Covid 19 has certainly impacted the motor industry as a whole, with some sectors which rely heavily on vehicle use suffering more than others. CAVA Finance has seen first-hand the detrimental impact this has had, in particular on the private hire industry. With coach, minibus and taxi firms seeing disruption to their usual service levels due to lack of holiday travel, events and commuters.
We were intrigued to see if any other areas in which CAVA Finance supports, have had a different experience throughout the last year and so have explored how the pandemic has impacted those using commercial vehicles.
Whilst transport services are of course essential, with schools closed, travel banned and people working from home, there has been an impact on demand and need for these services.
However, we’ve seen a huge increase in digital economy during 2020, in light of the ‘Stay Home’ rule. With the majority of shops closed, consumers have been opting for online shopping and as a result home delivery services have soared.
Restaurants and small businesses have been able to stay afloat by offering an alternative way to provide for their customers, whether that’s via pre-packaged meal kits or takeaway delivery services.
Forbes are predicting that this won’t be a temporary shift in behaviour and that our online buying habits will continue, as will the demand for high quality delivery services.
How did 2020 impact delivery services?
As with many industries facing huge changes, delivery services struggled at the start of lockdown with changes to demand, staff shortages and new restrictions.
2020 saw millions of consumers changing their purchasing habits due to shop closures and as such the demand for home delivery soared. Companies such as Ocado saw a 1000% increase in website traffic and third-party delivery services such as Deliveroo have further capitalised on the market.
But it wasn’t just food that dominated deliveries. Our love of online shopping has been a growing trend for the past few years, with research from Mintel showing a 12% increase in courier and delivery sales from 2018-2019, a 62% increase since 2014 and currently exceeding a worth of £12Bn for the UK economy.
Business to Consumer accounts for around 65% of the delivery market at present and this is predicted to increase to 78% by 2024. It’s an increasingly competitive market, dominated by big name players such as Amazon Logistics, Hermes and DPD but that’s not to say that that smaller logistics companies and couriers haven’t reaped the benefits of increased demand.
Real Life Insights
We reached out to our contacts in the industry to discover more about their experience of 2020 and what challenges and opportunities the impact of Covid 19 had brought on.
Caroline Downing, Director of All 4 Logistics Ltd shared her views with CAVA Finance. The company runs a commercial road transport freight operation, predominantly transporting manufacturing goods for the automotive and aerospace industries.
They have a substantial fleet and have seen new doors open for them during the pandemic. With 2020’s UK car production hitting the lowest level since 1984 and restrictions on travel, All 4 Logistics Ltd turned their attention to assisting clients with moving Covid related products and equipment for the health sector. Caroline shared her perspective on the last year and how this has impacted the Logistics company.
“Changes and unexpected events, problems or challenges can – and do – often occur, regardless of how well-planned or organised you are. The ability to respond effectively to pressure and stress is therefore extremely important in any line of work.
Covid and Brexit presented hurdles within the logistics industry few were prepared for, however as a small business owner it is essential to accept your limitations and focus on your companies attributes that can sustain business during this uncertain economic climate.
We regrouped, refocused and reenergized, staff including myself have taken courses from customs administration to health and safety management. We self audited to insure we were working as efficiently as possible and that our customer service remained paramount.
A company is an organic being and if nurtured will survive, I continue to take resolution in seeing members of the UK&EU business world support each other and I am sure despite everything that has been placed in our way in 2020/2021 hard work will prevail.”
CAVA Finance also spoke with Rob Howell, Owner of ParcelFast which has been providing reliable urgent delivery services since 2013.
For ParcelFast, Covid presented the initial challenges which many businesses faced, concerns over how closures of businesses would impact on suppliers being able to provide usual services.
However, Rob has seen changes in demand in particular to their confidential and documentation delivery services.
“Many companies are requiring documents electronically as people are working at home or doing meetings via video link, so the demand to get bundles of paperwork delivered has stopped.”
The pandemic has given Rob the opportunity to increase his marketing activity and as a result, he found he was able to explore other avenues and help people with moving items.
“I have had more time to look for opportunities posted on social media for people wanting things moving, and getting a lot of these jobs due to my reviews and value for money pricing.
Whilst I have seen an increase in this type of work, along with people needing help to move things from house to house or between families, my normal work (pre-CV19) has dropped off, but this has created a balance that has meant the company has still been able to continue operating.”
ParcelFast drove forward with community spirit and realised the need for more reliable and flexible services for vulnerable people or those without transport.
“I was able to introduce a socially distanced ‘click & collect’ service where you could order your grocery shopping, or any other purchase that you could buy online and I would go to collect and deliver it on your behalf.
This is an essential service for people who are shielding, or have no one they can rely on to get their shopping, or to people who, through choice, don’t want to go out and queue for ages to get into supermarkets etc.
I offered this service at a considerably discounted rate to my normal pricing structure and still 12 months on I am doing some ‘click & collects’ for people. It was a really good idea to introduce and was taken up by a lot of people in the early stages of lockdown.”
What are the biggest challenges to maintain a quality delivery service and what trends can we expect this year?
It’s predicted that the rapid growth we saw during 2020 will continue but at a slower rate. Customer expectations in the B2C market are high and after last year it’s looking like they’re about to set the foundation for the future of the industry.
Parcel shop networks are becoming increasingly popular amongst small businesses to provide a range of delivery options. In addition, there is more focus on greener delivery options such as specially designed collection depots, cargo bikes and lockers.
Couriers and logistics companies will be striving to set themselves apart from the competition in the following areas;
Convenience and choice
Up to date tech / real time updates and GPS tracking
Increased reliable fleets
Could now be the perfect time for you to expand your fleet and position yourself a step ahead of your competition? If you would like to discuss your requirements for a commercial vehicle, you require any impartial, no obligation advice, or if you’re considering your finance options but don’t know where to start, please get in touch.
You can call Mike on 0161 222 9599 or use our contact form and he’ll be happy to discuss your needs.