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e-commerce set to generate half UK winter parcel peak within five years.

e-commerce set to generate half UK winter parcel peak within five years.
Monday February 20 2012

Internet retail is set to generate half the UK's parcel volumes during the pre-Christmas peak within five years, according to new research.

A study by Global Freight Solutions (GFS), found that the number of packages sent by e-commerce firms during November and December last year was 15 per cent higher than the previous year. Director Simon Veale said e-tailers now accounted for 37 per cent of the total volume of items  handled by the country's carriers during the festive period and claimed they were having a significant impact on the UK parcel industry.

He predicted that, if the current rate of growth was maintained, consumer deliveries could make up half the total number of packages shipped in the last two months of the year by the end of 2016 - the first time such traffic will have matched business parcel volumes during the period."A decade ago, consumers were responsible for approximately 10 per cent of the Christmas parcel peak. The increase that we've witnessed since has predominantly been caused by internet shopping and much of that has come after 2006, when e-commerce began to really gain in popularity.

"It shows no sign of slowing down. Instead, we believe that the more frequent use of smartphones and tablets to buy Christmas presents on-line will fuel further parcel growth and that, in turn, means home deliveries may well catch up with those destined for business customers by 2016."Given that much of the parcel industry has historically been geared to handling business parcel traffic, this represents a major milestone. Parcel carriers are doing everything they can to embrace such change and, in fact, managed to cope with unprecedented levels of e-commerce parcels in the run-up to the Christmas just gone.
"We have also recorded a distinct trend among e-commerce firms who understand the consequences for their own business. An increasing number appreciate the need for contingency and are looking for the support of more than one carrier to add expertise and capacity."

GFS analysed preparations by carriers and their clients from the start of November until the end of December. The company found that the impact of the recession caused a reduction of almost two per cent year-on-year in parcel traffic to high street stores stocking their shelves in time for the festive trading season.
Meanwhile, consumers, perhaps conscious of the delays in present deliveries during the snow-hit Christmas in 2010, began their online shopping in earnest during the week beginning 22nd November - a full seven days earlier than previous years.

In addition, whilst there  was usually a clear consumer parcel peak lasting about a week, GFS found that the volume resulting from e-commerce in November and December 2011 remained consistently high for a month with well in excess of 4 million new parcels entering the UK delivery network every day - up more than three per cent on the year before.Mr Veale described how projections based on current data from within the parcel industry suggested that consumers and businesses together would be contributing in the order of 4.75 million new items daily by December 2016.

He revealed that the need for e-commerce firms to maintain effective distribution throughout the year and the pre-Christmas peak in particular had generated a stream of enquiries from online retailers following the decision by GFS to release its multi-carrier delivery management software available without charge in October.
The software, known as GFS Selector, assists firms with their order processing and allows them to ‘track, trace and manage’ deliveries via a secure website.
Mr Veale stressed that the continued effect of e-commerce on the retail sector heralded further "evolution" for the parcel carriers which serviced it.

"Whereas parcel carriers used to experience a comparatively quiet period once the pre-Christmas rush was over, it appears that they will do no longer. High street sales used to begin on Boxing Day but, thanks to the internet, retailers can trade on Christmas Day itself when the 'bricks and mortar' stores are still closed.
"If that pattern continues - and there's no evidence in the data that we have analysed to suggest that it won't - it means e-commerce firms having to carefully consider how they manage deliveries not only up to but beyond Christmas Day, something which they have never had to do before.

"However, the indications are that more and more online retailers are now truly beginning to realise the critical importance of having reliable distribution to their chances of capitalising on the e-commerce boom."


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