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SPECIAL FEATURE                                                      September 2000 Issue


the bulletin

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The courier 'e'-volution

The Internet is expanding courier companies' market and helping them better serve customers

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A little bit of time can make a big difference." "As sure as taking it there yourself." "We will be there." "You can count on us ... ."

Colossal marketing and corporate identity budgets have made the slogans of courier companies household phrases. It also means it is not uncommon to have several courier personal bumping into each other when delivering or picking up packages at offices. As such, competition is fever-pitch.

The Internet has expanded the market of the big three companies, and it has also given them a new tool to better serve and woo customers. Even Speedpost is trying to cash in on the action by getting a trendy corporate identity and spending a small fortune on slick ads. As a result, some couriers are offering faster deliveries, later cut off times, real-time tracking services, and electronic delivery signatures. And all of them are moving into the "e" world of electronically delivering documents and related services.

damianbond.jpg (10405 bytes)According to Damian Bond, managing director for UPS Hong Kong, electronically delivering documents has not cut the number of physical documents changing hands.

"Cannibalisation of the letter and document market has not actually come into effect -- our business has grown year on year by 30 per cent, especially in this market."

Mr Bond said he thinks that growth in global commerce has added to the overall increase in documents being shipped, which has lessened the impact of sending documents electronically.

To handle the documents sent through cyberspace, UPS has 14 mainframe computers with 66 terabyte capability, which allows the company to do about 12 million electronic transactions a day.

Part of the electronic services that UPS is offering stem from alliances with companies such as Lotus, IBM and Microsoft, which bring in third-party vendors to help build solutions for companies.

In July 1999, UPS launched its package shipping and tracking system service to customers over the Internet, and in the same month its Delivery Information Acquisition Device (DIAD) which is essentially a hand-held computer which replaces traditional paper delivery records. According to the company, the system was developed at a cost of US$100 million and US$1.2 million was spent rolling out the new technology in Hong Kong.

Such systems are also lending a hand in retaining customer loyalty. Courier companies provide customers with software which they load into their computer to help them prepare documentation, track documents and check the inventory of what is going out. This data can be uploaded to the company's depots to speed up customs clearance. For big customers, hardware can be provided to totally track documents. So of course once you have the software loaded and staff develop a liking for it, coupled with the fact that there seems to be little in pricing and performance difference, you are likely to stick with that service.

While primarily a business-to-business market, couriers are also going after incidental customers and increasing their market share-of-mind as well. In April 1999, UPS announced an alliance with 7-Eleven which provides 24-hour operation, and expands its service to more than 350 locations across Hong Kong.

FedEx has drop-off boxes and service centres around Hong Kong and recently announced that customers can drop off packages at Mobil service stations.

DHL officially opened its HK$20 million Kowloon West Service Centre in Tsuen Wan at the end of June this year, which features advanced technology to automate and streamline shipment processing, resulting in more flexible pick-up and delivery times, more accessible shipment information as well as higher efficiency.

W.T. Lee, general manager of DHL International (Hong Kong) Limited, said, "These technologies and facilities are powerful tools that allow our staff to easily and quickly manage shipments. We understand how valuable every second is in the daily business to our customers."

The setup also includes the Clear in the Air (CIA) System which stores digital images of airway bills, invoices and other shipping documents needed for customs clearance. As DHL offices at destinations can retrieve the necessary documents from CIA System before physical arrival of shipments, time for customs clearance is reduced, and the entire process becomes more hassle-free. B

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