E-commerce boon for couriers

TRANSPORT companies, especially those tackling the Internet fulfilment market, will be the ones to watch as electronic commerce grows.

Simply connecting buyers and sellers electronically is not enough. The goods sold online must be delivered.

Studies show a delivery delay of more than 14 days is fatal for an online seller.

TPG, the owner of the TNT transport group, expects e-commerce to provide minimum revenue growth of 3 per cent.

TPG’s worldwide annual turnover is $20 billion. Australia Post believes Internet fulfilment will be worth $50 million to them in five years time – and that is a conservative estimate.

Australia Post post logistics general manager Alec Ceselli said e-commerce had forced a lot of companies to change the way they did business.

TNT Logistics director Howard Critchley said e-tailers were demanding faster delivery services.

“There will be growth in express type transport such as couriers and air freight,” Mr Critchley said.

“It will be a case of delivering smaller packages to single addresses, rather than truckloads of goods to a warehouse,” he said.

Mr Critchley believes e-commerce will become the normal way of doing business and Internet fulfilment will, in time, represent 100 per cent of transport industry business.

“It is resulting in products going straight from the manufacturer to the customer and bypassing the retailer,” he said.

Mr Critchley said TNT had created an Internet fulfilment arm that included inventory management, warehousing and delivery.

Australia Post has created its own division to tackle Internet fulfilment.

Mr Ceselli said its approach was to create an ‘end-to-end solution’ integrating payment and processing, warehousing, despatch, delivery and goods returns.

“Our e-deliver project encompasses each one of these elements,” he said.

“Our system allows customers to track where their order is at in the delivery process. The confirmation and tracking of orders is essential.”

However, Chrome Global executive manager business operations Warren Barry said companies should keep control of as much of the Internet fulfilment role as possible.

“We recommend clients have a full e-commerce solution and only outsource to another organisation for delivery,” Mr Barry said.

“At the end of the day most still have to have someone who delivers for them.

“The true sense of e-commerce is to have a facility that lets someone buy or order online.

“That system is then integrated with back office systems such as inventory and financial management.”

Celebrating Lives chairman and former Business News Online Economy columnist Mal Bryce said those economies that had taken to e-commerce were those with good distribution systems.

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