Millions more e-commerce parcels to be moved this year- but can it be done?

Growth in the online retail sector is expected to be much larger this year than previous forecasts had suggested, possibly putting more pressure on the parcel delivery firms that have already seen their resources stretched.

Parcel carrier software firm MetaPack and online retail association IMRG now expect that 940 million parcels will be dispatched by retailers this year, up from the 900 million they had previously forecast.

But while most operators would welcome more business, is there enough capacity for them to process the additional 40 million parcels this year?

Carriers including Hermes, DPD and TNT Express have already opened new sites this year to handle rising volumes, with other firms such as Parcelforce and UK Mail to follow suit. But, even with more capacity, it seems that some are still failing to hit their delivery targets.

Metapack and IMRG also reported that the number of deliveries made on time had dropped in April, suggesting that carriers may have struggled with the challenge of squeezing deliveries in around the numerous bank holidays. The number of on-time deliveries in April 2014 (some 92.6% in case you were wondering) fell below that of April 2013, despite heavy investment in improving customer service.

But capacity and time constraints may not be the only issues. Paul Doble, sales and marketing director at the recently-listed DX Group, said transport infrastructure is also making e-commerce deliveries more difficult to manage than in recent years.

“We are witnessing increasing challenges in the marketplace due to obstacles posed by road networks in rural locations and congestion in cities, availability of parking in urban locations and ongoing adverse weather conditions, whilst the industry itself is growing and maturing,” he said.

“The net result of this is that any issues, be they traffic, weather or distribution related, can have a far greater knock-on effect for etail deliveries than they may have done just one or two years ago,” Doble added.

It looks like the next step is for the government to bring some of its promised road investments into fruition to help the sector move more parcels...