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No such thing as 'free delivery' for e-commerce

PRESS RELEASE

April 28, 2015: E-commerce penetration in the UK is the highest in the world at 15%. This figure could soar to 40% by 2024 presenting serious supply chain and environmental challenges.

Steve Agg, CEO of the Chartered Institute of Logistics & Transport, said: "There's a generation growing up who really believe in 'free delivery' but logistics professionals know there is no such thing. There is a commercial, an ethical and an environmental price."

The high rate of returns is a major issue, costing £20 million per year in the UK, according to Vicky Brock, CEO of Clear Returns. E-tailers are wrestling with return rates as high as 60%, where 5 or 6% was the norm in the traditional retail environment.

"The same items come back again and again and after the second return there's no margin left," Brock said. This was not about women ordering clothes in multiple sizes or customers just being "difficult". A garment may not be the colour expected, or an electronic item was often faulty, she said.

Misguided advertising techniques can potentially send returns through the roof. A sofa may "stalk you for three weeks" if you make enquire about one on the internet, Brock said. Customers would eventually "surrender" before returning an item they never really wanted.

Catherine Weetman, vice chairman of the CILT's Environment and Sustainability Forum, said companies must learn to collaborate to make their delivery and collection systems more efficient. She welcomed DHL's announcement earlier this month of a trial with Amazon and Audi which will see deliveries of shopping direct to the customer's car boot.

Also in the last few weeks, the town of Northampton has said it will part-fund a scheme to transfer freight underground in electronic capsules from out of town consolidation points to town centre locations.

Last-mile delivery of consumer goods by aerial drones, while it would tick the box environmentally, is still some years into the future. But Naomi Landman, Amsterdam-based director of commercial development for freight forwarder IJS Global, told the Multimodal seminar that there are immediate opportunities to deliver drugs in developing economies.

Research by IJS revealed that 75% of vaccines are wasted before they reach patients in remote regions of Africa, as temperatures can't be controlled in transit. The company aims to trial drone deliveries direct to clinics under the name Health Express from 2016.

The speakers were attending a seminar at the opening of the 2015 Multimodal exhibition at Birmingham's NEC.

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