The extended lockdowns that have shuttered Australia’s two largest cities since June have only worsened delays for Australia’s major delivery networks.
But smaller and niche delivery services say they have seen an avalanche of new business from companies and individuals “looking for alternatives” that sidestep the current logistics mess.
Along with the skyrocketing increase in e-commerce since the start of the pandemic, delivery delays are worsened by the 200 Australia Post workers currently in isolation due to COVID-19 exposure, along with several truck driver strikes in September.
On October 1, the United States Postal Service announced it was suspending most of its deliveries to Australia, along with New Zealand and 22 other countries.
On October 4, a widely-shared photo taken inside an Australia Post distribution warehouse in Victoria revealed mountains of undelivered packages, spotlighting the extent of delivery delays.
Michelle Skehan, general manager of Corporate Affairs for Australia Post told 9 News the current backlog was “not a great situation,” with the national postal service forced to pause e-commerce pick ups in Melbourne for several days earlier this week in an attempt to catch up with deliveries.
Smaller players pick up the slack
As a result, smaller independent delivery services say they’ve seen an uptick in business as consumers and companies seek alternatives to the up to six-week delays reported by Australia Post and other delivery networks.
On the Facebook page of Couriers Please, an independent parcel delivery business, a recent customer posted that they’d chosen the service to deliver a package that had been purchased outside of the five kilometre radius of their local government area (LGA) that they weren’t able to collect and would take weeks to have delivered via a major delivery network.
“Loved supporting a small business during these times,” the customer posted on its wall.
Eva Ross, chief marketing and customer officer at Sendle, an Australian delivery service and logistics platform, told Business Insider Australia it had also observed this shift in behaviour.
“We’ve seen insatiable demand for parcel delivery, particularly during the lockdowns in Sydney and Melbourne in recent months,” Ross said.
She said the company, which was founded in 2014 and has traditionally serviced small businesses, has seen its parcel volumes surge by around 92% in Australia’s two biggest cities.
“We’re doing Christmas volumes every day of the week right now,” Ross said.
Ross said it was among many smaller, independently-owned and digital-first delivery companies that were seeing both individuals and businesses rush to its platform.
They are “looking for alternative parcel delivery networks, because they can’t rely on a sole provider such as Australia Post,” she said.
Along with businesses looking to speed up delivery times, Ross said, individuals were also seeking ways to operate outside the current delivery bottlenecks.
A new raft of consumers have meant the company has become a B2C business as well as B2B.
Ross said that startups and independent delivery companies had the ability to sidestep some of the current issues facing logistics systems and pick up the slack.
A lot of people and businesses “have been switching to us as well because we’re more flexible and agile,” she said.
“For example, if one of our delivery partners is experiencing high demand at any given moment in time, we can quickly redirect our parcel deliveries to another partner or multiple courier partners across the country.”
The explosion of e-commerce opens the sector up to competition
A key story of the pandemic has been the explosion of e-commerce as stay-at-home orders and travel restrictions forced businesses to rapidly scale up their online operations.
The number of companies taking business online each month more than doubled from pre-pandemic levels, peaking in July 2020, according to research conducted by Mastercard around its Australian activity.
Its survey showed that 60% more merchants accepted e-commerce sales in 2020 for the first time, compared to 2019.
In addition, the number of new small and medium businesses in Australia grew 73% in 2020 compared to 2019, as individuals set up businesses out of their homes during lockdowns.
Ross said the rise of e-commerce had opened up the sector to opportunities for innovation — and disruption.
“We’ve also seen a lot of consumers switching to Sendle for parcel delivery including companies,” Ross said.
Like many similar digital delivery platforms, Sendle integrates with e-commerce platforms including eBay and Shopify, along with platforms like Squarespace that have e-commerce capabilities.
It’s enabled it to capture an even greater share of small businesses that have launched in the past 18 months.
She thinks that as the country opens up many of the supply chain problems caused by the pandemic will subside but that growth of e-commerce will not only continue but expand the market to other players.
“It’s a growth industry,” she said.
Ross said that digital platforms like Sendle, which offer services that sidestep the post office — along with other innovations such as tools that eliminate the need for shipping labels, will lead more retailers and other businesses away from the major delivery companies.
“Shipping is now a key differentiator for small businesses in Australia so they need choice.”
“People want that flexibility,” she said.
Ross said she thinks similar companies in the space will follow suit in growing their logistics networks to compete.
“We did these partnerships prior to COVID. But we’ve definitely strengthened them over the last 18 to 20 months.”