Conventional courier model versus uber-style courier model

By now, most people around the world must have heard of Uber, a mobile application to hail taxis. Operating in hundreds of countries, Uber is valued at billions of dollars. Its business model is very scalable and sustainable. On top of that, Uber basically disrupted the taxi industry in every country. The disruption is so powerful that some governments had to step in to restrict Uber from operating in their country to protect the domestics taxi industry.

Uber works by connecting a driver and a customer through its mobile application in real-time. Upon confirmation of booking, a driver will be assigned to the customer and picks up the customer at his location. The customer’s location will be pin-pointed via GPS. After pick up, the driver can rely on Uber’s map to head to the destination point. This ease of operations has provided convenience for both the driver and customers. Customers can expect much faster pick up and traveling time when they choose Uber taxis as compared to other taxis on the streets.

There are other such mobile applications developed for the courier industry. Similar to Uber, these mobile applications aim to match up a courier and a customer in real-time. Customers will submit a request for courier through its mobile application and a nearby courier will be assigned the job. The main advantage of using this mobile application is faster pick up and delivery speed.

Will this mobile application for couriers disrupt the courier industry like how Uber disrupted the taxi industry? It is unlikely.

The main reason being the perceived reliability of the delivery. Unlike sitting in a taxi where customers will witness the delivery of the service first-hand, customers feel unsecured to hand over their parcels to couriers via these mobile applications. One reason for this is the ease of courier application and little to no training given. Customers wanting to have their fragile items delivered will be more concerned about the training of the couriers. Customers will trust courier companies more than these third-party courier mobile applications.

Furthermore, many courier companies in Singapore such as pca masters have already developed or are in the process of developing their mobile applications which are similar to Uber application. The only difference is that the couriers in charge of those deliveries are all in-house. This will offer customers better reliability and security of trained couriers on top of the benefits that a mobile application can give. Unlike conventional taxi companies which fail to keep up with technology, courier companies are more responsive to technological changes.

Customer service versus pricing for logistics services

Standing from a customer point of view, will you be more concerned about customer service or pricing for logistics services in Singapore?

This is the issue we want to tackle in this post – whether the vast majority of Singaporeans are more concerned about customer service or pricing when choosing between logistics companies for their logistics services.

From my personal experience handling the sales for a logistics company in Singapore in the past, customers usually base their decisions on the prices of the logistics services. It is common for customers to ask around multiple logistics companies for quotations so that they would be able to compare the different quotations. More often than not, they would choose the logistics company that offer the lowest price to them. Some customers may even tell the logistics companies upfront that price is the most important factor they are looking at when making their purchase decision. There is a higher occurrence for this when logistics companies are dealing with corporate customers. Corporate customers usually have routine deliveries so they are looking at outsourcing logistics services to a logistics company for the long term. Hence, cost savings can be significant from a slight difference in prices when accumulated over the long term. As retail customers usually demand for ad hoc and mostly one time delivery service, they are less price sensitive. In fact, most of them are more concerned with customer and delivery services. They want their deliveries to be carried out urgently and on time.

Personally, I would look at customer service before pricing when I am choosing a logistics company in Singapore to outsource my logistics operations to, regardless of whether I am doing it for myself or on behalf of an organization. I would rather pay more for a better service. For instance, a better service will mean smooth delivery and quicker delivery statuses’ updates.

Most of the people, including myself in the past, think that there will be a trade off between customer service standards and pricing for the logistics services offered by various logistics companies in Singapore. PCA Masters Pte Ltd will prove you wrong. If you check out their rates, you will find that their logistics services are priced at very competitive rates in the market. Additionally, you can engage their logistics service to see for yourself their service standard – it’s absolutely excellent. Deliveries are promptly carried out with quick status updates. No sweat at all.

Booming E-Commerce Businesses aid the logistics industry

There is a huge trend of starting E-Commerce businesses in Singapore. The number of E-Commerce start-ups has been rising rapidly over the past few years, following the success of some high-profile E-Commerce businesses such as Love Bonito, Zalora, and Lazada. E-Commerce businesses has grown to be such a formidable sector that they affects the competitive landscape of retail industry.

As opposed to the traditional retailing model that needs a physical retail outlet, E-Commerce businesses do not have the need for the outlets. All the goods are simply stored inside a warehouse and shipped to the customers directly whenever they make an order. This allow the E-Commerce businesses to offer better pricing to the customers due to reduced costs (such as costs saved from the elimination of the need of retail rental space). Hence, customers these days are turning towards E-Commerce websites to make their purchases.

The boom of E-Commerce businesses benefits the logistics industry as most E-Commerce businesses outsource the deliveries of the goods to logistics companies in Singapore. It is a smart move to do that as it allows the E-Commerce business owners to concentrate on their core specialty and saves time to think of ways to further improve their businesses. As the sales of the E-Commerce businesses increase, the delivery volume increases which in turn make up the sales of the logistics companies.

With the increasing delivery volumes, logistics companies in Singapore are finding ways to optimize their delivery process and monitor the whole operations more efficiently. Some measures currently adopted are a tracking system to track the delivery status of all the parcels and a route optimization system to optimize daily routes between different delivery locations.

If you plan to start or has already started an E-Commerce business but are currently managing your deliveries in-house, I would suggest you to consider hiring a Singapore courier firm for your E-commerce deliveries. The financial, operational, and overall business strategies make sense for you to do so.