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Thailand: Parcel niche faces income hit
The last-mile parcel delivery segment is expected to see slower growth this year due to the damaging effects of the pandemic, according to new research.
The segment is expected to see revenue grow by just 19% to 71.8 billion baht this year, slowing from a gain of 31.3% in 2020, according to Kasikorn Research Center (K-Research).
Last-mile parcel delivery refers to the final step of a shipment process, when a parcel is moved from a transportation hub to its ultimate destination, such as a home or a store.
The delivery of fresh food was likely to see a bigger impact from Covid-19 than non-food items since consumers were concerned about delays during the outbreak, K-Research said.
Some delivery operators are also facing difficulties from their deliverymen becoming infected, the temporary closure of some of their facilities due to infections amongst staff, and the rising costs of Covid-19 prevention measures.
According to K-Research’s report, last-mile delivery service in Thailand saw revenue grow year-on-year by 31.3% to 60.3 billion baht in 2020, while in 2019 it saw revenue grow by 32% to 45.9 billion.
K-Research said the cost of Covid-19 prevention was expected to rise, which would take a toll on delivery service providers which could not afford to increase service charges due to intense market competition.
The sector’s double-digit revenue growth does not guarantee that all operators will see a rise in earnings, because the pandemic is ongoing and cost controls are still problematic, the research unit said.
Some delivery service operators could face losses while others could see lower profits this year, according to K-Research.
It said the Covid-19 outbreaks had also disrupted delivery services in some areas at the same time as consumers had to rely more on e-commerce platforms during the lockdown.
Kerry Express, a major parcel delivery operator, indicated that lockdowns and curfews in certain areas could cause delivery delays, but said that overall traffic was still moving.
“We suggest citizens take into account the situation of your shipment’s destination before sending, and consider shipping via more reliable companies,” said Alex Ng, chief executive of Kerry Express.
He said the firm still saw a strong demand for its service.
“People need to buy, sell and send things around,” he said.
Flash Express has set aside over 200 million baht to compensate users affected by delayed delivery.
Customers who had parcels which were stuck at its distribution hub in Ayutthaya’s Wang Noi district over three days in July would be eligible for the return of their delivery fee.
The Wang Noi distribution hub was hit by infections and temporarily shut last month. Normal services resumed on July 30.
Last week, Thailand Post said some of its post offices closed temporarily after staff became infected, requiring treatment and quarantine.
This may contribute to delayed delivery in some areas, said Dhanant Subhadrabandhu, chief executive of Thailand Post.
The firm, which handles an average of 8 million parcels a day, had to move some delivery staff from other branches to work in the closed offices, he said.
Source: https://www.bangkokpost.com/business/2160747/parcel-niche-faces-income-hit