Sorry we lost you(r parcel)!


Sorry we lost you(r parcel)!

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The excessive growth of the parcel services caused by the rapidly increased online shopping has forced these parcel service companies to integrate a high efficiency and reliable system that can handle the huge amounts of parcels and reduce the time from order to delivery. There are many ways to secure the parcel you send dependant on the urgency of quick delivery or the value of the parcel. By paying an extra fee the customer can prevent the parcel to be transported via the larger parcel service centers and reduce the chance of the parcel to get missing.

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One of the administrators, Hunter Kelly of accountancy firm EY, said City Link had experienced heavy losses over recent years brought about by “a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the company in reducing its cost base” (moneywise, 2014).

This is one of the examples that parcel service companies struggle with the fierce competition in this market. The profit margins have declined over the recent years (gurufocus, 2015). The differentiation of the service is the only way for these companies to distinguish themselves from the other competitive companies. To achieve this these companies rely very much on their information systems. The better the system the higher the chance of survival in the market. Over the years these market conditions have driven multiple small parcel services out of the market. What is left is a small amount of large parcel service companies like; UPS, DHL, FedEx. For the Dutch market the largest companies are PostNL (70%!) and DHL (Elsevier, 2015). Even though there are still a couple more companies for online purchases PostNL is used in most cases. Customers do not even have the option to choose between different companies. This is due to the contracts between the retailers and PostNL. On one hand this is because they are large and dependable on the other hand PostNL in mostly preferred by the customers in general. Apart from the high rate of delivery by the separate services still too many parcels get lost even via the extra secured shipments. This causes dissatisfaction for the concerned customers.

Having a optimal system for the parcel services is not enough. The enormous amounts have led to complex situations in the physical parcel centers. How are these relevant companies going to deal with this increasing complexity? The future increase in online shopping and the upcoming internet of things will influence their market, hence they can assure themselves that the parcel network will become more dense in the coming years. The high rate of successful deliveries needs to remain the same or, better, it should increase. Working on a future solution of this problem is essential to maintain a/the position in the market

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Sources

http://www.elsevier.nl/Economie/achtergrond/2015/2/Iedereen-wil-uw-pakje-hoe-de-markt-van-pakketbezorgers-explodeert-1698247W/

http://www.gurufocus.com/news/366534/vilas-capital-managements-thirdquarter-letter

http://www.moneywise.co.uk/news/2014-12-29/city-link-collapse-how-to-get-your-parcel

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