News

02.11.2018

No. 432: Letter products used for sending merchandise.

No. 432: Letter products used for sending merchandise.

Autoren:  Petra Junk,  Antonia Niederprüm

(full version only available in German)

Summary

Revenues and volume in e-commerce have significantly grown since years. Various types of goods are sold by online shops and online marketplaces. These range from groceries, drugstore products, books, fashion and electronics to furniture and other big and heavy items. Online sellers have the choice between various delivery solutions to send the ordered goods to their customers. Parcel and express companies play an important role but also increasingly courier services, freight forwarders and, last but not least, the delivery via letter companies.

Surveys among online sellers show that they use letter products for the delivery of goods but to a lesser degree than parcel products and only for specific goods. The online sellers’ and customers’ requirements are various and depend inter alia on size and weight, on urgency, on accessibility of recipients and on the order value. Letter products are accordingly most appropriate for the delivery of small-sized and lightweight goods of low value.

Deutsche Post, regional and local letter companies and parcel operators in Germany offer specific delivery services for this type of goods. These are complemented by emerging solutions from the trade and IT business which promote the interconnection of different logistics providers. This development opens new opportunities for regional and local delivery companies. In contrast to Deutsche Post they are more flexible in process design and therefore better able to meet customers’ individual needs.

The major advantages of letter products in the delivery of goods are low prices in combination with a highly reliable delivery. The most important shortcomings are the missing transparency (tracking as standard service) and insurance, and in case the items do not fit in the letter box, the missing flexibility in delivery. However, as long as the items can smoothly be delivered in the letter box it is the most efficient, competitive and convenient delivery solution for both, the delivery operator and the recipient.

In the future, letter services for delivering goods will remain a reliable low-cost delivery option for online sellers. Introducing a simple form of tracking and some basic insurance could further increase the attractiveness of this delivery service resulting in higher volume and revenues in the letter Business.

Discussion Paper is available for download.

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