With over two decades experience in the Parcel’s business, there’s not much that Dick Stead hasn’t seen. Rising through the ranks at Royal Mail he become Managing Director of Parcelforce before moving to Yodel where he was Executive Chairman for six years.
Dick has now left Yodel, spends time fishing on his boat and is a consumer, shopping online, and seeing the courier industry from the other side of the fence. Today Dick discusses that missing part of the courier jigsaw – all couriers deliver a superb service to consumers compared to two decades ago, but what about the collection side of the business?
Dick Stead: Out of the Parcels business and now a consumer
It has been interesting observing the world of parcels as a customer rather than a supplier. Like in many modern households, I am a frenetic internet shopper and tend to get multiple parcel deliveries each day.
I am visited each week by most UK parcel carriers and my experience of on-time delivery of perfectly presented parcels has been excellent.
Most parcel carriers will now give me a delivery time-slot, an ability to redirect my parcel in flight, an option to ask for the parcel to be left in my chosen safe place, or an option for me to pick the parcel up from a nearby retail store or locker box. I have received excellent service by all carriers and on the very small number of occasions when things have gone wrong I have been entirely satisfied with the steps taken by the retailer and their parcel carrier to rectify the issue.
It is also exciting to see so many retailers innovating and allowing me to order later in the day and offering me a range of delivery options. Most retailers are working hand in glove with their parcel carriers to make sure that their sales promises can be met in full by their delivery partners.
I have so many delivery options to choose from including same day, nominated day and in some cases I can even specify my chosen timeslot on my chosen day.
The age of near perfect parcel delivery has arrived and I am a very satisfied Internet shopper.
How couriers innovated and what does has it cost?
For parcel carriers the route to improving home delivery has been a costly affair and their investments to achieve near perfect deliveries are not always reflected in the price they can charge to the retailer. I am convinced that parcel delivery prices will have to rise to better reflect the costs of near perfect delivery if we want to maintain a vibrant and innovative parcel industry. It’s funny that a relatively modest price increase is probably all that is needed to change the fortunes of the majority of parcel carriers.
The inconvenience of ad hoc Parcel collections
With the parcel carriers’ singe minded focus on developing the highest quality delivery experience it is not surprising that the same rapid improvement in performance has not been seen in parcel collections, particularly for small businesses sending less than 100 parcels per week.
Parcel carriers are very good at doing large and medium sized scheduled collections from larger businesses, but the smaller trader who orders collections on an ad hoc basis continues to get a sub-standard collection service with same day collection efficiency often below 80% and sometimes below 50%.
To get into the higher end of the efficiency range the small trader has to place collection requests very early in the morning so their collections can be scheduled in amongst the drivers timed delivery schedule. Few small traders take all their orders so early in the morning; orders taken later in the day inevitable miss being collected in the same day and result in the small trader getting, at best, a 48 hour end to end delivery service.
Some parcel carriers actively steer away from doing business with these small traders because they cannot effectively do ad-hoc, low volume, collections efficiently and effectively.
The small, ad-hoc, senders have a personal attachment to each order they receive; they know failed collections will damage their businesses. It hits them in their own pocket and can damage their reputations through negative marketplace feedback. So many small businesses make repeated calls into the parcel carrier for assurance that their collection will be made and demand to know when their parcels will be collected. Handling a high level of inbound customer service calls quickly turns a profitable parcel into a loss making parcel for the parcel carrier and reinforces their view to stay out of this marketplace.
As a result parcel prices offered by parcel carriers tend to be high and many small traders are forced to drop their parcels off at a post office or a parcel shop. This latter route works well for many small traders but for some, having to leave their shop/phone for an hour to drop off parcels is not an effective use of their time.
The lack of reliable ad-hoc, same–day, parcel collection services is placing small businesses at a significant competitive disadvantage compared to large businesses and to me this does not seem right. This is the reason many small businesses are reluctant to develop an Internet based sales channel.
Our small business community should play on a level playing field and be given every chance to reach their full potential, which for many would include a multi-channel sales strategy. Effective and sensibly priced parcel collection will play a big part in achieving this objective.
For a parcel carrier industry with a track record in innovation and solution development, this should be an easy one to solve…..