Spend category highlight: Courier services

Courier services are essential for any business offering home delivery to customers. During the COVID-19 lockdowns the volume of deliveries and couriers increased dramatically. Whilst there has been some regression towards pre-pandemic levels, courier services remain integral to many retail businesses.

The market for courier services continues to change and innovate. From retailers introducing mandatory charges for returns following record levels to new services and technology, this area continues to innovate and offer additional benefits to retailers and customers alike.

At Ebit, we frequently run courier, B2B and B2C procurement activity for retail and wholesale businesses, meaning that we have solid expertise and insight into key providers across the industry. As a result, we can quickly model a wide range of scenarios and fast-track negotiations to achieve fair-market rates. We seek to match the requirements and service expectations to the appropriate provider(s).

Steps for procuring courier services?

  • Understand business requirements: review parcel volume, weight, size and service data. Understand the “as is” picture for the business.
  • Build a specification that best suits business needs: consider standard vs premium, parcel tracking experience, returns process, and warehouse systems interaction. Factor into this projections for the business and any growth or expansion planning.
  • Model scenarios and pricing to indicate potential solutions. This can often be achieved with no need to interact with service providers, due to Ebit’s unique and wide range of insight.
  • Go out to market: negotiate with service providers, utilising Ebit’s knowledge of fair market rates. Being sure to include the complexities of elements such as zoning differences and any add-ons required, such as signatures.

By following this process, we have successfully supported numerous businesses to negotiate new contracts and renegotiate existing contracts (including mid-way through contract). We have helped clients understand which providers best match their requirements, as well as their customers’ requirements.

Courier project examples include:

  • Working with a medium-sized online clothing retailer who were in contract with a courier provider, we successfully re-negotiated rate reduction and re-alignment of contract weight breaks to deliver a £900k (18%) annual saving.
  • Tendering courier services for a men’s fashion retailer which led to a change in service providers and the delivery of a £250k (36%) annual saving. Our work included supporting the change programme.

Do you need assistance with your courier services?

We don’t know ….. but we would happily work with you to find out. We’ll help you understand how a review will benefit your business. If you are able to share some basic data around your current providers and requirements we will be able to advise you accordingly. Contact us to find out more.

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