Driving Forward and Delivering on Service

Parcel sorting - The Logistics Business UK - Supply chain consultants

Following a recent poll from MSM which was highly critical of many of our leading parcel carriers over the Christmas period, we thought it only fair to consider the complexities of what these companies are trying to do.

We all know someone who has waited in all day for a parcel to be delivered only for it to arrive five minutes after leaving to pick the kids up from school! Extremely frustrating – and l’m sure more than a few expletives have been uttered in their direction over the years!

It’s a service that, with our increasingly busy lifestyles, we have come to rely upon – and yes it’s one we should expect. After all, even when the courier charges are ‘free’ at the point of purchase, the retailer is paying for it and therefore in turn are we, albeit indirectly.

Although criticism is never nice, customer service is of paramount importance to all carriers and customer feedback continues to play a vital role in forging improvements and new initiatives to the service.

That said, l think it’s worth reflecting for a moment on the complex journey a parcel embarks upon from the moment it’s ordered to the time it arrives at our door.

Here’s a typical journey a parcel takes:

An order is placed by the customer and received by the retailer. There will be a clear cut off time for next day delivery – this varies from retailer to retailer. In some cases it can be as late as 9pm and the pressure is on to extend that even further back.  In order to cope with the volume though most courier companies have to start receiving and sorting parcels from mid to late afternoon to stand a chance of getting them all through in time.  And of course they have little idea of what is coming until almost the point when they arrive.

So there is pressure on the retailer to pick and pack orders ready for collection by the parcel carrier as early as possible and whilst most will agree time slots for collection or delivery at the parcel hub, they are often late.

Parcels may be collected and taken to the carrier’s local depots, the first leg of the journey, of which there might be typically 50-60 throughout the country or if there is sufficient volume trunked direct to the central hubs. Those that have gone to  depot will be bulked up and may have to be pre-sorted before being sent on the second leg of their journey to the hub or hubs.  For most parcel companies trailers will be arriving at the hubs throughout the evening and night perhaps up to 2 or 3 o’clock in the morning.

Here parcels are unloaded, sorted by postcode and re-loaded to be despatched on the third leg of their journey back to one of the carrier’s regional depots – arriving throughout the night up until say 5 or 6 o’clock in the morning.

Here they get sorted yet again into van rounds for their fourth and final leg and after all that you, the dear customer, may not be in and so the parcel has the be taken back to the depot for another try – all at the parcel carrier’s expense.

Once delivered, a typical parcel could have travelled over 500 miles (sometimes more) and have been touched at least 8 times.  And each of these touches has to be efficient and accurate.  A mistake at any one is likely to result in a service failure.

As if this wasn’t difficult enough you then have to consider the highly seasonal nature of the business.  At Christmas all parcel carriers have to take on and train additional staff to the same standard as their permanent employees and rely on them to be equally efficient and accurate in their work.  You might though think that it all relaxes again in January but such is the growth in parcel traffic that volumes do not decline so much.

On top of all of that customers are expecting increasingly sophistaicated tracking data and so scans have to be taken at various points along the journey again introducing the possibility of error.

But this does not explain the entire reason why some parcel carriers are struggling.  A growing market usually means that it is also a profitable one but that is not the case for most parcel companies. Fierce competition and aggressive pricing has turned this into a commodity market in which the industry as a whole is making little if any profit.  This in some cases starves investment and leads to further problems.

If the industry is to get its act together and achieve the high levels of customer satisfaction that it seeks then prices will have to rise and investment made in improving customer service.  Retailers also have to make sure they really understand what customers want.  The next day service demanded by many retailers is what is really hurting the parcel companies and yet there is evidence that often this is not the customer’s first priority.  For many, if not most, free and predictable timed delivery is more important than rushing it for the next day.  Even when the customer has chosen, say 48 hour service, the retailer will often use this to smooth their pick and pack operation rather than help the parcel company.  If the parcel company can have another day then sortation centres can run 24 hours a day rather than 12.

Retailers are continually looking at ways to improve and innovate delivery to their customers and we are seeing many more ‘Click and Collect’ options being offered. Another development is CollectPlus – a joint venture between Yodel and PayPoint with some 5000 locations where parcels can be sent or collected and Amazon is trialling drop boxes for customers to collect their parcels in locations and at times more convenient to them.

Delivering parcels is a complex business and its not surprising that it occasionally goes wrong.  But for some, it goes wrong too often.

Our supply chain consultants at The Logistics Business Ltd have worked closely with a number of parcel carriers to optimise the efficiency of their sort centres – a crucial link in the overall parcel delivery chain.