Delivery leader says Amazon will squeeze prices
Hoy Yen Hooper has nearly two decades of experience in the logistics industry in Australia and New Zealand, from DHL and Deutsche Post to Sendle, and was recently appointed COO of CouriersPlease.
She spoke to Internet Retailing editor Heather McIlvaine about how delivery providers are preparing for Amazon Marketplace and its anticipated impact on e-commerce in Australia.
Heather McIlvaine: Amazon is reportedly in talks with a number of large and small logistics companies ahead of its Marketplace launch. What capabilities do you think they’re looking for?
Hoy Yen Hooper: Amazon operates an absolute customer-centric model and when it enters our market, it will be looking for logistics companies that share the same values and possess the capabilities to continuously enhance customer experience.
Amazon will be looking for small and large logistics partners that offer differentiators, such as automated notifications to the receiver, a dense and solid delivery network, a hassle-free returns solution, and express and after-hour delivery services.
HM: What’s in it for delivery companies to partner up with Amazon?
HYH: Amazon is an e-commerce giant that accounts for a large percent of online sales in the US, UK and other European countries. It has never been Amazon’s strategy to focus on one single logistics provider, and its entry will provide tremendous opportunities for logistics companies operating in Australia to increase volumes within their delivery network.
With these volumes, logistics companies will be able to optimise their network by building density. There is no doubt Amazon will put pressure on logistic companies to improve their delivery capabilities in service quality, such as on-time delivery and traceability, speed, consistency of delivery time and coverage (e.g. on-demand delivery), which in turn will raise the overall network performance.
HM: Do you think the current logistics infrastructure makes it possible to offer same-day delivery on a large scale?
HYH: With the growing e-commerce market in Australia, same-day delivery is starting to be offered in certain parts of the country, particularly our capital cities, with CouriersPlease specialising in [this]. However, I don’t believe the Australian logistics industry has the infrastructure for same-day delivery outside of these areas.
Given the size of Australia, finding a cost-effective solution for deliveries into regional and country areas remains a challenge. For this to happen, the network must be enhanced to provide a seamless handover from one node to another at a commercially acceptable cost.
HM: What is the biggest challenge logistics companies face as Amazon scales up its offering in Australia?
HYH: The biggest challenge for logistics companies as Amazon enters the market will be a squeeze on delivery prices, which means that logistics companies will need to do more for less. If Amazon can’t find a suitable partner, it could potentially start building its own delivery network.