Delivering the Goods

Business Insights
02/05/2018

Do you remember having to wait in for a delivery? Giving up four or five hours just so you can be there to sign for a doorstep arrival?


And, oh, the frustration of ‘wasted time’ when it turned up two minutes before the final cut-off time - and rage when it never turned up at all.


The last 10 years or so have pretty much seen an end to all that, thanks to the rise and rise of the internet and ever evolving technology.


Those developments have been accompanied by the globalisation of world markets and more relaxed border restrictions allowing easier transportation of goods between countries.


The recent fly in the ointment is, of course, the shadow of Brexit, and some uncertainty as to how future border controls may impinge on the sector. However recent studies from Apex Insight, an independent provider of research, analysis and consulting services, are indicating a bright outlook for the UK’s £8bn parcels market.


That’s good not just for the international business-to-international business market. Today, even domestic householders think nothing of sitting down with their computer/tablet/Smartphone to purchase an item from the other side of the world and be ready to sign for it on their own doorstep a week or two - sometimes days - later.


The effect on the delivery industry has been profound, and many sector experts predict there are still more changes to come, bringing benefits for deliverers and consumers alike.


Growth is now speeding up as traditional carriers and new entrants develop better models to meet home shopping and consumer demand, it reports.


E-commerce has driven the merging of the three main segments: business-to-business, business-to-consumer and consumer/small business-consigned parcels, which once were traditionally seen as separate markets, served by different providers.


With the rise and rise of home shopping making an increasingly attractive market, business carriers such as UPS, and UK Mail have turned their attention to the area while consumer-focused carriers like Yodel and Hermes have invested in systems and sought business customers.


There has also been the development of new services by both carriers and third parties, such as internet brokers, and parcel shop networks, to give consumers and small businesses a much wider range of services.


Home shopping has fuelled growth in the business-to-consumer segment throughout the last decade as penetration of broadband, smartphones and tablet computers has risen.


The challenge for operators has been to develop a model to serve home deliveries profitably, so they can obtain exposure to this growth segment – which now represents more than a third of the market – without damaging their overall economics and impacting service levels for premium business-to-business customers.


The fact that even the big international courier delivery companies are doing it by adapting their services, providing flexible delivery options, offering real-time tracking, click-and-collect, specified safe places from a group of options as to where their parcel may be left, and on-line parcel tracking as the norm shows just what the potential for this segment is. Such a radical shift has also come about by happy circumstance. A few years ago the technology to integrate tracking and transport modes with online systems which can be instantly updated according to circumstances didn’t even exist.


If yesteryear’s customer even contemplated ordering an item from abroad, or was faced with sending one overseas, it meant days - even weeks - of not knowing what had happened to that shipment once it had been waved off from the appropriate shore, and no confidence that it would arrive at its destination.


Nowadays, even a smartphone can track a package from warehouse to courier van heading for delivery while text messages or phone calls can bring advance warning that the goods are “30 minutes away” from the final destination.


Further home shopping-driven change has also seen ‘lifestyle couriers’ become a force to be recognised within the industry.


Self-employed drivers now make up between 5-8% of UK logistics workers, with this type of courier - someone using their own car and spare time - recording one of the most rapid expansions in the group.


Individuals who, out of choice or necessity, spend varying amounts of time each week delivering parcels, usually around their immediate neighbourhoods, have always been part of the sector but it’s the rise of the internet that has seen their numbers boom.


Anyone who orders home deliveries from a wide range of well-known online, catalogue and high street retailers will find more often than not that while somewhere on the label a name like Yodel will be present; the package will come to their doorstep fresh out of the boot of someone’s car. Possibly even someone they know.


It’s not hard to see how online retail has changed the courier industry significantly but as our home shopping preference grows and technology keeps evolving it’s clear we’re far from the end of the transition.