Express carriers becoming more dependent on home shoppers

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Express parcel carriers are becoming increasingly dependent on home shoppers to offset a decline in the volume of business parcels since the start of the recession in 2008, according to research by Apex Insight.

UK online shopping sales in the first half of 2012 were almost 18 per cent up on 2011 levels, suggesting total sales for this year will approach £30bn.

But, said Apex Insight, “the B2B segment has decreased from two thirds of market value a few years ago, to just 57 per cent today, while the average revenue per parcel is 10 per cent below 2007-08 levels”.

And it suggested that in the current market conditions it is likely that B2B carriers including UPS, DHL, UKMail, City Link and GeoPost will increasingly concentrate on developing services which will provide added value and customer satisfaction to home shopping organisations, e-tailers and online shoppers, rather than sticking to the higher margin B2B segment.

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The research also found that the last mile of the delivery process was still the biggest cause of complaints, although it said initiatives such as GeoPost’s one-hour delivery window had been well received by customers.

Frank Proud, director of Apex Insight, said: “Although B2B deliveries are and will remain the largest segment, the consumer delivery segment, which has very different needs, is where the growth is.

“Traditional carriers must focus on the specific needs of home delivery. We expect to see continued innovations in service as carriers embrace these challenges and adapt their strategies, operations and marketing to make sure they share in the growth segment while retaining a viable premium B2B model.”

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