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Express sector finds ways to upgrade its delivery in e-commerce surge

THE express parcels delivery industry is finding ways to cope with surging demands of e-commerce of online shopping, but it is a difficult and often unprofitable process.The sector is now being shaped by the dramatic growth in e-commerce volumes that has put logistics firms under pressure to devise ways to provide customers choice in delivery times place.The process has not been easy said a report from the UK's Transport Intelligence, which has tracked the industry's attempts to cope with the new realities which have proven to be costly and inefficient, according to.

Alternative delivery locations include "smart lockers" located at car parks, petrol stations, railway stations and supermarkets in order to make it more convenient for recipients to collect and return parcels, says the report, 'Global Express and Small Parcels 2015".

Said Ti chief executive John Manners-Bell: "E-retail, new business models, disruptive technologies and the volatile global economic environment are transforming the express parcels industry."

He said the future is "overwhelmingly positive, but only for those companies which work out how to take advantage of this systemic change".

Growth has been particularly strong in Asia Pacific, where the express market grew by 16 per cent last year, but it has not necessarily resulted in profitability especially those in the domestic market.

"Even the largest carriers, such as UPS, have struggled to find a solution to deal with the surge in demand at peak times of year, including the so-called Black Friday," the report said.

"In addition to this, competition is also arising from unlikely sources. Many disruptive technology companies, such as Uber and Nimbr, have become massive businesses and the possibility that one will emerge in the logistics industry should never be ruled out.

"However, these start-ups are not an imminent threat to national or international networks, due to their greater levels of efficiency. They are also largely aimed at consumer markets, rather than B2B. They could even become a useful tool for many incumbent express companies to better utilise assets in niche sectors or geographies," the authors of the report highlighted.

"The changes in the market are not all driven by changing patterns of consumer demand. The biggest shake up will be caused by the likely acquisition of TNT, by FedEx, reducing the number of large, global express players from four to three."