Want to buy a courier franchise? Best bring your tech smarts
Technology has had a significant impact on the courier business. We take a look at how some New Zealand and Australian franchised brands have responded.
First up was Fastway Couriers which spotted the potential of online retail and acted accordingly. The business launched Parcel Connect, a system of delivering parcels to third party locations for collection by the recipient at times convenient to them. Franchisees now turn their relationship-building skills honed with their regular business customers to working with local firms.
Just this year the Fastway Australia and New Zealand business was acquired by global giant Aramex, and this Middle East based company has brought new capabilities to the logistics process.
In Australia, CouriersPlease, now owned by Singapore Post, has also turned its attention to delivering maximum convenience to the customer, and has updated systems and brought in initiatives designed to optimise business opportunities for franchisees.
As CouriersPlease CEO Mark McGinley explains, “We are continuing to develop our ecommerce ecosystem of alternative pickup and delivery locations. With our partner HUBBED, which has a built a sophisticated network of newsagents, we have rolled out over 400 alternative delivery locations nationwide wide.”
The POPStation locker network is another initiative, points out McGinley.
Convenience is king
“We have recently signed agreements with a range of partners including Westfield, Stockland and Lendlease that will provide more choice and convenience for retailers and consumers alike.
“E-retailers will be able to fully integrate these options at checkout on their shopping carts. In turn, this will allow our franchisees to deliver multiple parcels to a convenient location rather than perform many futile deliveries to residential addresses,” he says.
While the rise of e-commerce has led to an increase in parcel traffic, it has also caused a dramatic increase in residential deliveries, says McGinley.
“Surveys show that up to 30 percent of first time deliveries are unable to be effected because the receiver isn’t at the address provided. This is why CouriersPlease is investing so much in providing consumers with multiple delivery options.
“Consumers want to receive their parcel at a time and location of their choice, it is incumbent on the carrier to provide that choice. Increased traffic congestion and the reduction in loading zones are also challenging for the modern courier franchise.
He believes the POPStation smart lockers and the network of newsagents is a solution to these challenges.
“Our core customer base is made up of thousands of small and medium sized entities mixed with an increasingly growing number of large e-commerce customers.”
Digital shopping is important
Both CouriersPlease and Fastway have historically been business-to-business carriers, but the shift to an e-retail focus recognises that the consumer is now the most important component in the logistics chain.
That view is echoed by Othman Aljeda, CEO of Aramex.
“New Zealand and Australia are two of the most rapidly growing e-commerce markets in the region and by acquiring Fastway we can serve more businesses and consumers online and through our strengthened distribution network.”
Aljeda said the acquisition would deliver significant competitive advantages for Aramex, for customers and for Fastway’s franchisees.
“We’re excited to add Fastway to Aramex’s global network. The company has a strongly performing business, a well-recognised brand, a leadership position in Asia-Pacific, an excellent management team and a large global customer base.
“Our customers and franchisees will benefit from increased efficiencies, productivity and reach and the acquisition will provide Fastway’s Australian operations instant access to a global network that will foster greater innovation and collaboration.”
Fastway Courier’s structure embraces both local couriers and regional couriers who work to a hub and spoke model. Both sets of franchisees are “tremendously positive” about the new ownership and all that follows from acquisition by a global business, says Richard Thame, CEO of Fastway Australia.
Here the further expansion of the Fastway brand into regional areas is underway.
“One of the reasons we can do this is there is so much inbound online business,” says Thame.
Couriers Please has expanded its regional footprint and pushed the fleet size to more than 700, an increase of 10 percent on last year.
“Our franchisees operate within a defined geographical territory. These territories are exclusive to that franchisee who derives their income from every parcel picked up or delivered. The more parcels they pick up or deliver, the more money they earn. Franchisees can sell and market our services themselves or, if they are too busy, they can rely on the support of our telesales and field sales teams to help develop their territory,” explains McGinley.
At Couriers Please contracts are open ended and automatically renewed each year.
“Our franchises sell for between AUS$5000 and AUS$200,000 depending on the territory. Of course each franchisee will also need to lease or buy a van. Each CP franchisee should have, as a minimum standard, a late model 2 tonne van.”
While the average tenure of a Fastway Couriers franchisee is five years, the franchise agreement is perpetual – which has its own advantages.
“Once you’ve invested, it’s yours, so you ultimately benefit from the sale,” says Thame.
The changing nature of the business means franchisee recruitment is not targeting existing couriers. What is important to the business is a franchisee with communication skills and an aptitude for technology. There is diversity across age, gender and cultural background, he says.
McGinley believes trust is the greatest strength of Couriers Please.
“Having been owned previously by NZ Post and, since December 2014, by Singapore Post, CouriersPlease has always combined industry best practice with leading technology and innovation. Our customers trust us with their business and we take great pride in that.”
What does the future look like for a courier business?
Thame looks ahead five years: “We will have adopted crowdsourcing, giving people the ability to grow their small mobile business into a huge business.
“Of course traffic will have a big influence on how we structure the business and place the depots.
“We’ve seen some pretty rapid changes,” he says. And the changes are not over. “You’ll see private companies putting up a viable challenge to traditional postal operators,” he predicts.
McGinley is also upbeat about the future. “It is a very exciting time to be a courier. It is an extremely dynamic and innovative industry. In the last few years we have seen the rise and proliferation of online courier aggregators, the emergence of crowd sourcing parcel delivery companies, the growth of global eCommerce giants like Alibaba and the ongoing development of drone technology and driverless vehicles.
“With the support of our parent company, Singapore Post, we believe that CouriersPlease and our franchisees are well positioned to take advantage of this new landscape.”
- This article first appeared on www.franchisebusiness.com.au