Hermes transforms data infrastructure to speed parcel deliveries

Parcel delivery is a cutthroat business in the U.K., with margins of just pennies per parcel.

“If you can charge an extra penny for a little bit of enriched technology or an enriched customer journey, or if you can take a penny out, you can really turn the dial on your profit,” says Chris Ashworth, CIO of Hermes UK.

The bulk of Hermes’ business comes from delivery contracts with high street and online retailers — “80 percent of the top 100 retailers are with us,” says Ashworth — but it also has a network of over 4,500 parcel shops, from where smaller companies and individuals can send packages.

Hermes carried 10 percent of the U.K.’s parcels in 2017, second only to Royal Mail, the national postal service (39 percent), according to the Pitney Bowes Shipping Index. But Hermes and its clients are feeling the heat from Amazon, which carried 7 percent of U.K. parcels. And with four in ten Britons having access to the Amazon Prime program and its free one-day delivery according to Mintel, that pressure will only grow.

For Hermes, however, Amazon represents both an existential threat and a lifeline, as the company’s road to transformation began with a shift to cloud infrastructure provided by its chief disruptive business rival.