Interesting as many companies years ago had their own logistics and delivery drivers, then outsourced it due to costs and now we've come the whole circle back to this model so we can mprove customer service.“We would do it very pragmatically with no disrespect to our logistics partner, Australia Post,” Mr Nash told the Financial Review.
“It would be because we were at that point where we can actually hire someone and do deliveries for a bit cheaper than they can do it, or partner with other people,” he said. “It really does come down to the numbers.”
“Australia has 300 people per square kilometre in the big cities, so we’re even more dispersed [than Canada] – that comes at a cost to any logistics partners and would come as a cost to us if we wanted to do it ourselves.”
Duncan Brett, CEO of same-day delivery business Sherpa, said more retailers – particularly fashion retailers – were considering taking warehousing in-house after unsatisfactory third-party experiences.
But demand for outsourced last-mile delivery services from online and bricks and mortar retailers such as Woolworths, Chemist Warehouse and Apple is booming.
“The conversation [with retailers] is how can you guys help us because we can’t possibly do this ourselves at scale,” Mr Brett said. “To buy trucks, cars, vans and employ teams of people is very expensive.”
“We saw some retailers like JB Hi-Fi do it during COVID and before Christmas because they wanted to redeploy their team members, but short term the fixed-cost model of employing drivers and vehicles is massive,” he said.
Sherpa’s delivery volumes rose more than 200 per cent last year and were growing more than 150 per cent this year, fuelled by demand for same-day and express deliveries.
“Online growth has slowed in the last two months, but we’re still doing 150 to 160 per cent year-on-year growth,” he said.
“We know it won’t go back to what it was. Some customers will go back to the store but a lot more have realised the convenience and value and variety of online, and they’re here to stay.”
Catch Group chief executive Peter Sauerborn said the online retailer and marketplace operated its own warehouses but would consider using third-party logistics providers if it needed extra capacity.
“We see our ability to operate these [warehouses] as a core skill that we have developed over time because it’s such a critical part of what we do,” Mr Sauerborn said.
“We’d lean more towards insourcing generally, but there are always a number of cases where we’d consider using partners as well.”
Catch, which reported a 96 per cent increase in gross transaction values in the December half, uses Australia Post and other carriers for the last mile and is experimenting with different ways of working with carriers to improve delivery speed and reduce costs.
“We have enough volume and scale that we can do things differently to interact with the carriers so they can get packages much faster to our customers,” said Mr Sauerborn.
“We’re always looking at ways to reconfigure our operations to speed things up and reduce costs in the system.”
& yes DT is onto it, thank god.
