Corporate recovery expert sees transport opportunities in online shopping

In a report titled “Home Delivery: Online Revolution”, well-known business turnaround specialist Ferrier Hodgson has highlighted the opportunities, and the risks, presented by the massive increase in online spending by Australians.

The report says that Australians spent $17 billion online in 2010 and quotes a forecast by Forrester Consulting that predicts online sales will reach nearly $22 billion in 2013.

Ferrier Hodgson use the example of a container of running shoes that traditionally would have arrived at an Australian port by ship, been transported to a national distribution centre by truck, unloaded, then are  re-packed into bulk cartons for delivery to retail stores. With consumers increasingly turning to online shopping, the trend is for a single pair to be sent by the overseas manufacturer by air, with final local delivery by a courier operator.

Ferrier Hodgson reports that this change is likely have a negative impact on line haul and third party logistics operations, but offers an incredible opportunity for “final mile” services such as Australia Post, Toll, DHL, FedEx and UPS. The Ferrier Hodgson report comments that Australia Post now claims to be delivering two-thirds of all items purchased online within Australia, whereas that sector of their business was in sharp decline ten years ago. Australia Post expects to deliver around 170 million parcels this year.

The Ferrier Hodgson report concludes that there will be winners and losers in the transport industry and that the winners will be those operators who embrace the change in retail habits and provide large fleets of smaller delivery vehicles and a strong regional distribution infrastructure. The losers will be those who are locked into any element of the business-to-business or wholesale freight sector and are unable to capitalise on the change to increased deliveries to consumers from overseas manufacturers.

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