Analysis

Under the spotlight: peak preparations from DPD, FedEx and Yodel

The next two months will be a testing time for everyone in the multichannel retail world, none more so than the delivery companies, who are at the sharp-end of service provision. This time last year you would have been hard-pressed to find someone who was seriously predicting the imminent demise of City Link, a name rarely mentioned at all now; from one of the big players in delivery to a footnote, in less than a year.

With cliches such as still all to play for, and anything could happen waiting to trip up anyone talking (or writing) about the impending peak, we’ve been looking at what three leading names in the delivery world are saying about their preparedness. It should be pointed out that in no way are we holding any one of these up as either role models or car-crashes in waiting. They do, however, occupy interesting territory in the delivery ecosystem – a global giant, a high-volume operator that covers almost the entire UK, and one that despite the fact it is no minnow, has a reputation for a more boutique approach to the way it conducts itself.

DPD

So far, this has been a big year for DPD; among other things it won a Queens Award for Enterprise, and opened its £100m state-of-the-art hub.

Having kicked off planning for the 2015 peak back in January, DPD says it anticipates a 30% increase in parcel volumes compared with the same period last year. This is on top of its 20% year-on-year growth. DPD has a great reputation in the delivery and retail sectors and with the end customer. Part of its success is attributed to its steadfast reluctance to over-reach its capability, sticking to what it knows it can excel at and not over-promising. It’s a strategy that many in business – regardless of sector – might benefit from.

In addition to taking on 1,000 extra staff, DPD’s other key peak period preparations include:

  • Over 950 new, permanent DPD drivers recruited and trained in time for peak;
  • Four brand new, purpose-built, state-of-the-art, 60,000 sq ft ‘super depots’ in Cardiff, Dagenham, Exeter and Stoke. DPD’s total hub and depot floor space in the UK has increased 75% from 1.6 million sq ft in 2010 to 2.8 million sq ft in 2015, the carrier says;
  • Its Pickup parcel shop network, which now has over 2,500 participating outlets around the UK including Halfords, the Rowlands and Numark chemist chains, and Doddle.
  • Sunday deliveries – these have long been a major feature of DPD’s offering, and the firm expects to deliver over 250,000 parcels on Sundays during peak.

And, of course, that new sorting hub referred to previously, which is said to be Europe’s largest and most technically advanced. It opened in Hinckley, Leicestershire in September, and increases the company’s overall UK parcel capacity by 65%.

Dwain McDonald, DPD’s CEO, said: “We’ve been talking in detail with our customers, who include many of the biggest retailers in the country, and it is clear that from Black Friday, right through to the January sales, this year is going to break all records for online shopping. For us, that means millions of parcels that have to be delivered, right first time.

“As a result, we’ve invested more than ever this year to provide the best service for our business and retail customers. As much as possible, our approach is about investing in permanent, full-time, trained drivers, using the best technology available to get the job done. Supporting them, I think we’ve got the best network in the industry and more capacity than ever thanks to our brand new £100m hub and much larger regional depots.

“For me the key to handling volume is around being more efficient. The latest fully automated hubs and depots help us manage higher volumes in the network, while being a seven day a week operation means we are constantly moving everything through the system avoiding build-ups over the weekend. Out on the road, we’ll send over 50 million advanced notifications during Peak, and the real time responses our drivers receive from recipients mean that before they attempt a delivery, they already know who’s in or out and what they want us to do with their parcel, which saves a huge amount of time.”

FedEx

With a global workforce of 325,000 people in place to handle peak 2015, FedEx operates on a very different scale to most in the sector. It expects to move more than double its average daily volume during the next few weeks, and predicts that between Black Friday and Christmas Eve it will have shipped 317m items.

For FedEx, limbering up for 2015 peak includes:

  • investing $1.6 billion in FedEx Ground this fiscal year, most of which is for capacity and automation, and more than 160 major expansion projects.
  • running seven-day sort operations across its FedEx Ground division;
  • expanded operations for FedEx Express with additional hub sorts;
  • adding 30 new aircraft to its fleet.

“FedEx expects to see a record number of shipments move through our global network between Black Friday and Christmas Eve,” said Frederick W. Smith, CEO of FedEx Corp. “The shift in consumer shopping patterns, fueled by the rise of e-commerce, continues to drive our volume. Our strategic investments, unmatched flexible global network, and more than 325,000 dedicated team members around the world are ready to help the holidays arrive again this year.”

Yodel

Yodel dominates the UK delivery scene, which guarantees it comes in for a lot of criticism – it’s hard not to, when you are so visible. Having said that, it is also hard to avoid the fact that last year Yodel was one of the more visible casualties of Black Friday, taking the bold step – as we called it at the time – of suspending collections from retailers in order to overcome a backlog caused by an unexpected 600,000 parcels. No wonder this year it said it would restrict the amount of next-day delivery Black Friday business it was prepared to accept from its retail customers.

Planning for this peak started 10 months ago, Yodel says, and it would be hard to imagine there isn’t an all-consuming desire abroad within the business to sail through this year’s peak smoothly, thereby laying the ghosts of Christmas past to rest.

Yodel has hired 7,000 new staff, and spent £20m on bringing in new sorting equipment, and vehicles, as well as a new website that offers improved parcel tracking. It has also:

  • brought in 200 additional HGVs and 500 additional trailers into its transport operation to move parcels from retailers’ warehouses to its central sorts, and then onto its local service centres for onward delivery;
  • acquired seven new permanent ‘super’ service centres, which have boosted its final mile capacity by around 22%;
  • started seven-day delivery schedules;
  • opened two temporary satellite service centres and building temporary extensions to 18 existing sites for peak.

Some of the Black Friday bottlenecks may well be avoided in the wake of Asda’s decision to back away from the event this year.