Online shopping boom continues to drive courier franchising opportunities

Courier and logistics companies are grappling with new challenges and growing rapidly as Australians increasingly shop online.

Both Fastway Couriers and Pack & Send are projecting 20% growth in the coming year due to increased demand from online stores.

According to Forrester Research’s Australian Online Retail Forecast, 2010 To 2015, online retailing is set to almost double from $16.9 billion in 2009 to $33.3 billion in 2015.

David Ciantar, general manager at Fastway Couriers Sydney, told StartupSmart the majority of their business now comes from online retail. He says online retailers need to be aware of the whole supply chain to create the best experiences for their customers.

“Current players in the online retail space are certainly showing similar growth. Their projections are quite bullish in terms of showing expected growth,” Ciantar says.

Fastway Couriers this week delivered its 500,000^th carton of wine for 2013, 25% up on wine deliveries last year. Ciantar adds they’re expecting to see 20% growth across all deliveries, including the fastest growing categories of fashion, wine, toys and novelty gifts.

He says operating a franchise system makes rapid growth more manageable, but they are working closely with franchisees to ensure everyone can manage the rising demand.

“We operate under a franchise structure, so it’s easy for us to be proactive with creating new territories and also being reactive to work with our current teams to improve the franchisees capacity. That gives us potential to meet new demand,” Ciantar says.

He adds he’s been working with regional area managers to make sure franchisees have the support, such as access to additional vehicles, they need.

“We work closely with them to make sure when volumes are up, we can cater for them and not let anyone down,” Ciantar says.

The demand boom is affecting managers across the entire courier supply chain.

Earlier this year, Wollongong Fastway franchisee Anthony Hamod shared with StartupSmart that his franchise had been growing 30% year-on-year and he was expecting it to grow by 25% this year.

Courier company Pack & Send is also projecting 20% annual growth, with founder and chief executive Michael Paul saying Australia urgently needs investment in infrastructure to enable start-ups and small businesses to successfully navigate the flood of demand.

“We’ve already experienced 20% growth in consignments going through our business in what’s a tough economic time, so online shopping is having a big impact,” Paul says.

“It’s important to recognise the shift in the volume of parcels and where that’s going to. A lot more deliveries seem to be done in the residential sector as opposed to traditionally the vast bulk of deliveries to business and commercial environments.”

Paul says infrastructure affects delivery, which has a significant impact on the whole supply chain, as well as customer experience, and consequently return business.

“Most people aren’t home to receive their delivery. From a carrier’s perspective, it can take three or four delivery attempts and that adds costs. The customer themselves who have ordered the goods can get pretty frustrated too. And then you’ve got e-retailers who are keen for a better customer experience for fulfilment. There are a lot of things driving change,” Paul says.

He adds initiatives such as improving road, rail and shipping infrastructure to enable the movement of much larger volumes of goods, and doubling the existing 6000 alternate parcel delivery and pick-up locations to 12,000 would boost online businesses.

“There is a global trend towards increasing alternate parcel delivery locations,” Paul says. “With online shopping there are real need for these, because from a supply chain perspective there has been a big and growing shift away to delivery to homes as a result of online shopping.”