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Increasing Efficiency and Productivity via Mobile Software Solutions
The courier industry is an $80 billion industry that consists of large, dominant players such as UPS, Fed-Ex and USPS, which are responsible for $72 billion of this revenue. The remaining $8 billion is divided between mid-sized couriers ($2.8 billion) and small local couriers who are responsible for the remaining $5.2 billion. Although there is a significant industry gap, the smaller couriers are still competitive in their regions where they can offer same-day delivery where the big players cannot.
Despite the advantage to offer same day delivery, there are many threats to this segment of the courier industry. These couriers are constantly looking for ways to cut costs, improve productivity and offer superior service, so they can continue to be a preferred choice, stay competitive against the large players and grow.
The Detours
Similar to other industries, the courier market is closely linked to the US economy. Recent downturns resulted in decreased demand and revenue. However there are five key areas where mobility can be used to increase demand and revenue and, when not addressed, can be huge roadblocks in the industry. The key areas where mobile solutions deliver tangible results are: managing independent contractors, reducing lost or damaged shipments, controlling unpredictable costs, sustaining a competitive edge and increasing revenue by enhancing service offerings.
Couriers rely heavily on independent contractors, which are cost-effective because they require only minimal overhead and their willingness to “work on demand”. However, independent contractors have limited company loyalty, inconsistent availability and need to be trained and micromanaged more than full-time employees. Moreover, there are increasing regulations on hiring independent contractors for businesses.
In addition to struggling with what “type” of employee is ideal for their organization, couriers are constantly struggling with lost shipments. Several industry audit sources claim that five percent of guaranteed deliveries arrive late each year, which amounts to more than $2 billion in shipping revenue.
Costs related to lost shipments are not the only variable expense couriers are struggling with every day. Unpredictable vehicle costs, including maintenance and fuel, are also presenting a challenge to couriers. The fluctuation of gas prices directly affects the costs, forcing couriers to charge more for each delivery. Poorly maintained roads and careless drivers wreak havoc on vehicles, causing unexpected maintenance and repairs to constantly rise. Lastly, insurance premiums are also increasing, driving up overhead costs even more. With these variable expenses, retaining profit margins while incurring increased costs is a major challenge.
While managing these costs, managers need to keep their prices low and remain competitive and retain customers. New forms of competition are constantly arising across the industry. For couriers who deliver important documents related to payroll or legal materials, email and other ecommerce services have become a real threat. These industry-focused solutions map tightly to the shipping requirements and push out generalized couriers, diminishing the size of their addressable market.
Lastly, couriers have a real opportunity to offer additional services with mobile software products. With sophisticated tracking functionality, couriers are able to offer customer portals that integrate with their mobile product to provide visibility into the “who, what, when and where” of their product.
Couriers have an opportunity to tackle this growing list of threats to their organization through simple, reliable mobile software products.
Mobility that Delivers
How? Functionalities such as GPS, alerts, item level tracking, reporting, and dispatch provide advanced visibility and real-time information needed to better manage their people, assets and activities. This data helps managers make more informed decisions for their businesses.
GPS technology ensures drivers get to their destination without interruption. The data transmitted back from the GPS helps managers track their drivers and ensure they are making the most of each route. Additionally, GPS tracking provides information on the status of the packages back to the customers – right down to the time and delivery location. This helps reduce delivery errors and improves customer satisfaction.
Advanced alerting functionality also drives efficiency. Managers can arrange an alert to be sent when drivers leave their territory. Drivers can send an alert to the office when a package is unable to be delivered. Alerts can also be sent to notify the office when drivers speed, which can help decrease the wear and tear on the fleet and reduce insurance claims. Mass text messaging functionality allows managers to easily communicate and alert drivers when an unexpected pick up occurs or to communicate a detour in their route.
Item level tracking allows the driver to enter package details at pick up and delivery and send this information to the back office for billing purposes as well as proof of delivery.
This delivers accountability for each package, and improves compliance with Service Level Agreements (SLA) and eliminates lost packages.
Reporting is a vital component to all of these functionalities. Without sophisticated reports that can pull this data together and show “what it all means”, all of the information collected is useless.
At a time when the economy is unpredictable, mobile technology is allowing couriers to stay competitive and be efficient. Couriers who use mobile technology for their industry gain an advantage over other players because they are more reliable, cost effective and offer real-time tracking information to their customers.
Choosing Your Provider
There are many mobile companies that offer solutions with GPS, alerts, reporting and other features. But when it comes to choosing who will provide the solution for couriers, the company should be credible, offer reliable service and have proven success with industry leaders as well as mid-sized and smaller, same day couriers.
The provider should be credible and in tune with the industry challenges that couriers are facing and how to provide new, innovative technology that improves the way their business operates.
The provider should be reliable. The data is time sensitive and down time is not an option. It is important that couriers choose mobile solution providers that have a track record of reliability and that partner with multiple carriers so wherever their driver is, they are on a network that is reliable.
Finally, the provider should be proven in the industry. Illustrating the ability to support all sizes of courier organizations and to scale with a courier both for more users or more functionality. As the courier wins new business, adds more drivers or opens new offices, the provider needs to be able to support that growth. The provider should constantly be looking at ways to provide enhanced functionality to the courier that can be seamlessly put into use without interruption – illustrating their commitment to helping their courier customers remain competitive.
Above all, it is important that the provider works with the courier to identify key business problems, areas where a mobile solution can improve efficiency and productivity for their operation and illustrate how they plan to measure improvements in these areas. Once these problems are identified and the solution is in place, the provider should be able to prove how the technology is driving change in their operations through key performance indicators.
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