European Parcel Services Continue to Expand Their Networks to Keep Up With Demand Increases

| By Stan La Haye | Senior Manager, Transportation Europe | Chainalytics |

To mention that digital connectivity has fundamentally changed consumerism forever provides no groundbreaking revelation. Consumers and supply chain professionals across the globe recognize e-commerce sales continue to grow exponentially, and as a result, parcel companies across the globe are advancing their delivery networks, options, and services to meet demand challenges and service expectations.

Research shows that little evidence exists to suggest these shifts in supply chain operations and fulfillment methodologies will dwindle in the coming decades. For example, a recent Royal Mail report finds 26% of UK consumers now shop online at least once a week, up four percent from last year’s finding of 22%, and two-thirds (68%) shop online once a month, with 3% of consumers doing so daily.

With online trends fully cemented into everyday operations, here are a few changes parcel companies across Europe are piloting to stay competitive in today’s marketplace:

  • Germany – Beginning with 20 urban communities, DHL is expanding preferred delivery times for any DHL shipment, but it comes at an additional cost. The new service, operating from 6pm to 9pm, will initially be offered at a promotional price of €1.99 per package before moving to €2.99 per shipment once the introductory period ends. Although the service only involves specific networks now, growth across other areas is anticipated. DHL, headquartered in Bonn, Germany, is already one of the largest parcel companies in the world but has also been working to expand its US operations in recent months to meet consumer needs and capture a large portion of the North American market.
  • Hermes, also looking to expand its German service offering, has invested heavily in a new route planning system it plans to implement nationwide upon completion of a comprehensive pilot program. With the new program, Hermes will offer shorter delivery times, better respond and adapt to current and emerging traffic conditions, and reduce CO2 emission through delivery optimization.
  • Netherlands – DPD, also headquartered in Germany, is piloting a new service in the Netherlands known simply as “ParcelLetter” that allows consumers to receive parcels, letters or other items that do not require a signature or “door service.” Items will be fully trackable through DPD track and trace functionality, and while the pilot program will only initially be available in the Netherlands, it plans to expand the service to other European countries soon after. DPD currently has parcel service in 22 countries across Europe.
  • United Kingdom – UK-based APC Overnight recently launched two new services known as “APC Pin Point” and “APC Called,” both of which will help small and mid-sized enterprises (SMEs) meet consumer demand concerning the tracking and visibility of parcel shipments. Pin Point allows a consumer to track the driver’s general whereabouts through a proximity map outlining the driver’s most recent stop in comparison to the consumer’s address. The service can be through the provider’s website and only applies to services out for delivery that particular day. APC Called works in conjunction with Pin Point and other delivery services and allows a driver to send an “eCard” or emailed calling card in the event the customer is not home to receive the delivery. The “Called” program is designed to increase the visibility of the parcel whereabouts while making it more convenient for delivery customers to reschedule their package arrival to a time that works best for them.

While these are just a few of the new parcel programs spreading across the industry, we expect other companies to introduce additional initiatives to help optimize last-mile delivery that happily balance cost and customer satisfaction levels. With the parcel market changing at a rapid pace, shippers and retailer need to maintain a strong awareness of new delivery opportunities as well as the numerous possibilities that may negatively or positively impact operations, service levels, and cost levels. Organizations seeking to improve and enhance their delivery operations should explore parcel optimization strategies to determine the best options for their market and transportation budget.

Stan La Haye is a Senior Manager within the Chainalytics Europe practice. Stan leads the European transportation consulting practice where he helps global organizations with their transportation procurement and management strategies.

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