Member Article

Parcel Delivery: Getting what you pay for

In a touch economic climate businesses of all shapes and sizes try to trim down overheads to claw back lost profits. As costs rise and sales decrease directors look at the activities and processes that can be trimmed to save a few extra digits each month.

Traditionally in larger organisations the first thing to be scaled back is marketing, followed by employee ‘benefits’ (Fish & Chips Friday) and then, when due a look at reviewing costly contracts. Cutting back on courier services or changing delivery types are a few ways businesses reliant on a delivery network can save money. Reviewing the processes and pricing is something that not every business does or would consider doing if they don’t send parcels out on a regular basis. In this day and age even the smaller businesses could save hundreds reviewing its delivery network.

In business there is no magical money saving wand, even though sometimes we all wish we had one! Making changes to any activity takes time, resources and investment, nothing changes over night. But it is those with the ability to change and adapt to those tough conditions who will survive. So how can SME’s reduce delivery costs…

Understanding, it’s vital that for whoever is in charge of dealing with dispatches in an organisation understands what they are paying for. A same day delivery provided by one courier can be completely different in price and the quality of service from another, let me explain; a courier could send an urgent parcel directly to your recipient, directly from your location to your recipient’s location. Another could collect your parcel, drive half way or to another depot and pass your parcel onto another driver or courier. If you send a same day delivery through the Royal Mail you can expect a same day delivery to go through multiple offices, depots, drivers and vans to reach its destination. So it likes making a cup of tea, there a several ways you can do it, but only you know which ways best.

Usually the type of service a business chooses to use directly affects the cost of that delivery. An organisation can expect to pay more for a ‘direct’ same day delivery, as this is the safest and fastest way of delivering a parcel between any destinations. This type of delivery should be reserved for ‘urgent’ parcels, legal documents, fragile items, spare parts and Tenders. If a business needs to send a same day delivery but is cost conscious then is should consider finding a courier that group deliveries (Deliveries with more than one same day delivery in one journey). So knowing what you pay for can help you save, sending goods via a next day delivery services is the most cost-effective way of sending heavy/important items long distances to customers, suppliers and employees.

Other points to consider when cutting back on delivery services are the rates you are charged. Typically a delivery company will charge you based on the distance the parcel is traveling, the volumetrics and weight of your item and the urgency of the package. Timed delivery has become one of the most popular ways to send parcels, this gives all parties involved an idea of when a parcel will arrive at its destination. Some couriers charge extra for timed deliveries, however local couriers will go out of their way to make big business happy.

Signing up to a contract can sometimes be a huge mistake as you might be required to use a delivery company a certain amount of times per day. By not signing up to any contracts a business is free to float around searching for the best prices on the markets. Many couriers will offer incentives, discounts and free gifts for new businesses using a service for the first time.

What should you expect from a delivery service?

Transparency is vital and you should never feel that you cannot ask questions or query an invoice! Many couriers now offer free delivery insurance, online tracking, online invoicing, online POD and online accounts making booking a job easier than ever. The most important factor to consider when looking to work with any courier is their desire to delivery on time, every time.

The delivery and haulage industries have not had it easy these past few years with increasing road based costs, insurance, tax, congestion charges and petrol all pushing up the bottom level prices of every deliveries. Accompany this with some of the worst winters we have had in years and a transport network that’s not up to scratch delivery companies don’t have much luck in picking up profits and seeking new customers. With a handful or big time couriers going into administration or being bought out should couriers continue to foot the bill for monthly increasing costs or pass the costs onto its customers? One way or another it is likely to be a difficult few years for the ‘delivery’ industry as a whole.

Should the industry be pushing for more us of electric delivery vehicles when profits have plummeted and access to charging stations is limited outside of London?

This was posted in Bdaily's Members' News section by Darren Shaw .