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Record parcel volumes... but falling on-time delivery

Blog

Record parcel volumes... but falling on-time delivery

Ian Kerr

Peak season 2017 may have been massive, but on-time delivery fell to 85% according to the latest data from the IMRG MetaPack UK Delivery Index.

First, the good news

Online retail delivery order volumes were up 17.2% year-on-year in December 2017, following 2.4% year-on-year growth for December 2016 (only 2.4%). The low 2016 figure is in part attributed to Black Friday pulling orders forward into November.

In December 2017, the Monday of the week before Christmas saw particularly high demand. According to IMRG, that day is becoming established as a major online shopping day, as it psychologically represents the last day that shoppers feel genuinely confident their orders will arrive on time - despite this not being the last day on which many retailers provide guarantee of delivery in time for Christmas.

The bad news

The percentage of orders arriving on time fell to its lowest level (85%) since IMRG started tracking it in 2011. According to Andrew Starkey, Head of e-Logistics, IMRG, there were some factors that could have influenced this figure:

  1. December saw some extreme weather conditions across Scotland, Wales and northern England, which caused delays to movement of stock.
  2. Delivery networks were hit with record volumes for this period, including the late surge in orders that was higher than anticipated.
  3. The high use of next day delivery put additional pressure on delivery windows and, in some cases, is an example of businesses giving their customers something they haven’t specifically asked for. This option is often provided by default now by some retailers and, as many of these next day orders were not technically requested or required next day, the low on-time delivery rate is more noticeable to the retailer than the customer.

What can we learn?

The easy conclusion to draw is that peak season will become increasingly extreme, and a drain on resources and profitability for postal operators and parcel delivery companies.

Sales events such as Cyber Monday and Black Friday may drag some Christmas sales into November, but December volumes continue to grow.

There is also pressure on picking-and-packing capacity at warehouses and fulfilment centres.

The IMRG figures don't delve into the problem of what to do with parcels that aren't delivered first time. Would alternative last mile delivery options help reduce the number of failed first-time deliveries?

Plenty to think about for postal and parcel delivery managers around the world over the coming months.

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