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As the UK logistics industry struggles with demand for deliveries, James Currey, UK Account Director for the Transportation, Logistics and Warehouse sector at Zebra Technologies explains the current biggest challenges for the post and courier market – and offers some useful solutions.
“The UK logistics industry is in flux; competition, a lack of labour, cyber security, and margins are among the toughest of issues faced right now.
Post-pandemic, the entire postal and courier landscape has changed, with personal and business customers demanding faster and cheaper deliveries.
But such demands are proving impossible to meet right now with many prices needing to rise rather than fall; only then can services keep running and costs be controlled.
Across the industry, recruitment is a major worry. It cannot keep up with current vacancies and there is real concern about managing the forthcoming peak periods of Black Friday and Christmas.
An increasing number of competitors is also impacting recruitment efforts because all are looking for talent and labour in the sort of numbers that just aren’t available.
Even when you factor in how busy the big-name online retailers are with orders, tighter margins for them and for delivery companies are squeezing profits.
Daring to be different
Collecting an item from A and delivering it to B has now become a price-driven conversation. When attempting to win contracts, established delivery organisations, those with proven track records and inherent trust from their customers, are being challenged by new entrants to the market.
Many incumbents are experimenting with differentiation to combat this. An increased use of technology to streamline processes, reduce costs, and offer deeper levels of delivery tracking have all been trailed.
But if the sender still wants to pay the lowest price per item, innovation risks being put on hold or slowed. Rising short-term costs are harder to absorb and justify, even if these improvements would dramatically cut costs in the longer term.
Postal and courier boardrooms must carefully balance value vs transformation. They know online shoppers aren’t interested in how much a brand pays them to deliver their goods. They just want it next day, same day, or even within the hour.
Consumers don’t want to pay much at all for that privilege either. They want free delivery and returns as standard, representing an imbalance in consumer demands versus the logistics realities.
This extra burden of expectation is being felt by businesses. It isn’t easy to provide quicker, cheaper, and more flexible delivery options when those high vacancies and low labour numbers necessitate increased wages to attract workers.
But the harsh truth is operations and profit have already taken a dramatic hit in the perfect storm of the last five years – with societal changes, high inflation, rising fuel costs, and delays in shipping due to Covid-19 all contributing factors.
Decisions must be taken
For leaders in the logistics industry, there are important choices to make. Quick, short-term, tactical, and cost-driven decisions should be replaced with strategic medium to long-term ones.
Focus is needed on increased future productivity in depots and distribution centres, while implementing technology to drive on-the-road speed and savings.
Zebra is committed to providing the right insight for our customers to make smart, nimble decisions about what actions to take now, and what plans are for tomorrow.
Our years of experience in logistics has helped put in place efficient digital and technological solutions to augment what is still a very people-centric model.
The UK’s postal and courier fleet has been transformed by thousands and thousands of full-time and part-time workers dressed in their own clothes, using their own cars, and running their delivery schedules from their own personal smartphones.
However, we know there is still a critical role for a professional fleet with branded uniforms, branded vans, and branded rugged devices to control operations. These companies are now winning more B2B and B2C contracts. They are also optimising their pick-ups and deliveries by investing in future-proofed solutions.
The future is coming fast
The push for greater real-time full chain visibility is now a common goal. Using artificial intelligence to reduce costs is another and there continues to be transformation within depots and distribution centres to automate more roles to combat worker shortages.
Looking further ahead, autonomous delivery by car and by truck – or even drone – is an area of exploration that could upend the traditional ways of thinking for postal and courier companies.
Sustainability concerns are also taking an increased prominence. The introduction of electric vehicles, reducing waste at ports, and using rail more often to lower the amount road fuel used are all examples.
Leaders see a strategic need to do more with less. But improvements in efficiencies, reductions in emissions, and managing fewer depots and distribution centres, are not the only areas topping the actions for the C-suite.
Condition-based monitoring, e.g. the temperature items are kept at has become a growing consideration, alongside wider implementation of RFID tags to make goods easier to scan and track through the logistical chain and to identify their destination.
Introducing machine vision too is a vital improvement to automatically recognise images on pallets while scan tunnels (three-sided scanning) also speed up operations. We expect these areas to grow hugely during 2025, meaning postal and courier companies must act now to gain from the beneficial changes on the horizon.
Working with a third-party like Zebra can make a tangible difference to these issues, and our proven track record of delivering for the postal and courier industry means our expertise includes everything from put-away, replenishment, and packing to staging and fleet management plus pick-up and delivery.
Faster, cheaper, more secure
At Zebra, our strategic vision is made up of three pillars: Asset and Inventory Visibility, the Connected Frontline Worker, and Intelligent Automation.
This is built on a strong foundation of data management and analysis through machine learning, harnessing the right hardware to gather and take advantage of that information. This means placing mobility devices into the hands of distribution centre employees and delivery drivers.
But we know postal and courier companies want to reduce costs and waste while also increasing security. They want devices that scan better, last longer, and can be integrated into collection points and parcel shops.
For instance, our 5G-enabled hardware offers precise location fixing through Bluetooth and wireless antennas. Additionally, secure software tools in the cloud allow in-house IT teams to develop and build robust apps to monitor deliveries.
It’s in Zebra’s DNA to boost constant visibility, uptime, and workflow performance.
However, internal technology should only be leveraged if it can offer foresight, preempt problems, and improve ROI.
Mobility devices should only be leveraged if they offer simplified management, higher control, better security, dramatically increased accuracy, and reduced delays.
And for those on the frontline, transformation should only be leveraged if it can offer greater levels of flexibility to adapt to evolving needs while seamlessly responding to changing market dynamics, regulatory demands, or internal processes.
Confidence in uptime is also a key factor. A process must be in place so digital technology and handhelds can be serviced or replaced fast, otherwise people and processes will stand idle.
Even simple improvements to workflow like automatically shipping new rolls of labels to collection points and parcel shops ahead of running out can positively impact productivity and profit.
The right solutions to complicated problems
Working with a trusted third-party like Zebra can also deliver on the industry’s InfoSec requirements, now an important factor in winning logistics contracts.
Rising threat levels hit innovation and delay roadmaps of transformational initiatives. The commercial imperative is to roll out plans quickly to raise productivity and revenues as well as getting (or staying) ahead of the competition.
However, without the right security plan, the risk of reputational damage, financial loss, and stalled operations all become major barriers to much-needed change.
Today’s challenges for the postal and courier industry are complex but they are not insurmountable. One e-commerce logistics platform has already noted how the industry is clearly undergoing a transition but is starting to see returns.
In its 2024 report, Escher analysed 78 postal operators worldwide and found the sector is showing signs of recovery with 38% of those who responded to its questions reporting positive revenue growth.
We all know that as a final mile logistics operator, delivering on your promises to customers has never been more critical to your success.
Thankfully, achieving that success is within reach right now, and in the future.”
About the author
James Currey has 15 years of experience in the technology industry, driving strategic initiatives to enhance operational efficiency and customer satisfaction. As an Account Director at Zebra Technologies, he is a trusted advisor to the transportation and logistics sector, enabling their digital transformation efforts.
About Zebra Technologies
Zebra Technologies helps organisations monitor, anticipate, and accelerate workflows by empowering their frontline and ensuring that everyone and everything is visible, connected and fully optimised.
Our award-winning portfolio spans workforce and demand forecasting software to innovations in machine vision software with deep learning tools, automation and digital decisioning, all backed by a +50-year legacy in scanning, track-and-trace and mobile computing solutions.
Zebra helps its customers in a number of industries make business-critical decisions, including manufacturing, retail and e-commerce, transportation and logistics, as well as banking, healthcare, public sector and hospitality. Our customers include over 80% of the Fortune 500. We employ almost 10,000 people in 120 locations, with headquarters in Lincolnshire, Illinois, USA.
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