packages—must have been 100 to 150 packages—and wheeled it in the foyer of our office and unpacked the packages on the floor of our management office. Now our staff is faced with logging in and scanning 150 packages and it’s pretty close to close of business, and you have residents showing up at 5:30 p.m., wanting to know where their package is and the office is closing at 6 p.m. and then you have people showing up at 6:05 p.m. saying, ‘I really need my package.’
So it was feedback not only from our community managers and onsite teams regarding logistics but also the fact that having your packages locked in our management office subject to office hours was just not a great solution for us or our residents. It wasn’t like we had residents leaving and moving across the street because of it. Every other apartment owner was doing the same as we were doing and my guess is that 90 to 95 percent of our other folks in our industry are still handling packages the old way.
MHN: Have there been any reactions that have surprised you since implementing this new policy?
Oden: We were originally contacted by the Wall Street Journal (WSJ), who said ‘this is a big deal, we want to do a story about it,’ and we were happy to cooperate with them. I talked to the WSJ reporter, and lo’ and behold it showed up on the front page of the WSJ. I thought the article itself was fair but it obviously didn’t have all the background information that I would’ve wanted the reporter to use, but space limitations are what they are. You have to write a story and try to tell the story, and I didn’t really have any issue with the original story.
WSJ clearly said that our solution was that we had worked with the package carriers to allow them full access to our communities so they could deliver the packages to the front door. But you kind of had to read that carefully, and it was just one line and the rest of it was our competitors saying what they were doing. But the headline confused a lot of people. It said something to the effect of ‘Camden Stops Package Deliveries At Their Communities.’ Well, as I explained, that isn’t accurate. What we did is allow the package carrier to deliver it directly to the front door. But that message got lost in the telling, I guess.
If we had stopped package deliveries at our 160 communities, that would really have been a big story, but the fact that we had stopped taking possession of the packages and instead allowed the carriers to take them to the front door, I didn’t ever really think it was that big of a story. But when you start with the wrong headline, you kind of end up in the wrong place, even though, like I said, I think the WSJ reporter’s original article was fair and laid out what our alternative was for our residents. Local and national media just picked up on the headline though. But once people realized that that’s not what we did, we were allowing carriers to deliver to the front door, I think it made sense.
Remember, the rollout is complete and we’re happy with the way it has worked. It’s not like this was something we were thinking about doing or in the middle of doing. This is something we started in January. So none of this was news to our residents or onsite staff, but it was clearly news to some folks in the media.
MHN: Do you think there’s any reason this policy became news more recently?
Oden: I don’t know, but dealing with package deliveries is not just a multifamily problem. Commercial office buildings and retail establishments have similar concerns because of the volume of packages they’re receiving. So I think it’s a combination of the fact that consumer habits have changed so dramatically in this area, with free shipping and Amazon Prime and all these things. So the volume is exploding, and I think it’s causing stress in a lot of places, not just multifamily. So that’s number one.
Number two is the holidays are coming up. Whatever the package challenges are today, wait until December 15. So I think it was just really somebody contemplating how we’re going to deal with this long-term, and I think there has been a pretty significant change in consumer behavior where you can get something shipped for free, and if you don’t like it you can return it for free. So that behavior among consumers is driving the volume, and it’s not just how many people are online shopping but the habits of the online shoppers. I’ve also heard anecdotally that package shipments are increasing because people are changing their buying habits. I think its common consumer behavior that when they are shopping online and can’t decide on three different colors of the same item, they just buy all three. All three get shipped, and then maybe two get sent back. So instead of having one package, that’s potentially five packages. So I think it’s just one of those things that’s on top of the minds of people and with the holidays coming up, that’s probably where the story came from.
MHN: How did Camden residents react to the policy initially, and have you seen any difference since it was first implemented? How did you gauge resident response to the policy?
Oden: Honestly, we only had a handful of people who got very animated about our change in our package policy. I’m not sure why because I think for most people, getting packages delivered to your front door versus held hostage in a management company’s office is just such a better solution. It’s hard for me to think why would someone get so animated about that. But I understand that there can be reasons why somebody wouldn’t be able to accept a package at their front door—maybe they’re traveling or maybe they’re called out of town. In that case, it might be better to have a management company intercept and you just come pick it up when you’re back in town. But for most of our residents it has been a much better solution. Like I said, we got some initial pushback from a handful of people at a few communities that got really animated about the change, but that pretty quickly died down when they realized that they had a good option of getting it delivered to them. If they didn’t want delivery, then there were neighborhood centers they could get it directly shipped to and they could pick it up at their convenience.
So in our world, it’s interesting that the amount of conversation about packages and package deliveries was probably more intense as a result of the WSJ article than it was as a result of our initial rollout. We gauged how the policy was doing by having direct communications with the staff. We would get status updates from primarily the district managers who each have a portfolio of six to eight communities. We’d ask, ‘do you have any residents with their hair on fire over this issue?’ and the answer would be, ‘yeah, we’ve got three.’ They had their hair on fire for about a week but now they get their packages delivered to their front door and it seems to be okay. That was the feedback we were getting as we rolled it out.
MHN: The amount of packages being delivered seems to be increasing each year and there doesn’t seem to be any slowing down. Do you think this new policy will influence other companies to implement similar policies?
Oden: I think it’s likely, but again, everybody has to come to the realization on their own. The one thing I know is this, I read the other day that UPS, just one of the three main carriers, was estimating it was going to add up to 95,000 temporary delivery staff for the holiday season. So I think in terms of what that implies for package volumes that are going to show up at our competitors’ communities and how they’re going to manage the avalanche of packages that are coming their way. I would be shocked to see anyone really changing their policies between now and year-end, it’s almost too late to start any kind of a roll-out or change in practice, but we’ll see what their attitude is or what their views are when January rolls around and they’ve lived through the avalanche of packages that, based on UPS’s hiring plans, you know are coming. So will they change ultimately? I’m a big believer that if you get better results from a better mouse trap, people will adopt it. It’s clear to us we’re getting better results from our approach for our residents and our onsite staff.
I think what will ultimately drive change though is that other companies will hear from their onsite staffs between now and the end of the year about the amount of time and man hours and chaos that they’re having to deal with and the lack of time and customer service they’re able to provide because of the package issue. I think they’re going to hear that and that may cause some other people that are looking at this problem at other companies to go, ‘hmm, maybe we need to rethink this.’
We ended up in a place that we started out to achieve, which is we made life better for most of our customers and we made life better for 100 percent of our onsite teams.