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Improving online delivery services: Ofcom, Accenture, Royal Mail, Tesco

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In today’s delivery round-up we cover news from Ofcom as it acts to strengthen customer service in parcel delivery, from Accenture, which reports improved delivery service in the run up to Christmas, from Royal Mail on technology-driven post route improvements, and as Tesco settles threatened industrial action on distribution.

Ofcom acts to strengthen customer rights on online delivery 

Ofcom says it will strengthen the delivery rights of customers who order parcels online as it opens its 2022 consultation on postal regulation. In particular, it wants to ensure that disabled people are treated fairly by postal companies. 

Almost two thirds (64%) of customers – questioned in Ofcom research in January and again in post-lockdown summer 2021 – reported problems with deliveries in the previous three months. About a quarter of senders said they found it difficult to make a complaint or contact parcel operators when their delivery goes wrong, while two in five say their complaints were only partially resolved and one in 10 say their complaint was completely unresolved. Service is inconsistent across the industry, according to customer satisfaction scores that range from 29% for one operator to 71% for another. And disabled customers are almost 50% more likely to have significant problems with parcel deliveries. 

Ofcom says that growth in online shopping meant that parcel volumes grew by about 10% a year between 2015 and 2020 – but in 2021 grew by almost 50% on the previous year. 

Ofcom now proposes to put extra guidance in place so that customers are told who to contact, and how, along with details of the complaints process. Staff must be trained to deal with complaints. It also plans to require parcel firms to establish, publish and comply with clear and effective policies for the fair treatment of disabled customers – including making sure this group can communicate their delivery needs to the delivery company, and set out how couriers will meet those needs. It says that if substantial improvements to customer service and complaints handling are not seen, it will consider enforcement action or regulation – and it has today opened a consultation on postal regulation which closes on March 3 2022, with a statement on final decisions expected in summer 2022. 

Lindsey Fussell, Ofcom’s networks and communications group director, says: “Parcel deliveries have become increasingly important to our daily lives and customers rightly expect a positive experience.

“We’re planning to strengthen our rules to make sure people are treated fairly by delivery firms. If we don’t see significant improvements in customer service, we’ll consider enforcement action or tighten regulations further.”

Ofcom says it plans to maintain the way that Royal Mail is regulated for a further five years, and says that giving the company the “commercial flexibility to respond to the changing market would allow it to continue to modernise its network for the digital age, and secure the long-term financial sustainability of the universal service”. However, it also proposes requiring the company to set out its longer-term ambition for efficiency and report on progress publicly. 

How Christmas online delivery services have improved this year, post-lockdown: Accenture

Retailers have emerged from the pandemic with faster and more reliable online delivery services, according to the Accenture 2021 Shipping Study. Researchers placed 62 Christmas orders on November 19 2021 and found that only 5.5% of retailers delivered late this year – down from 20% in 2020 an 17% in 2019. Some 85% delivered within six days, up from 72% in 2020, while next-day delivery was now standard for eight retailers, seven new this year. That said, 13% of deliveries saw some kind of technical issue such as out of stock items, unclear order confirmations and payment not going through. That’s up from 10% last year. Analysis was based on orders received by November 25.

The more reliable service comes, however, at a cost to the consumer. It says that only 13% of retailers now offer free standard delivery as an option, down by 6% on 2020 (19%), although the average delivery charge ws broadly the same at £3.89 (2020: £3.93). 

More retailers offered next-day delivery (77% from 70% last year), and at a lower average cost (£6.14 from £7.10 in 2020). Almost 74% of retailers offered click and collect (62% in 2020), and 24% offered a same-day service, with 93% of same-day offerings free of charge. It’s now possible to choose a delivery date (37% from 39% last year) or a time slot (13% from 19% in 2020). 

Accenture also found that supply shortages are not as yet affecting grocers, but driver shortages and higher levels of customer demand means that many supermarket grocery delivery slots are already fully booked. Two of the major supermarkets, it says, are already booked up for December 22, 23, and 24). Toy retailers have been harder hit: while Amazon had 90% of top-rated toys in stock, the top three specialist stores had an average of 46%, and none stocked all of them. 

Kelly Askew, retail strategy lead for Accenture UK & Ireland, says: “It’s been a uniquely turbulent year for retailers. The pandemic altered consumer behaviour like never before, driving people to use new channels, only for major supply chain disruptions and worker shortages to send businesses scrambling to meet demand in the run up to the festive season.

“These new findings show us that retailers are rising to the challenge, with marked improvements on their performance compared to last year. The businesses in our study have clearly used the last 12 months to strengthen their delivery capabilities as more and more shoppers opt for the convenience of online.”

Royal Mail trials ’city-friendly’ approach to parcel delivery

Royal Mail and Ford have been working together to trial a “city-friendly” approach to parcel delivery in Manchester. Royal Mail aimed to find out if it could use Ford’s Mode:Link multi-modal routing software to boost the number of larger parcel is delivers on foot in urban areas.

Ford’s software helped Royal Mail to use fewer vans in the trial area. The software enabled several people to make deliveries from one vehicle by identifying safe, convenient locations for the handover of parcels to postmen and postwomen who then made deliveries to a mix of high-rise, business, and residential buildings. During the trial, postmen and postwomen used a smartphone app that provided the location of the van and showed the most efficient routes to deliver the parcels. The process resulted in fast and efficient deliveries, whilst maintaining human interaction at the point of delivery, ensuring trust on the doorstep.

The trial took place in the M4 postcode area of Manchester. This is ahead of Manchester launching its Clean Air Zone next year, with daily van charges coming into effect from 2023.

Using Ford’s software – Mode:Link – and specially built parcel trolleys, the trial helped Royal Mail to reduce the number of parcel vans needed in the city centre each day. Ford’s software enabled postmen and postwomen to meet delivery vans at coordinated points and deliver parcels around the M4 postcode area on foot.

During the trial, van usage for the delivery routes involved decreased by 50 per cent, whilst daily vehicle mileage decreased by 33 per cent, resulting in a reduction in CO2e emissions per parcel.

Royal Mail is exploring a range of initiatives, including the use of micro electric vehicles and drones for delivery to remote locations, to use fewer vans in its network. This is alongside maximising the UK’s largest “Feet on the Street” network of over 85,000 postmen and women. Royal Mail already has the lowest reported CO2e emissions per parcel amongst major UK delivery companies. 

Tom Thompson, founder of last mile delivery at Ford Mobility, says: “Our software made it possible for Royal Mail to help reduce carbon emissions and congestion in city centres. As we enter the busiest and most magical time of year for parcels, we are delighted to see the results of this trial prove the value of delivery on foot and the effectiveness of Ford’s software in making city centres cleaner, greener and safer.”

Achim Dunnwald, chief operating officer, at Royal Mail, said: “Ford’s software enabled Royal Mail to reduce van usage and mileage in the trial area, whilst still offering a prompt and reliable parcel delivery service. At Royal Mail, we are continuously looking at opportunities to reduce our emissions, alongside delivering convenience to our customers.”

Unite puts Tesco distribution action on hold as new pay rise offered

Tesco is reported to have partially resolved threatened industrial action. Online delivery disruption and empty shelves at the supermarket had threatened in the run-up to Christmas after workers at more than 13 Tesco distribution depots voted in Unite and Usdaw ballots to take action to reject a 4% pay rise that the unions said not keep pace with the rising cost of living and inflation. Now it is reported that Unite is now recommending that its members accept a 5.5% offer that’s backdated to July plus a further 0.5% in February, and action at four centres has been put on hold. There’s no word as yet on whether Usdaw will do the same at a further nine centres. 

A Tesco spokesperson said: “We’re pleased to have agreed a pay deal with Unite that it recommends to its members. Colleagues at these centres will no longer be taking industrial action. We look forward to delivering a fantastic Christmas for customers.”

The supermarket remains in discussions with Usdaw. 

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