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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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How retailers and logistics companies are delivering on unprecedented shopper demand amid 'weather bomb' conditions this Christmas

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How retailers and logistics companies are delivering on unprecedented shopper demand amid 'weather
How retailers and logistics companies are delivering on unprecedented shopper demand amid 'weather
Christmas demand is proving challenging for logistics business Yodel as it struggles to catch up with the sheer volume of orders.

Its executive chairman Dick Stead wrote to distribution service centres this week, saying that collections would be halted yesterday and today before restarting on Monday. "This is not a decision that we have taken lightly but one that we have had to take to protect service levels," he said.

In the letter, Stead said: "Black Friday and Cyber Monday exceeded all analysts' expectations and in many cases orders for UK retailers were double the previous record level set last year." He said Manic Monday promotions had also driven parcel volumes.

In order to clear backlogs, the letter said, there would be no service centre collections on Thursday and Friday of this week but that regular collections would restart on Monday.

In a statement, Yodel was keen to reassure customers that deliveries would be continuing.

At the same time, a much reported 'weather bomb' is hitting the UK, with high winds, rain and even potentially snowy weather. All have implications for logistics capabilities in coming day.

In the light of Yodel's experience, we've asked a range of retailers and logistics companies how they're dealing with demand and deliveries this Christmas.

Amazon , which this Christmas is delivering some parcels itself through Amazon Logistics but also uses a range of third-party delivery companies, said in a statement: "Amazon orders continue to be processed and delivered in the normal time frame. For example, Prime customers can order for next-day delivery." The retailer has contingency plans in place that mean if a carrier was unable to deliver at any time, it would route orders through an alternative partner.

Chris Wermann, corporate affairs director at Argos , said the retailer had extended delivery times by up to two days following Black Friday, when it experienced "unprecedented demand". But he said it had now caught up and was back to normal delivery times. "We believe we're in good shape to supply our customers' needs," he said, pointing to Argos' ability to use its stores as distribution centres, supplied by the hub and spoke distribution which is largely managed by its own logistics staff.

He said home delivery accounted for only about 15% of Argos' online orders, with check and reserve generally accounting for a third of orders, but rising to 50 or 60% over Christmas. Of home deliveries, he said, only a small proportion were made by Yodel, meaning that its current delays had a "minor" impact on the business. He said as snowy weather moved further south Argos would get more items to stores, reducing the potential for logistics issues. However, he predicted, there would be bigger peaks in demand to come as shoppers used check and reserve for last-minute orders.

Royal Mail said all was going well, so far, this Christmas. A spokesperson said: “Christmas is the busiest time of the year for Royal Mail and we plan all year round to help ensure we deliver the best possible service to our customers. All our postmen and women continue to work very hard to help deliver Christmas for our customers.

"Royal Mail has opened a dedicated network of ten temporary parcel sort centres for the Christmas period and employed an additional 19,000 temporary staff as part of its festive operation. We have recruited around 1,300 additional agency drivers to support around 2,300 lorry drivers Royal Mail employs all year to transport our mail bag to our centres the length and breadth of the UK.”

A spokesperson for delivery company Hermes said: "We can confirm that we currently have no exceptional operational issues, and all retailer parcel collections are being made. That said our network is extremely busy and has consistently been delivering over 1.1 million parcels a day.

"The ‘weatherbomb’ in the North has caused some challenges particularly in Scotland where there were several accidents caused by high winds on the motorway network. We were also affected by temporary closures on the M6.

"There is no doubt that this is the busiest period we have seen in our history."

CollectPlus' deliveries and collections are handled by Yodel, which co-owns the company together with PayPoint. In a statement CollectPlus said: “Due to increased parcel volumes over the peak trading period and following the huge number of online sales made throughout Black Friday, Cyber Monday and subsequent retail promotions, our customers may be experiencing a delay to our service.

“During this time CollectPlus Send and Return parcels will continue to be collected from our stores, whilst Click & Collect orders from CollectPlus retail partners will continue to be delivered into our stores on a daily basis for customer collection. In some cases, customers may experience a delay with their deliveries.

"Our priority is to our customers and our retail clients and we are working closely with Yodel to ensure all parcels are delivered as soon as possible.”

Roger Sumner-Rivers, managing director of online international couriers ParcelHero said: "Even though the success of Black Friday internet sales was unprecedented, ParcelHero and our quality partners such as DHL and UPS have been closely planning for this season all year, and have factored in a significant rise in online sales traffic. We are not anticipating any significant delays and are picking up as normal."

We'll update this story throughout the day as more retailer and logistics companies tell us how they are handling distribution demand this Christmas. If you have a comment, add it below or email chloe at internetretailing dot net.
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