Staying a step ahead of the CEP crowd

CEP operators know they need to invest in optimising their systems, but would rather wait until parcel volumes start increasing again before they make any significant purchases.

In the meantime, cost savings that require limited investment are more favoured – most notably in robot and AI development to alleviate ongoing labour shortages in the distribution centres.

But this doesn’t reflect how 2023 has been a banner year for innovation in the Last Mile, which accounts for over 50 percent of the total cost of handling a parcel.

Fuelled by the fresh outlook of startups cornering niches in the sector, the Last Mile has become fiercely competitive – but is lowering prices in the pursuit of end-consumers the right approach?

Download ‘Courier, Express & Parcel 2024 Outlook: Future-focused flexibility’ to learn why there are larger priorities at play than price in the Last Mile.

Finding the right approach for your business

A good balance, rather than the lowest prices, is key to cracking The Last Mile. A flexible set-up will enable CEP operators to be equally effective in both densely and sparsely populated areas.

The best approach is to find the right partnerships, strengthen customer loyalty using programmes not too dissimilar to air miles, and know the local ‘Slipper Distance’ – how far end-consumers are prepared to locally travel to pick up a parcel.

In an industry in which parcel volumes fluctuate so wildly, big operators are being increasingly drawn to the potential of ‘Dynamic Parcel Networks’ – the bigger the overview of operations, the more of a difference data can make.

The networks enable operators to avoid sub-optimisation and uncoordinated processes and save money internally: fewer costs equals more earnings.

Nevertheless, there will never be a ‘one size fits all’ solution, only lots of different ones.

Read our report ‘Courier, Express & Parcel 2024 Outlook: Future-focused flexibility’ to find out what innovation is the best fit for your business.

Focus on solutions to industry challenges

CEP operators face a multitude of challenges, but fortunately there are just as many solutions to choose from – the key is picking the best fit for their business:

• End-consumers increasingly want green deliveries, so CEP operators need to prioritise carefully: when speed is more important than sustainability, for example
• Startups are driving up competition in the Last Mile, and this is a distraction at a time when CEP operators should be optimising internally. Instead of competing, they should work with and learn from startups.
• CEP operators can reduce labour challenges with relatively low-cost tech that can help increase profits
• ‘Dynamic Parcel Networks’, which require a larger investment, offer untold potential profits across an entire CEP network through data leverage
• Many solutions to industry challenges originate at startups or through collaborating with them. That’s why the PIP Startup Innovation Award Competition is one of  Parcel+Post Expo 2023’s most eagerly anticipated events

Questions to consider heading into the future

Along with providing solutions, the report also addresses and answers some pretty interesting questions about the future of the industry – not least thanks to the input of four experts, who are all jurors at the PIP Startup Innovation Award Competition.

Among the many findings of the report are:

• The ‘Cost of Drop’ must be prioritised in all delivery strategies
• It’s worth considering whether letter mail should be merged with parcels again
• ‘Transport of Air’ is an emerging motivational benchmark to optimise bulk deliveries
• Lockers are increasingly ticking all the boxes in the Last Mile
• The time has come to fully leverage data in every facet of a CEP business
• Serial shopping is unsustainable, but many e-tailers continue to offer free returns

Within the pages of our report ‘Courier, Express & Parcel 2024 Outlook: Future-focused flexibility’ could be the insight that brings sustained success in the future.