By Jonny Mocton, CEO at ITD Global, the international logistics and ecommerce management and delivery management specialist.
So peak was interesting. Having been in the industry for over 20 years I would say it was possibly the peakiest peak ever in that it was the busiest and the most condensed. Of course, Black Friday was very late on the 29th November and I think, due to ongoing concerns about the cost of living, people were more careful about spending and were looking to see what discounts they would be offered.
In mid-November some of the less seasoned members of our team were a bit bemused as to the lack of volume but as someone once said to me ‘Christmas always comes…’ – and it did. As a result, our busiest week was at the start of December with around 450k parcels – up around 20% on the previous year.
Overall, the carriers performed well. This was despite the evolving provider landscape we have seen in recent years. Of the handful of end mile UK logistics providers, one (Evri) has just been sold, and two are actively looking for buyers, although investment in the Royal Mail as recently been agreed. This risks uncertainty to the market as this will inevitably bring forth changes in areas such as cost and culture. Our teams have to quickly assess how these changes may impact the service to our clients.
The UK logistics market continues to be very appealing to investors at the moment due to the low prices of domestic shipping compared to Mainland Europe alongside the fact that the UK’s ecommerce market is the 4th largest in the world by value, behind China, USA and Japan. As a result, I think we will be facing this uncertainty for some time and there may well be more change to the sector.
There were a few well documented hiccups with Yodel but our business model enables clients to change carrier easily, if necessary, without any penalties. So, we were able to divert customers’ volumes to other carriers. And let’s face it – we were lucky with the weather with limited disruption to both domestic and international deliveries.
We also saw our relationship with Royal Mail grow pretty much from a standing start and over peak 10% of our volume went through them. There seems to be a change of attitude there, perhaps ahead of the investment by EP Group, and we found them to be reliable and competitive, particularly for smaller, domestic parcels.
Our international traffic also saw an uplift with volumes. It isn’t without its challenges though with Air Freight costs particularly high in part due to the reduction of passenger flights to and from the Far east by some airlines due to flight exclusion zones over places like Iran and Iraq making them less viable. In addition, the Chinese online companies like Temu are moving huge amounts of product to the UK and Europe making competition for freight space high.
Most of our growth came from existing clients who are doing well despite challenging conditions, and we saw a significant increase in UK e-commerce in the pet food and pet care sector. We continue to be a nation that loves our pets!
Moving forward things look positive for the industry. Alongside the ongoing growth in the UK ecommerce market which shows no signs of slowing, we and our clients are finding that exporting to Europe post Brexit is actually not as difficult as it could be so we are seeing growth here. There are also huge opportunities for imports from places like China, despite the Air Freight costs which we believe will level out over the coming months. To support this we recently appointed three new experienced Business Development Managers (BDMs) to support the growing demand for international delivery, freight and parcel solutions. We have expert teams on the ground in key locations such as China, the United States and the United Kingdom facilitating easier communication, better control and simplifying the cross border selling process.
That said, end user expectations remain high with time frames, visibility and regular communication the key elements and so tech investment is key. For clients the ability to meet and exceed these expectations are a priority and none of us should take our eye off the ball.
