Over the weekend I read on social media in in the press about the financial challenges being experienced by another parcel carrier. 2000+ jobs on the line if you believe the reports.
At Proactive Despatch we are slightly different in the fact that we facilitate urgent response same day delivery, rather than multidrop next day parcels but we are still in the same sector. Now I must make it clear I know little of the company that has been subject to media scrutiny this weekend other than they appear to have some great people who are now uncertain of their futures.
I also do not know the reasons for their current challenges.
I believe that some of the service challenges that we all moan about are partly the fault of the industry, but some blame must sit with us as consumers. In my quarter of a century in the industry I have seen procurement teams have focussed on achieving the best possible cost on services for the businesses they represent. I get it costs savings are part of the role.
Some parcel carriers bend to these price demands because they know if they don’t one of their competitors will. The procurement team are delighted because they have the best cost and can save their company lots of money but, the service has been sold so cheaply that for the carrier to make any sort of return their service creaks. The customer then gets frustrated about the poor service and criticises the carrier to all that will listen. They eventually leave the carrier as the carrier has failed to deliver the service, then find someone else who will work at the same rate. And the cycle continues.
At the same time carriers are put under pressure to rightfully:
- Invest in new vehicles.
- Tackle CSR issues
- Pay their teams fairly.
- Something must give somewhere.
Businesses must be brave enough to be PROUD of their price and show the VALUE in what they do. At Proactive we serve lots of Procurement Managers and their wider teams that see the bigger picture, they want value for money, not a cheap price. They like us, want a relationship that is mutually beneficial. One that works long term for both companies. One where the supplier becomes a trusted partner.
If we want the service of the overnight parcel industry to improve a good start would be:
- For sales teams to sell at a rate that is commercially viable and be proud of their price.
- For businesses to start looking for the value in a service rather than the lowest cost.
Also, all this free delivery malarkey what is that all about?
Nothing in the world is free we need to stop talking like it is.
Show the customers you serve the value.