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Yodel’s peak cap fits as 1% uplift keeps carrier in control


Yodel has exorcised the ghosts of last year’s cyber week peak, the company has said, by delivering a record-breaking number of parcels between 26 November and 2 December, the cyber week period.

The overall volume of parcels into the Yodel network during cyber week 2015 was 5,098,559, an increase of just 1% on the 5,048,305 parcels that went into its network during the comparable period in 2014.

However, there has not been a repeat of last year’s backlog, which saw 600,000 unexpected parcels held up and delivered late. This, Yodel says, is down to the decision it took back in July to cap the volume of next-day Black Friday deliveries it would accept.

Yodel invested around £30m this year making improvements to its infrastructure and hiring new people, to “improve efficiency and capacity” the company said in a statement.

The net effect of the £30m investment and the limits it imposed on its retail customers has meant that Yodel was able to deliver all the cyber week parcels it handled on time, unlike last year.

Yodel also said that service levels throughout the period were “the highest on record for 2015 despite it being the busiest week the company has ever faced. As a result, customer satisfaction has remained high with 86% of online shoppers saying they had a positive delivery experience. During the same week in 2014 this figure dipped as low as 73%.”

Other carriers and alternatives saw significant increases over the cyber week period. Hermes reported a 50% increase in order volumes for its retail and myHermes services over the Black Friday weekend. Doddle saw a 42% increase over cyber week, which itself peaked at a 122% growth on the Saturday following Black Friday.

According to IMRG, overall the market was up around 30% in cyber week, with some carriers clearly outstripping others. Some will have benefitted from the Yodel cap strategy, as online sales boomed around Black Friday – parcel traffic that could not be routed to Yodel was, therefore, routed to other carriers.

eDelivery also understands that Amazon continues to bulk up its logistics capabilities, leading to declining volumes for carriers who have traditionally worked with it. Our sister title Tamebay has broken the news today that Amazon is expected to begin forcing retailers using its platform to route all traffic through Amazon Logistics, which will deal a further blow to those carriers who rely on Amazon for high volumes of business.

Commenting on Yodel’s performance, Dick Stead, the company’s executive chairman, said: “We wanted this year’s festive peak to start smoothly and it undoubtedly has. Everyone’s worked incredibly hard to deliver for our clients and for the consumers who shopped online. Firmly agreeing volumes with retailers in advance of Black Friday and Cyber Monday was the right thing to do. We only accepted what we were equipped to deliver, which means everyone from staff to shoppers are happy.”

The eDelivery view:

It’s hard not to see the 1% growth figure and wonder what went wrong. But perhaps what went wrong actually took place last year, when Yodel was unprepared for the wave of parcels that hit it and, for a while, knocked it over. £30m is a lot of money, whichever way you look at it. But maybe that’s the price of preparedness. And if so, it more than ever highlights the need to shift the emphasis in the delivery sector away from price and onto service, ideally premium-priced service.

Yodel was at pains to point out the improvement in service levels this year compared with last, when approached for comment on this story, saying: “Our parcel volumes have grown year on year and we expect they will continue to do so – that’s why we’ve invested £30m into our network. Last year we took an extraordinary volume of additional, unplanned parcels, far above our actual capacity. This year’s numbers reflect new, permanent capacity and we’re delivering record customer satisfaction results on the significantly higher volumes agreed with retailers. So it’s not right to say that our volumes or capacity haven’t increased substantially – they have.”

A 1% increase in the volume of parcels coming into its network does not lend itself easily to the description “increased substantially” however. Rather, it gives a clear signal that Yodel drew a line in the sand based on last year’s experiences and was not prepared to cross it. Back in July we described the cap strategy as bold and brave. Other voices in the sector have chosen words such as ‘odd’ and being at odds with a spirit of collaboration.

That is, of course, open to debate. Any business servicing clients will know there are times when giving the client what the client is asking for can be bad for business – not just your own, but theirs too. Saving your retail customers from breaking their delivery promises may be like dispensing foul tasting medicine to reluctant patients, but ultimately you’re only doing it out of the best of intentions.

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