Delivery delays push businesses to seek postal alternatives

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  • Smaller independent delivery services say they have seen an increase in business as consumers and businesses seek alternatives to the multi-week delays reported by Australia Post.
  • The number of companies doing business online each month has more than doubled from pre-pandemic levels.
  • Independent delivery companies have the ability to bypass some of the current issues facing logistics systems and take over.
  • Visit the Business Insider Australia homepage for more stories.

The extended shutdowns that have shut Australia’s two largest cities since June have only worsened delays for Australia’s major delivery networks.

But smaller, niche delivery services say they have seen an avalanche of new business from companies and individuals “looking for alternatives” to avoid the current logistical mess.

Along with the meteoric increase in e-commerce since the start of the pandemic, delivery delays are compounded by the 200 Australian Post workers currently in isolation due to COVID-19 exposure, as well as several trucker strikes in September.

On October 1, the U.S. Postal Service announced it was suspending most deliveries to Australia, as well as New Zealand and 22 other countries.

On October 4, a widely shared photo taken inside an Australia Post distribution warehouse in Victoria revealed mountains of undelivered packages, highlighting the extent of delivery delays.

Michelle Skehan, Australia Post’s chief commercial officer, told 9 News that the current backlog was “not a good situation” as the national postal service was forced to suspend e-commerce pickups in Melbourne for several years. days earlier this week in an effort to catch up on deliveries.

Small players take over

As a result, small independent delivery services say they have seen their business increase as consumers and businesses seek alternatives to delays of up to six weeks reported by Australia Post and other delivery networks.

On the Facebook page of Couriers Please, an independent parcel delivery company, a recent customer posted that he chose the service to deliver a package that had been purchased outside of the three-mile radius of his local government area ( LGA) which it was not able to collect and would take weeks to be delivered via a major delivery network.

“I loved supporting a small business during these times,” the client wrote on his wall.

Eva Ross, director of marketing and customers at Sendle, an Australian delivery and logistics services platform, told Business Insider Australia that she has also observed this change in behavior.

“We have seen an insatiable demand for parcel delivery, especially during the Sydney and Melbourne closures in recent months,” Ross said.

She said the company, which was founded in 2014 and has traditionally served small businesses, has seen its parcel volumes increase by around 92% in Australia’s two largest cities.

“We’re doing Christmas volumes every day of the week right now,” Ross said.

Ross said he was one of many smaller, independent, digitally-focused delivery companies that saw both individuals and businesses rushing to his platform.

They “are looking for alternative parcel delivery networks because they can’t rely on a single provider like Australia Post,” she said.

In addition to companies looking to speed up delivery times, Ross said, individuals are also looking for ways to operate outside of current delivery bottlenecks.

A new group of consumers has meant that the business has become a B2C as well as B2B business.

Ross said startups and independent delivery companies have the ability to bypass some of the current issues facing logistics systems and take over.

A lot of people and businesses “have also turned to us because we are more flexible and nimble,” she said.

“For example, if one of our delivery partners experiences high demand at any given time, we can quickly redirect our package deliveries to another partner or to multiple courier partners across the country.”

The explosion of e-commerce opens the sector to competition

A key story in the pandemic has been the explosion of e-commerce, as stay-at-home orders and travel restrictions have forced businesses to quickly scale up their online operations.

The number of companies doing business online each month has more than doubled from pre-pandemic levels, peaking in July 2020, according to research conducted by Mastercard around its Australian business.

Its survey showed that 60% more merchants accepted online sales in 2020 for the first time, compared to 2019.

In addition, the number of new small and medium-sized businesses in Australia increased by 73% in 2020 compared to 2019, with individuals setting up businesses out of their homes during shutdowns.

Ross said the rise of e-commerce has opened up the industry to opportunities for innovation and disruption.

“We’ve also seen many consumers turn to Sendle for parcel delivery, including businesses,” Ross said.

Like many similar digital delivery platforms, Sendle integrates with ecommerce platforms including eBay and Shopify, as well as platforms like Squarespace with ecommerce capabilities.

This has allowed it to capture an even larger share of small businesses that have been launched in the past 18 months.

She believes that as the country opens up, many of the supply chain problems caused by the pandemic will subside, but the growth of e-commerce will not only continue, but expand the market to other players. .

“It’s a growing industry,” she says.

Ross said digital platforms like Sendle, which offer services that bypass the post office – as well as other innovations like tools that eliminate the need for shipping labels, will drive more retailers and others away. companies of the main delivery companies.

“Shipping is now a key differentiator for small businesses in Australia, so they need choice. “

“People want this flexibility,” she said.

Ross said she believes similar companies in the space will follow suit by expanding their logistics networks to compete.

“We made these partnerships before COVID. But we’ve definitely strengthened them over the past 18-20 months.

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