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Tag: couriers

Surge Pricing on Shipping Dampens Profits of Logistics Firms

Posted on by David Priestman

Surge pricing on shipping this Black Friday could dampen the profits of thousands of warehousing and logistics firms across the UK. New figures reveal that almost a third of firms in the supply chain sector (32%) saw their carrier costs jump in November last year compared to the previous month.

In the latest report from order fulfilment software provider, Mintsoft, a quarter reported that these costs grew by nearly 25% during Black Friday Week – from an average of £3.50 to £4.37 per item. Carriers typically apply a peak season surcharge between mid-November and early January to manage the high demand over Black Friday, Christmas and the January sales. But with many consumers expecting free or low-cost shipping on purchases, retailers and fulfilment companies need to minimise these costs, otherwise they’ll have no choice but to absorb the price hike and take the hit on their margins.

Beth Chapman, Managing Director at cross-border delivery service, Starlinks Global, explains more:
“The bad behaviour of profiteering from some carriers that goes on during the peak season is frustrating. Retailers are struggling with price pressures and we should be working together to grow volume in a sustainable way. Not hiking prices as soon as it turns October 1st.”

Her comments were echoed by Ruhksar Ahmed, Director of third-party logistics provider, Green Fulfilment: “Retailers should be able to rely on their fulfilment partners and carriers to ensure they don’t face huge price increases during peak season. In anticipation of our client’s increased order volumes, we negotiate with our carrier partners to minimise price increases and guarantee service levels during the busiest e-commerce period.”

Higher shipping costs are not the only pressure facing supply chain firms, according to the research.
Just over 90% take on temporary staff to help them manage seasonal demand but nearly a fifth (18%) say that they struggle to fill these positions.

Data from Mintsoft suggests that firms using its software processed 1.2 million orders last Black Friday, and saw a 35% jump in orders dispatched.

Now its experts predict that order volumes could jump by 14% this year – following a 17% rise in 2023 – and firms may see an increase in orders processed this year too. Being able to process them quickly and accurately is a top concern for operators.

Around a third experienced stock management problems last year, and 58% experienced a stockout. Despite this, around 17% only start preparing for Black Friday less than three months before the event.
Claire Carter, Managing Director of ERP at The Access Group, the parent company of Mintsoft, said:
“Although peak season surcharges are nothing new, they certainly add to the cost pressures already impacting small and mid-sized firms. We’d urge firms to review the contracts they have with all of their carriers and strengthen their partnerships with them to ensure they’re getting the best deal, as well as timely collections and deliveries to meet consumer’s expectations.”

She added: “As our retailers and fulfilment partners know, the more technology they have and the automation it offers go a long way to plugging labour gaps, ensuring speed is met with accuracy, and offsetting higher costs, including shipping. Without the right combination of software and data intelligence, identifying the opportunities for peak efficiency can be difficult – it’s never too early to prepare your tech-stack for busy periods.”

Dave Pickburn, CEO of Stream, a logistics software provider, added: “Increased order volumes are always welcome, but surges, like those during peak season, bring significant challenges for retailers and 3PL providers, especially when those orders may increase by as much as 35% during peak season. Having the right software in place to automate as many functions as possible, means that businesses can handle those surges without adversely affecting the operation. Let the software deal with as many of those repetitive, mundane tasks such as order processing, inventory management, invoicing and dispatch. Retailers and 3PL providers can then deal with the exceptions and outliers, to deliver a seamless experience for their customers.”

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ecommerce Transforming Express Courier Services

Posted on by David Priestman

Online to inflight, ecommerce is transforming international express courier services, writes Matthew Ware, CEO at CFL, Chairman at Aviation Services UK.

It is widely believed that Sting’s “Ten Summoner’s Tales” was, in 1979, the first ever item purchased online – marking the birth of ecommerce. Today, the global ecommerce market is simply vast; in 2019, ecommerce value was estimated at $26.7 trillion, about 30% of world GDP, according to a 2021 report by UNCTAD, the United Nations Conference on Trade and Development. But it is a fragmented, complex market; B2B, B2C, and more recently growing C2C purchases combine to create a demand on the global delivery ecosystem that today is still soaring.

Build it and they will come

There are over 5 billion people connected to the internet today. Consumers can shop anytime, from anywhere, using virtually any device, as businesses can order raw materials, components, and finished goods. This extraordinary expansion has created a near-insatiable demand, the impacts of which are felt in every corner of the globe. The airline industry is the key element – IATA says 80% of e-commerce goods by value travel by air.

But it’s not all driven by consumer and business demand; as express air connections are made, markets are opened and trade flows. For example, there has been significant growth in imports from India over the last two years, largely by growing capacity at Indian airports and an increase in the number of direct links to Heathrow.

What can be measured

The proliferation of mobile apps and online platforms has given customers accurate tracking, real-time updates, and personalised communication – in short, much greater control and visibility over their shipments. These digital solutions streamline order placement, payment processing, and returns management – still a critical element when buying online. Most airlines cargo handling technology remains behind developments in their passenger businesses.

General cargo products inability to easily capture and track item level data sets is problematic for ecommerce shipments where you have consolidations that contain many thousands of different items going to many hundreds of different recipients. Capturing key data around customer preferences, speed of on and off-boarding, the online selection and ordering process, and other metrics, results in an increase in the ability to manage or influence these key measures. Only by knowing how you’re doing today can you hope to do better tomorrow.

B2B 2 C2C

The ability to source from literally anywhere enables organisations to optimise the balance between price, quality and choice. – B2B ecommerce typically involves larger volumes, higher average order values, and longer-term contracts compared to B2C transactions. B2C ecommerce is facilitated by global marketplace platforms such as Amazon and Alibaba, which connect consumers with sellers and merchants from around the world. C2C e-commerce platforms enable individuals to buy and sell goods directly from/to other consumers. Online marketplaces, such as eBay and Craigslist, support these peer-to-peer transactions.

All of this is dependent upon a fast, reliable, secure, convenient and affordable courier network that spans the globe yet reaches right along that famous last mile to your doorstep. Meeting all these requirements sounds like Mission: Impossible, especially when you add in regulatory complexities, lack of cargo capacity and shortage of nighttime flying slots. So, how do you make the seemingly-impossible possible? In simple terms, you automate and innovate. Automation, artificial intelligence (AI), and machine learning algorithms optimise route planning, package sorting, and delivery processes, reducing transit times and costs.

Room to grow

Airfreight in general accounts for only around 0.5% of UK total international movements by weight but about 45% by value, according to a report by the Freight Trade Association. There are around 70,000 domestic SME businesses online that don’t trade internationally but would like to, according to a report prepared by the Social Market Foundation, and supporting them to access global markets would be a hugely positive development both for the logistics sector and the wider UK economy.

The government has set up an ecommerce trade commission to explore how to support this, and many interested parties, including CFL, are engaging with the commission to support this ambition. One solution could be to extend express courier facilities to other, smaller airports around the country. Cargo in and out of Heathrow is more than the sum of all other UK airports cargo shipments taken together. Manchester or Gatwick could offer useful gateways with a dedicated courier facility – something that was actively discussed before the pandemic and may well emerge again soon.

Going further, a greater number of overseas facilities like those at Heathrow could create a network whereby ecommerce importers and exporters would have greater access to integrator-like services, with wider choice and greater certainty over service consistency. However, airfreight is predicated on large consolidations that do not sit comfortably with tracking individual parcels or items – a critical requirement for ecommerce shippers. So express courier providers must develop systems to support their customers and affiliated airlines in capturing this data, to accelerate clearance, customer visibility, and support returns and duty and taxes recovery.

Cross-border ecommerce is a heady mix of B2B, B2C, and C2C transactions, combining to create an enormous global flow of raw materials, components and finished goods. While B2B transactions traditionally dominated, the growth of B2C and C2C ecommerce has expanded the scope and scale of international commerce, creating new opportunities for businesses, consumers, and the delivery ecosystem.

Expansion of capacity and cargo flight slots will help meet the surge in demand, as will the expansion of express courier facilities around the world. However, obstacles such as regulatory complexity, data security risks, and supply chain disruptions, create constraints within which the industry must operate. ‘twas ever thus. As ever, the answer is to innovate, and the industry is trying to find ways by adopting and adapting technology. But the wide technology disparity across the ecommerce ecosystem has led to serious fragmentation – a situation not helped by the perpetuation of legacy systems.

We’ve come a very long way from that single, insecure, slow purchase of Sting’s album in 1979.

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Peak Christmas Panic on 22nd December

Posted on by David Priestman

As we hurtle towards Christmas, days left for grocery shopping, gift buying and travel are disappearing fast, with panic slowly building amongst consumers. According to analysis from delivery business Gophr, peak Christmas panic will grip the nation on the Friday before Christmas (22nd).

Coined ‘National Day of Christmas Panic’, the 22nd December will represent the height of Christmas chaos and panic due to:

• As of 4th December, there was no availability for the most popular Christmas delivery slots, namely the 22nd and 23rd December for several major supermarkets including Waitrose, Sainsbury’s, Ocado, ASDA and Morrisons.
• There being limited availability on train travel out of London, with, for example, only a single train journey open for advanced ticket purchase from London-Nottingham on 22nd December as of 4th December
• A repeat of last year’s busiest day on the roads (Friday 23rd December 2022) for pre-Christmas traffic, so called “Frantic Friday”, with car journeys expected to reach almost 4m on 22nd December

Additionally, Gophr is expecting an 80% increase (vs daily average) in the number of delivery journeys it will make on Thursday 21st December, marking the last realistic day for delivery before Christmas day. Those who’ve left it too late will have to brave the shops on Super Saturday (23rd December) in order to get those last-minute Christmas gifts in person.

Seb Robert, founder and CEO of Gophr commented: “Every year we say to ourselves that we won’t leave our Christmas prep to the last minute, and yet every year there is that sense of panic. It comes as no surprise that as a nation we reach ‘peak Christmas panic’ on the last Friday before Christmas, with delivery slots for groceries being at a premium, travel routes at their busiest and delivery options dwindling before the big day.”

To pinpoint the ‘National Day of Panic’ for 2023, Gophr number crunchers analysed; the delivery slots for all major UK supermarkets, train timetables for all major train routes out of London in December, historic RAC and AA data for travel patterns during the festive period, as well as Gophr’s proprietary delivery data.

Christmas Panic
Christmas Panic

Robert concluded: “A broader choice of delivery options can of course mitigate some of this panic, with many consumers looking for faster options to ensure that they get their products in good time, leaving more time for merriment and less time for stressful shopping and travel.”

Overcoming Challenges Caused by non-Conveyable Parcels

Posted on by Keith McKinley

While non-conveyable items, including those that are oversized, irregularly shaped or heavy, have always been an issue for sorting centres, they’ve become a particular problem over the last two years, as customers have flocked to ordering nearly all household goods online. Joe Szymborski, Design Engineer for R&D Plastics at Habasit America, explains how the company’s new generation of roller plates can alleviate the bottlenecks:

North America and Europe make up around 50 per cent of the global courier, express, and parcel (CEP) market, driven primarily by online sales. In fact, the pandemic saw a jump in global retail e-commerce, with sales going from $3.3tr in 2019 to around $4.3tr in 2020. This increased the volume and variety of parcels being processed. Large, heavy, and irregularly shaped items that consumers might previously have purchased in person are now being bought online.

Everything from paddling pools and rugs to car tires and kitchen appliances are increasingly being processed through parcel sorting centres traditionally used to handling mostly uniform items. The result is that a mid-to-large sorting facility that uses automated sorting systems to process 23,000 items per hour, may have to drop down to around 8,000 per hour to manually handle non-conveyable items. It’s a problem that I’m particularly familiar with; Habasit recently worked with one of the major US shipping conglomerates to solve this problem. While it’s not unique to one company, one of the major problems is that non-conveyables cannot take the same route around the facility as conveyable items.

When they arrive as freight, these items can’t seamlessly enter the sorting system, so are often manually picked and placed aside to be transported and sorted separately. This is because a rug that is 12-foot-long (3.6 m) and wrapped in plastic is likely to get stuck around 90-degree corners, while the potential disruption that may be caused if a 100 lb (45 kg) box of screws was to come hurtling down a conveyor ramp at high speed and break open, doesn’t bear thinking about. However, the alternative, which involves manually handling these items, increases the risk of injuries to personnel. This is where better conveying technology is needed.

One area of focus for Habasit in working with a major shipping conglomerate was to focus on the development of roller plates for gravity chutes. A gravity chute is an inclined plane, trough or framework that depends on sliding friction to control the rate of descent. In conventional automated sorting systems these kinds of gravity chutes typically use continuous roller conveyors. While gravity chutes are not new – after all, they’ve been used in industry for many decades – what’s new is the growing need for them to handle non-conveyables.

For example, a gravity chute with an incline of 14 degrees may work for smaller parcels but is too steep an incline for heavier parcels, which would pick up a dangerous amount of speed at this angle. However, while something more akin to seven degrees would work better, this may in fact be too shallow for lighter but bulkier items, such as rugs or tires, which could get stuck. Here, an 11 degrees incline may offer a good middle ground. But it’s not just about the angle of incline. Heavier items also increase surface friction and therefore wear on the chute itself, leading many companies to line a steel-bed gravity chute with ultra high molecular plastics to reduce the coefficient of friction.

Habasit’s answer was the development of two types of roller plates: machined and molded plates. These include rollers embedded into the surface, whose orientation can be adjusted depending on whether they’re being used for straight transfers, corners, or to control the speed of descent. What’s more, their design means that these roller plates can be used for more than just gravity chutes, including everything from lift gates and skate wheel replacements to sidewalls.

What makes this range unique is that instead of being a continuous conveyor, the roller plates are made in sections which can be more easily replaced if damaged. So, instead of replacing an entire length of conveyor, which could be 52 feet (16 m) long, operators can swap out individual plates and rollers – minimizing the risk of injury and reducing downtime anywhere from six days, to just six hours. So, as the world becomes accustomed to ordering goods online, sorting centres don’t have to take the brunt of the bottlenecks. With the right roller plates in place, they can carry on processing goods seamlessly for customers across the world.

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