Small is beautiful

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The highest profile deal in the express market might be UPS’s 5bn euro takeover of TNT, but in the longer term it might well have less significance than some of the smaller deals that are now being done.

Times are tough in the traditional B2B sector of the parcels business and increasingly carriers are looking to home shoppers to offset the decline in sales. A recent study by Apex Insight found that B2B had declined from 67 per cent of the market’s value a few years ago to 57 per cent today.

The problem with home delivery has always been the difficulty of getting the goods into the hands of the customer without making two or three (probably loss-making) visits.

On top of that online customers are becoming more demanding. They are not prepared to take time off work to wait at home for several hours for a delivery.

Some of the most innovative solutions to such problems are coming from start-ups like Shutl. Shutl was founded in 2010 by entrepreneur Tom Allason as an internet service that connects retailers to local same-day courier companies to enable deliveries to be made within 90 minutes of ordering.

I mention it because UPS has just invested $2m in the business. In fact, Shutl has also attracted interest from GeoPost, parent company of DPD, and Interlink. And GeoPost has also invested in Worldnet Direct which has developed an international delivery service targeted at online retail.

Other moves have seen mailing specialist P2P targeting online retailers with a new order fulfilment and distribution division, P2P e-Logistics. And DHL recently launched a cross-border returns service for online retailers called DHL Easy Return.

Such moves suggest that the express market will look significantly different in only a few years’ time with more focus on flexible options for delivery to consumers. And that could easily feed back into the traditional B2B market.

Technology is also having an impact – notably the new trend towards Bring Your Own Device (BYOD). The rise of smart devices like the iPad and iPhone is opening the logistics market to new ways of working. You can read more about that in this issue of Logistics Manager – in our new iPad edition. 

Malory Davies FCILT,

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