Parcel industry in transition: New solutions and concepts are in demand

At the latest the Christmas business has shown that the parcel industry is reaching its limits. The parting manager of Hermes, Hanjo Schneider, has his own ideas about what to do. Though companies like Amazon are already creating facts with new services and could thus set new standards.

A plus of nine to eleven percent to 290 million B2C shipments in this year’s Christmas business, peak days with more than 15 million shipments and a total of more than 3.3 billion parcels in 2017: this year was both a superlative and a challenge for the parcel industry. This was particularly noticeable to retailers and end consumers in the Christmas business. In the first two and a half weeks of December alone, the consumer centers registered more than 2500 customer complaints on their own “Post-Ärger” platform.

Upper regional quantitative limits at Hermes

The announcement by Hermes, in consultation with individual online retailers, caused a stir when it announced the introduction of regional upper volume limits for the first time in order to be able to cope with the Christmas business. The parting manager of Hermes, Hanjo Schneider, explains this step in an interview with the Deutsche Verkehrs-Zeitung (DVZ): “At present, the volume of parcels is increasing far too fast to be handled with economically justifiable investments. That is why we have taken an important step this year by covering the quantities that we have agreed on with customers in summer for the winter. There will be no more transport than agreed.”

German Trade Association calls for innovation instead of loss of service

The German Trade Association argues against such cuts in service and places the parcel service providers under an obligation: “The increase in parcel volume was predictable not least because of the growth forecasts for online trading and could therefore also be planned by the service providers. Now it must be ensured that the agreements with the dealers are adhered to,” says HDE CEO Stefan Genth. Capacity building must be tackled in the future. The focus is not on conventional transport, but on the further development of existing delivery and collection concepts,” Genth continues. These include, for example, small depots in the city centers to distribute parcels of e-vehicles or the increased use of joint collection stations. The growth in online commerce will not be slowed down by a lack of capacity in parcel delivery. If the parcel service providers bring volume restrictions and price increases into the discussion without corresponding added value, this would be the wrong way to meet the challenge of increasing parcel volumes.

Online trade is developing faster than capacities in the parcel industry

The measures taken by the parcel service providers clearly draw attention to the fact that the parcel industry has not kept pace with the growth of online commerce. An example: While Amazon’s net sales in Germany more than quadrupled between 2008 and 2016 from $3.2 billion to $14.1 billion, courier, express and parcel services revenues grew much more slowly in the same period, from €13.8 billion to €18.5 billion. Although new logistics centers are being opened and additional employees hired, growth in online trading clearly exceeds these measures. In an interview with DVZ, the parting manager of Hermes, Hanjo Schneider, explains what steps need to be taken to counteract this trend. He advocates a shift from door-to-door delivery to alternative delivery addresses such as parcel shops. Hermes wants to increase this number from 15,000 to 20,000 shops in the medium term: “In addition, price models need to be rethought. For example, perhaps the parcel delivered to your doorstep will have to become more expensive, as it has been the case in Sweden for many years. In the city centers, there is also a lot that can be achieved through mobile microdeposits, which are reached by truck at certain times and from where motorcycles take over the fine distribution of pre-sorted consignments.”

Companies like Amazon and Zalando test their own delivery ideas

Here, the established service providers have to be careful that other companies with new ideas and their own investments do not lose their place. Amazon offers its free premium shipping Prime for millions of items. The Group also has several logistics centers, from which it delivers the parcels itself in cooperation with local service providers. In addition, the Group is initially introducing its own Amazon Flex delivery option in Berlin, where private individuals can deliver Amazon packages for up to 64 euros per four-hour block. In addition, Amazon Locker has installed more than 1,300 of its own collection stations in seven EU countries, including Germany. Zalando is also constantly testing measures to increase the service: as early as 2015, initial tests were carried out for same-day delivery and the company also initiated pilot projects such as returns pick-up at the desired location or picking up the item directly in the shop around the corner. In the fall of 2017, the new pilot “Zalando Bringt’s dir” started, with which the delivery was tested within a 60-minute window of convenience in Berlin Friedrichshain and Prenzlauer Berg. Jan Bartels, Vice President Logistics Products at Zalando: “Our customers want speed and flexibility in the delivery of their parcels. You want to control the delivery of the package and not plan your day after the delivery time of the package. With the new service test, we are meeting these demands and at the same time expanding our network for further exciting services.” Measures that imply a deterioration in service for the customer are likely to be twice as difficult in view of these offensives. 



Image: Amazon


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