HOW TECHNOLOGY AND INNOVATION HAVE SHAPED THE COURIER SERVICES

There is no denying the central role that courier services play in the seamless operation of various economic activities. Courier services aren’t just an intermediary for a particular sector or business, but they serve an essential part in the functioning of the entire global economy. The use of courier services has increased phenomenally over the last few years and keeps on rising. The boom of e-commerce channels has further fueled the usage of courier services. 

The number of packages that were delivered globally by courier companies in the year 2018 was 87 billion, a sharp increase of 10.8% from the previous year. The United States holds the record for generating the highest revenue from shipping packages, somewhere close to $119 billion. A survey conducted in America for understanding the attributes sought after by customers in courier service revealed that speed of delivery is the most vital factor while opting for courier services. 61% of the respondents want fast delivery, and 63% of them perceive standard delivery to be within three days.  The study revealed that B2C businesses utilize the same-day delivery services of the courier companies the most.  

However, the courier industry was never this fast-paced or prompt in delivering packages. The courier service’s business models and their modes of delivery have evolved over the years.

History of Evolution of Courier Services

The earliest way of transporting messages from one place to another was through human messengers. They walked on foot for miles to deliver confidential documents and personal messages. This type of courier service has its origin all the way back to 2400 BC in Egypt. Then came the era of delivery using animals. Homing pigeons flew from one destination to another, delivering parcels and handwritten letters. Some other animals that served as bearers of messages and packages were camels, dogs, and horses. 

Courier service saw a paradigm shift in terms of operations and the business model in the year 1907, when Jim Cassey launched a courier service in Seattle, later to be known as UPS. This company brought in the concept of daily pick-ups, conveyor belt mechanism for managing packages and also started offering everyday pick-up services. Slowly, it started growing its operations and moved beyond the USA. 

Post the mid-1900s, other courier service giants like DHL, USA and FedEx USA also started coming up. 

As technology started advancing, the courier companies also adapted themselves. They started going online and dove deeply into the use of technology. By the 1990s, all the major courier companies had their website. All the courier service companies started the tracking service of parcels through web and mobile phones.

Thus, the growth trajectory of the courier industry has been exemplary, and it is still innovating and redefining itself. 

Factors necessitating the remodeling of courier companies

The changing times have altered the courier service industry and are continuing to do so. The following factors have made it mandatory for courier companies to re-invent themselves or change their business model:

• A competitive landscape – Post globalization the competition in all industries has increased. The courier services industry is no exception. The opening of borders and granting permission for free movement across borders has led to a significant increase in the number of players. Customers are free to choose any courier service provider that fulfills all their requirements concerning areas covered, delivery speed, reliability of service, and price. Moreover, any private company can function as a courier service company, provided they possess the required license. Thus, to sustain competition, it becomes imperative that companies use the latest technology to alter their business models and gain a competitive advantage

• Changing customer requirements – Gone are the days when customers would wait for a long time to receive a package. The thrill associated with delivering messages to places situated thousands of kilometers away is no longer what drives the courier industry today. Now, this functionality has become a necessity. Customers want fast services and won’t tolerate any delay. The convenience of availing services and a personalized approach are some crucial attributes that courier companies are trying to incorporate in their service. Customers also expect additional services, apart from delivering packages from point A to B. The courier companies are dependent on new technology and innovation for providing these value-added services to their customers

• Changes in industrial and commercial activities – The courier service industry has faced significant changes over the last few years. With the internet boom and e-commerce channels dominating the market, the customer purchase pattern, and the sourcing pattern for courier companies has changed. A large segment of the population makes online purchases and relies on courier services for delivering their packages. Also, various online platforms have promoted local sellers and indigenous crafts & styles. Thus, the practice of purchasing items from a remote location or distant lands has gained relevance. It adds to the burden of the courier companies as they are now responsible for not only providing quick services but also maintaining quality. Hence, courier companies have to be proactive and adapt to the new technology that helps them to achieve this feat.

• Congestion in supply chain networks – Courier companies are a vital part of the entire supply chain for many large businesses. Keeping in line with the above requirements, courier companies have to meet changing customer expectations, go to remote locations for sourcing packages and delivering them, and tackle competition. However, with an expanding population and burgeoning commercial activities there is traffic congestion in the roadways, airways, and the other mediums used for shipping packages. Companies have to combat this challenge to achieve their end goal of fast and last-mile delivery. Since the use of technology is the only way to do so, courier companies have focused excessively on the use of technology.

Thus, it is clear that technology has a big part to play in revolutionizing the courier industry. Technologies like Big Data, Internet of Things (IoT), RFID are in use. Let us have now have a look at how the courier industry is evolving with innovative mechanisms and state-of-the-art technologies.

Shorter Delivery Times

Fast Delivery is the most basic yet significant feature expected from courier companies. People with their packed schedules can’t afford to wait the whole day for the packages to arrive. At times, especially in businesses, timely delivery of consignments is linked to profits. Also, in the case of delivering medical supplies, fast delivery is absolutely essential.

Today, companies offering express courier services to Asia or the USA are the ones in demand. To ensure timely delivery, courier companies are adopting the following practices:

• Route Optimization Tools – Route planner helps the companies in charting out the optimum route that includes multiple destinations and localities. Various such tools like MyRouteOnline, Route4me, ArcGIS have a three-fold advantage :

• They provide the shortest and optimum path between two destinations
• It is the most cost-effective way of ensuring fast deliveries
• It is highly flexible, and the routes can change instantaneously based on the present order status, traffic condition, and the time window for deliveries

Better Tracking of Packages

Technology today has enhanced the transparency level in all services. No matter what field it is, consumers no longer want to be in the dark and expect to receive real-time notifications about the service they are availing. Thus, when it comes to courier service, consumers want to track their packages on a real-time and regular basis. They need to know its current location and estimated arrival date. GPS tracking services are really beneficial in this regard. Owing to its web-based technology, companies & consumers can monitor the vehicles carrying consignments as well as the packages, even if they are out of the country.  Using the package’s GPS coordinates, consumers can track the packages from pick up till delivery. 

Many a time, courier delivery personnel misses the customer and is unable to deliver the package on time. It not only hampers the customer experience but also adds to the transportation & human resource cost of the courier companies. An accurate package tracking service will help consumers to schedule their day and prioritize their activities. Thus, it’s a win-win situation for both courier companies and their customers.

Drone Delivery

The use of drones has revolutionized the courier delivery service. The drone service integrated with the cloud platform has given way to a plethora of opportunities for the application of drones in the courier industry. These drones, guided by the software, are in use by many corporate giants like Amazon and UPS. With companies and consumers becoming more and more tech-savvy, the future of drone delivery seems very bright. 

Streamlined Operational Procedures

Technological advancements have helped in increasing the efficiency and effectiveness of the courier delivery system. The process of courier delivery includes the following stages:

1. Receiving an order request
2. Picking the package/shipment from the customer
3. Sorting the packages
4. Transporting to the designated location
5. Payment for the service

Technology has helped in enhancing the quality of service in all these stages. Apart from a higher standard of service, the additional benefits of adopting technology are:  

• lesser time for conducting the operations
• reduction in human resources required
• reduction in the operational costs 

The use of an ERP system optimizes the process of receiving an order request. The ERP system, integrated with the courier business, automates the entire process of sending and receiving order requests. The basic functionality of an ERP system is to eliminate any information asymmetry and link all parts of a business together, such as accounting, inventory, and human resources. Here also, it performs the same job. The ERP system generates a waybill or lading number for each shipment, followed by sending a message (email or text) regarding this to the customers. It also integrates all this information with other tracking and transport systems. 

The GPS tools and tracking systems help in accurately monitoring the consignment and the employees carrying the package. It ensures that the courier personnel pick the shipment from the correct location and also deliver it to the right address. 

The use of handheld devices such as barcode scanners is helping in streamlining the sorting process of packages in the courier companies. It reduces unnecessary manual labor and leaves minimal scope for error. Also, it speeds up the entire process, driving up productivity. The Radio Frequency Identification (RFID) is another innovative technology that can further reduce human intervention and the chances of error.

Many courier companies like DHL USA are using robots for activities that are redundant and time consuming. The payment system has also gone online for the majority of the courier companies. The introduction of e-signatures has brought down the risk of unauthorized delivery. The data processing is faster with e- signatures. Also, it helps in eliminating the use of paper and its subsequent processing & transportation. 

Thus, all courier companies are digitizing their business processes in a bid to lower costs and ramp up productivity & efficiency. They are continuously innovating and bringing changes in their business model to thrive in this competitive scenario.