Overcoming Three Critical Gaps in The Logistics Value Chain for Efficient Courier Operations


Overcoming Three Critical Gaps in The Logistics Value Chain for Efficient Courier Operations

The Courier industry is teeming with growth, transformation, and disruption. As the world gears up for touching a global parcel volume of 266 billion (annual) and the market is expected to be USD 159.66 BN by 2026, there has been a considerable shift towards automation as well. Stats report that the multi-carrier parcel management software market is expected to be USD 1.4 billion by 2032.

Though global businesses are rapidly embracing automation and digitization for gaining better control and efficient management of their courier operations, challenges continue to evolve. 

What Makes Challenges in Courier, Express, and Parcel Industry so Critical

The CEP challenges are extremely diverse and stem from multiple control points, such as the routing function having multiple variables – traffic conditions, vehicle make, driver, delivery location, starting point, and routing software. 

Further, these diverse challenges are vulnerable to exponential escalation, such as evolving delivery SLAs from retailers, poor address quality, constant route optimization & planning to reduce miles traveled, etc. Along with challenges, multiple disruptions also thrive, such as poor visibility of key milestone events, redundancies leading to cost bleeds, and lack of operational control during the parcel movement. 

Finally, the rapidly increasing customer expectations, poor system integration, and fluctuating markets tend to increase the operational complexities affecting the overall efficiency and sustainability.

While there might not be a single perfect solution for all these challenges across all the business models, addressing key gaps in the entire value chain can definitely help. 

Identifying The Three Critical Gaps in The CEP Logistics Value Chain

1. Integration

Integration is a key catalyst for effortless and seamless working. It has many faces in the CEP context – software suite integration, integration of multiple parties for streamlined communication and collaboration, data integration, technology integration in existing infrastructure, and more.

Poor integration not only affects the quality of operational management but also interferes with productivity and efficiency. 

Even with the adoption of multiple courier management platforms, businesses are unable to come out of process silos because of compatibility issues, lack of information standardization, and poor data management. For example, businesses have the entire list of their courier partners, their pricing, contact information, etc, yet they are unable to prioritize them in a specific manner to improve profits or make sustainable growth. 

Integrating all the ecosystem components and operations enables the processing of the accumulated data and drawing data-driven business intelligence in the form of actionable insights. Robust integration among multiple parties ensures that all the details for tracking a shipment, raising an invoice, or generating a label are available in one place, and the right stakeholders have access to the right information at the right time. 

Such seamless collaboration generates efficiency by reducing manual effort, saving time, and reducing operational costs.

2. Optimization

Like integration, optimization is another gap in the logistical value chain that affects the efficiency of courier operations and has many application areas. Right from the first mile, when a 3PL service provider completes a parcel pick-up to the last mile when the parcel is “out for delivery” – optimization is everywhere. 

What makes it a critical gap in the value chain, is the fact that brands are unable to look beyond one or two optimization constraints. So, either they are optimizing the routes, or they are optimizing the vehicle capacity or their fleet. However, optimization needs to be done for multiple shipments, multiple scenarios, multiple assets, and multiple routes in real-time to actually produce results, such as cost or fuel savings.

Clubbing orders on the go, coupling deliveries with return pick-ups, dynamic routing depending on the real-time road conditions, and optimizing for vehicle capacity to reduce miles traveled for planned deliveries – optimization is a constant process. While automation like route optimizers and vehicle capacity optimizers can solve a few of these problems, when it comes to optimizing at scale, having an agile and smart engine that optimizes based on multiple predefined constraints is the best option.

Such platforms offer a diverse range of optimization rules or constraints that businesses can use as and when required to ensure perpetual efficiency in their courier operations.

3. Real-Time Visibility

Inability to “view” the shipments, assets, and business deliverables in any tangible form can not only spur inefficiencies but mistrust among business stakeholders as well. Being able to check the real-time location or movement of a shipment, movements of a driver out for delivery, fleet movements, or transaction status instills trust and transparency.

It also facilitates better operational control over multiple system components such as 3PL providers, and organizational assets. Real-time visibility continues to be a gap in the logistical value chain of the CEP segment as businesses still face challenges when it comes to last-mile issues such as PoD captures, NDR captures, and secure cash reconciliation. Failed or fake delivery attempts, driver-related non-delivery reasons, and cases such as cash fraud not only degrade the customer experience but also come as a direct loss to the businesses. 

There is a need to look beyond apps that show just the current driver location. Opting for solutions that trap fake delivery attempts and offer smart NDR verification in real time is one reliable solution to leverage real-time visibility in a better manner.

Custom Automation – Moving Towards the “One for Each”, Instead of One-Size-Fits-All

Automation is gaining rapid audience and adoption in the CEP segment and is set to be USD 9.6 BN by 2028. However, 67.4% of supply chain managers are using spreadsheets as management tools and supply chain disruptions are costing organizations an average of USD ​​184 million annually. 

As the business model boundaries overlap with the rise of eCommerce and quick commerce, there is a paradigm shift in the logistics industry as well – automation for “each” use case. Customized solutions that offer end-to-end logistics management via automation platforms that go “deep” instead of “broad” are one reliable way to overcome gaps in the logistical value chain. 

Apart from offering the flexibility to adapt to the fluctuating market demands, such solutions also instill stringent control over the core processes, which fill value chain gaps and steer businesses towards excellence and efficiency.


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