The courier, express and parcel market is moving towards having a more defined influence in the consumer market. The suppliers and the manufacturers in the CEP (Courier, Express, and Parcel) market are becoming digitally more aware. The industry is making significant online retail sales across the globe and has considerable overall growth. The surge and expansion of e-commerce in the developing countries are making domestic as well as international CEP industrialists tap opportunities of delivery and parceling. Concrete R&D in the “last mile” development technology is further aiding growth in the market. As part of the courier industry trends, CEP companies are adopting omnichannel retailing in certain countries which thereby ensure trade and economic growth for the CEP industrialists.
Constraints Faced By The Courier, Express and Parcel Industry
The CEP industry faces hurdles in achieving smooth operations in spite of experiencing growth trends. There is a lack of efficient organizational structure and innovative technology to support uninterrupted growth in the sector. Thirdly, factors such as the last mile delivery cost influences almost half of the supply chain costs of the CEP industry.
Challenges in the last-mile delivery services
To minimize these three constraining factors, CEP companies are striving to merge the last mile delivery system into the existing services. According to the experts, this will be enough to accommodate the growing consumer expectations and obtain user satisfaction. The last mile delivery system is undergoing aggressive operational transformations with the CEP companies looking for alternatives such as delivery lockers, drone deliveries, automated vehicular transport as well as crowdsourced deliveries.
The end-users are armed with social media and the far-reaching power of the internet. This helps the users in making choices between companies and giving reviews to them and their services. This has increased e-commerce competition throughout the global industry and led to a transformation in the “last-mile” delivery system. Last mile delivery system is increasingly becoming door-to-door, through access points or crowd storage service. Additionally, the concept of adding value to the parcel delivery system is an important trend that is impacting delivery service. It is predicted to have a sustained growth on a global scale.
Postal organizations across the world are facing revenue challenges due to the dramatically decreased volume of mail. This has further led to increased competition in the delivery of parcel products. More and more companies are trying to reduce the revenue gap using services and supply chain.
Lack Of Organizational Structure In The CEP Companies
The market growth, organizational structure, technological advancement, as well as consumer expectations are factors that influence CEP companies. The dynamics of these static, semi-static and observantly dynamic states also have an influence on the structure of the CEP companies. Companies are increasingly looking for developing a supportive infrastructure that allows a higher level of efficiency in the CEP sector.
The organizational structure of the CEP companies shows a high degree of complexity. It is common for courier and express companies to work on the franchise model and subcontract orders and are thereby lack an in-house pool of human resources. Contracting and franchising also endanger the brand name and the marketing strategies of the contractor to merge with the main CEP company. Hiring contractors leads to a dynamic business state that has its share of uncertainties.
Increasingly, CEP companies are adopting proprietary software, but this diffusion of innovation is bleak and limited to large CEP companies only.
The CEP industry also suffers from a high employee attrition rate. Recruits are frequently joining and switching because of relatively low wages coupled with the mental and physical stress of delivering. This compels the CEP companies to often deal with a large number of employees that are fairly new to the company operations. As an operational hazard, the CEP establishment deal with the challenge of a round-the-year training service for the employees.
Lack of Technology and Innovation
There is a lack of technological upgradation in the logistics and supply operations n the CEP industry. The consumer base is vast and the lack of efficient and standardized technology makes the job of data analytics more cumbersome. This makes the CEP companies often resort to additionally outsource data analytics and marketing strategists to come up with relevant inferences that can help business.
CEP is an upcoming and flourishing industry owing to the parallel expansion and growth in the e-retail services. Most of the products and commodities are being ordered online and this generates more business and opportunities for the growth of the CEP industry. With a good operational set up alongside the application of new and innovative technologies, the CEP sector can grow at a higher rate and with more efficiency.