< Főoldal | Blog | The 3 main reasons to use the expertise of a logistics company

For businesses in the SME sector, a “multinational” can be a customer, a competitor or an example to follow in some areas. The majority of multinational companies have continually integrated a control system into their corporate culture that analyzes costs in a comprehensive and operational way. In the practice of domestic companies, this method is less a part of the activity, mainly in terms of the number of surveyed areas and the depth of the analyzes. A consciously built company, aiming for long-term competitiveness must regularly review changes in market demand on one side, and the effectiveness of corporate performance on the other.

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In this circle, logistics – especially warehouse logistics and inventory management – are often left out of due diligence, for a number of reasons.

For a smaller company, there isn’t always a logistics professional in the team who can perform this task to a high standard. On the other hand, the logistic environment of a business is treated as an indispensable asset and is therefore not examined. Forwarding is probably the only area where costs can be tracked relatively easily, so from time to time you may need to involve a new shipping company or replace an existing one. The extent to which logistics is a “stepchild” in public thinking is well illustrated by a survey showing that 50% of the enterprises in the Hungarian SME sector were not able to report at all on some of the costs incurred in this area. This makes it clear that, under these circumstances, neither area can be accurately planned for nor effectively controlled. And as to what is the “stake” of this? Well, for example, in the case of a company engaged in commerce, the cost of logistics can be up to 20% of the total cost of the business. However, this is already is an order of magnitude that may be worth considering as a strategic issue and subject to regular review.

In the field of logistics consulting, warehousing logistics and it’s costs, evaluating efficiency indicators is a complex task, evaluation is complex: because information from several areas of the company have to be evaluated side by side to get a realistic picture. It is worth having the help of an external logistics consultant for such a task. There are 3 main reasons for this.

  1. The external logistics consultant shall have the appropriate expertise.
  2. As an external observer, your thinking is not bound by the established routines and habits.
  3. Has some experience in successfully solving problems of similar businesses.

When and how should you outsource logistics?

Well, ideally, when you start a business, or even when you make an investment decision, a warehouse logistics and shipping system is “concreted” both figuratively and physically. In this case, we can consider even more alternatives “painlessly” and can develop and execute a strategic plan that is tailored to the business plans and resources.

We can plan to deal with warehouse logistics and freight forwarding with our own infrastructure, or outsource, or implement a mixed (own + outside) routine based on the nature of our business. Another possibility is to set up a monitoring system with the help of an external consultant, which involves the systematic collection and evaluation of certain data. This can be reviewed and improved once a year with the consultant. Alternatively, in case of signaling from the monitoring system, develop immediate measures with the involvement of the consultant.

However, practice shows that logistics consultancy is used by companies that have already identified the problem (beyond the “pain threshold”) and are committed to addressing it. With iLogistic logistics consulting services, we help our business executives identify the strengths and weaknesses of their existing system, understand their partners’ realistic service needs and find the optimal warehouse logistics and shipping solution.

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Our specialists sat down with the firm’s competent staff and jointly assessed what could cause the problem. Two critical points were identified in the process.

Analysis of the data shows that hard-to-order orders and high workloads do not allow our partner to create their own infrastructure and staff for the task, as this cannot be included in the sales price. An average of 6 business days is available to complete 3 monthly deliveries, but the rest of the month, there is no task to be done by the colleague.

Our company was able to bid at a reasonable cost, so cooperation began. Upon our partner’s request, iLogistic will take over the incoming goods. Then, within 24-48 hours, you scan the barcodes by opening and closing the box for each product and making the barcode lists for the delivery notes in accordance with the shipping instructions. Following picking and packaging as instructed by our partner, the products will be handed over to the international carrier provided by the partner.

Our Results

Following the changes, our partner was able to meet the very tight delivery requirements of its foreign partner. In this way, he has managed to retain an important business partner and, of course, the revenue and profit it brings. Even if we do not take into account the necessary investment costs, just the costs that are closely related to the activity, our client still saves 11 million forints a year on leaving iLogistic to solve the problem.

< Főoldal | Blog | Delivery in Hungary: GLS, MPL, DPD, Sprinter, Express One, but which is the best?

Comparison of the 5 largest delivery companies in Hungary

We get a lot of questions from you about which courier service you should choose for a domestic webshop to ship your products. Since there is currently no material on the Internet that objectively compares the most popular courier companies, we are launching a series of articles on this topic that will help you compare shipping companies and select the one that best fits your business profile.

ILogistic provides a full range of logistics services to web store owners, including storage, packaging and shipping of products. For years, our company has been delivering hundreds of parcels daily in cooperation with the largest domestic and foreign courier companies. We’ve already partnered with all of the companies mentioned in this article, and are currently working with more, so we can share a wealth of our experiences with you. Thanks to the ongoing close cooperation dating back several years, we’ve gained insight into their everyday workings and know all their strengths and weaknesses.

This forms the basis by which we’ve assembled the most crucial info about the 5 largest domestic delivery companies: DPD, Sprinter, MPL, Express One and GLS.

Webshop Fulfillment

DPD

DPD is a German-owned multinational company currently operating in 38 countries. The company has 60,000 members and delivers 4 million packages a day. DPD started in Hungary during 2003 as a joint venture of GeoPost and Lagermax Group, but since 2005 it has been owned exclusively by GeoPost.

DPD is one of the largest courier companies in Hungary, with many Hungarian webshops working with them. They offer next day delivery or give you a 60 minute timeframe as to when the package arrives so the buyer can prepare for pickup. While the other courier companies mentioned in this article will give you a timeframe as to when the courier will arrive, this is typically a multi-hour or all-day interval for most companies.

An additional feature is that the customer can change this interval to the time of their choice, and also track online exactly how many stops the courier has until he arrives to you.

In summary, DPD’s extremely user-friendly parcel tracking services provide great convenience to their customers, not to mention the increase in success rate of deliveries.

Further increasement of the number of successful deliveries is due to the fact that even if the parcel fails to be delivered at first, they will give you two more attempts completely free of charge.

Another benefit of DPD is their so-called Express service, where they undertake to ship the very next day until 10 am.

It is true that DPD has been the subject of much criticism from the client side over the last year. In particular, they received negative feedback on the next day delivery of packages, as many of their customers experienced regular delays in delivering their products. In 2018, the number of slippages increased during the Christmas period, with packages arriving at speeds of more than a week instead of next day delivery.

Due to the slippages at the end of 2018, many customers have turned away from DPD. Since then, DPD has responded to most of the negative feedback and has, for example, set up a dedicated department to investigate missing packages. Since then, the number of lost shipments has decreased and they are also striving to provide good quality service.

Who would we recommend it for?

Based on their pricing strategy, we recommend DPD to webshops that send a large number of cash on delivery, as DPD currently offers the most favorable cash handling fees on the market.

Additionally, DPD is ideal for webshops who typically ship heavy packages of around 40kg. DPD currently offers the best prices for large bulk shipments on the market, and they are the only company on the market where packages up to 50kg are treated as standard parcels at no extra charge. With other service providers, this limit is set to a maximum of 40 kg or in some cases, only 31.5 kg.

As such, based on the above-mentioned benefits, DPD is primarily recommended for webshops that typically post a lot of cash on delivery, have heavier packages on a regular basis, and would like to increase their rate of successful delivery.

DPD

Sprinter

Sprinter Courier Service Ltd. is a Hungarian-owned courier service and since 1997 it has been a dominant player in the market amongst small package courier companies. Market leaders and renowned webshops from various industries have also chosen them as strategic partners. The sole owner of Sprinter Courier Service Ltd. is Lapker Zrt. It is interesting to note that Sprinter’s PPP (Pick Pack Point) service was the first transfer point solution on the Hungarian market, and for 10 years it has been one of the most popular parcel delivery service in the circle of webshop owners.

Sprinter might be a good choice if you have a start-up webshop or just sell a small amount daily. Because their pricing strategy is designed to ensure that even minimal-volume webshops are able to obtain favorable shipping and cash-on-delivery charges for both lighter and heavier shipments. Their price structure is simple and transparent.

Who would we recommend it for?

Sprinter may be a good choice for webshop owners who often send multiple packages to the same address, as Sprinter bills the shipping cost of only one shipment. For example, if you send 10 packages of 4 kg to one address, you only have to pay the cost of a single package of 40 kg, therefore saving on shipping.

Another benefit of Sprinter is that, like DPD, they also offer favorable cash handling fees.

Sprinter’s other strength is its excellent quality in the delivery of fragile goods. They do not load fragile parcels on a conveyor belt but manually sort them, taking care of the integrity of the goods. Thus, Sprinter’s service can be particularly beneficial for webshop owners who sell beverages, glass sauces, or other fragile products.

All in all, we recommend Sprinter’s services to webshop owners who ship less than 5 packages on average per day, but at least half of those packages are delivered as cash on delivery.

Sprinter kép

MPL

MPL, a subsidiary of Magyar Posta (Hungarian Post Office), has long been the largest parcel delivery service in Hungary, but in recent years it has been dethroned to second place by another carrier listed in the article. Many state-owned companies are involved in logistics, including the Hungarian Post. As a result, the company has a well-established infrastructure: MPL employs 30,000 people and operates 350 mobile mail lines and a fleet of 3,000 vehicles.

One of the great advantages of MPL is that they have the complete Hungarian postal network at their disposal to deliver parcels. Thus, if the customer does not receive the shipment for the first time, they will be notified by mail that they may pick up their parcel by the specified time or retry at the date specified in the notice. At MPL, the parcel will not be returned to the sender after the second delivery, but will instead be re-mailed and the recipient will be notified again as to how long it will be possible to personally pick the item up.

Other benefits of MPL include the ability to ship packages of many sizes and consistencies: mail, cardboard and even palletized packages.

Many people have had bad experiences with MPL, as the products were shipped with huge delays before 2017’s Christmas. For example, some packages did not arrive until February of 2018. However, MPL has learned from their mistake: they have further developed their warehouse system, are now expecting more work for the Christmas season and, moreover, are asking their clients to forecast their weekly turnover before the season. Since then, they have been serving their customers to the highest of standards and are paying close attention to ensuring that similar inconveniences do not occur again.

Who would we recommend it for?

MPL is a good choice for senders of constantly varying sizes, as MPL is suitable for mail, small, large, and palletized packages. This way, you don’t have to use multiple providers to fulfill all your needs.

Thus, we recommend MPL services primarily to webshop owners who are often faced with the issue of their customers not collecting their packages and the size of their packages is far ranging all the way from envelopes to fridges.

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Express One

In the April of 2018 Trans-o-flex changed their name, now known as Express One, and has been present in the domestic market since 1997. In 2007, the Austrian Post and Merland Express jointly bought the company and now they ship more than 30,000 parcels with 450 operating couriers in Hungary.

It is worth knowing that the company used to work at extremely low prices, so they entered into a strong price competition with other competitors that they could not sustain after a while. As a result, the company changed its pricing strategy in 2018, leading to higher tariffs. However, with this price increase, Express One is still offering competitive prices in some segments.

While they are expensive in the small package market, we personally consider them the best provider for pallet shipping. We often use them for pallet shipping or for sending packages that exceed other providers’ maximum package sizes. They can deliver packages of up to 500kg / pallet.

One of Express One’s areas for improvement is customer service. Express One has recently received a number of negative customer service feedback. Their customers reported that their problems had not been answered after a week, and that some of their lost packages had not been found at all. We have also heard that in the case of a wrongly received package, the person did not receive the refund. Of course, it is up to everyone to decide whether to listen to the experience of others, but it is worth considering the above criticisms.

Who would we recommend it for?

Express One is primarily recommended for web shop owners who ship heavy or fragile products using pallet shipping. We mostly ship TVs, washing machines and refrigerators.

Express One

GLS

And now, we’re introducing a company that has overtaken MPL, the market leader, and its other competitors all while imposing drastic service improvements on the market: GLS.

Currently, GLS is the largest courier company on the Hungarian market, and they are also the fastest developing one too. GLS is a Dutch based company that ships packages in 41 European and 8 American states. Their success is largely due to the fact that they were the first to place great emphasis on the quality of their service and deliver packages with almost no errors.

The strength of GLS is in its small package delivery. They provide a very transparent, fast and high-quality service in this area. This is primarily since GLS is currently the most popular service provider for online stores and ecommerce. Based on the experience of the last 4 years, the number of incorrectly invoiced or lost packages at GLS is zero. They have never made a mistake since our cooperation. Our experience is that they are performing well this season, thanks to their billions of dollars invested each year to improve their service.

In addition to quality shipping, one of the major benefits of GLS is that it offers a significant volume discount to customers who send bulk shipments with them. These discounts are primarily available to webshop owners who ship more than 5 packages per day on average. GLS also handle cash on delivery orders professionally, sending accurate and clear reports on all deliveries so you can always count on total transparency.

The only downside to GLS is that it often offers start-up or lower-end webshops a much higher price than its competitors. However, there is a solution to this, which we will discuss shortly.

Who would we recommend it for?

We recommend the services of GLS specifically to webshop owners who need quality service, an appropriate courier, and clear, accurate billing, and whose shipments mostly weigh less than 5kg.

According to its pricing, the service provided by GLS can be especially beneficial for those who work with more than 5 packages per day during the off-season, i.e. they operate a higher-traffic webshop. As mentioned earlier, it is possible for lower-end webshop operators to benefit from GLS quality services at market-leading prices. How you may ask?

Well, mostly by using GLS services through a company that receives volume discounts and passes them on to their customers with minimal traffic. Such a company can be a groupage transport company, or a fulfillment company that takes over full logistics. Our customers often choose GLS through us.

GLS kép

Summary Table

DPD Sprinter MPL Express One GLS
  DPD  Sprinter  MPL  Express One  GLS 
Discounted Third Day Delivery No X X No No
Discounted pricing in case of multiple packages sent to same address X X X X No
Pack-Point Solution X X X X X
Pallet Shipping No X X X No
Bank Card Cash on Delivery X X X X X
Free return shipping of unclaimed parcels to sender X Not Free Not Free X X
Pick up and return to sender X X X X X
Package Exchange Service X X X X X
Specified Timeframe Delivery 1-2 hour timeframe 3 hour timeframe Min. 2 hours Min. 2 hours 2 hour timeframe
Upper weight limit of packages without surcharge 50 kg 40 kg 40 kg 31,5 kg 40 kg
Number of delivery attempts included in base pricing 3 2 2 2 2
Number of requestable delivery attempts as an additional service No No +1 No +1
Method of advanced notice Email Email SMS

Email

Email No
Notifications available as an additional service SMS SMS No SMS Email

SMS

Telephone

Expected delivery timeframe as specified in the advanced notice 1 hour Whole Day Whole Day 2 hours 3 hours
Internet Tracking X X X X X
Evaluation: Value of package insurance. 520 Euros 50.000 Ft 50.000 Ft 100.000 Ft 50.000 Ft

In the past, we have worked with all of the courier services mentioned in this article, and are still currently working together with certain services to capitalize on the aforementioned specific benefits of some. However, fast and reliable service is very important to us, and 90% of our small shipments below 5 kg are prepared and shipped with GLS. They’ve constantly provided us with the highest quality service, with fast deliveries, good prices, and little to no mistakes.

This quality service can be accessed by YOU, regardless of the size of your webshop and your package amount, as you will receive 30-40% volume discounts compared to regular market prices.

If you are interested in the offer and would like to finance your other logistics processes from the cost of your shipping costs, please contact us here.

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< Főoldal | Blog | The Effects of Coronavirus on E-Commerce

In recent days, it had been unavoidable to read about the coronavirus, the government’s preventive measures, and the economic implications that this entails. Naturally, COVID 19 also has a strong impact and implications on online commerce. Let’s see what we’ve experienced as a fulfillment and logistics company and what web store owners can expect in the coming weeks.

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What have we experienced in recent weeks?

1. Inventory shortage at webshops ordering from China

China was the first country where the novel coronavirus appeared and to date has infected more than 80 thousand people. At the end of January, China reacted with the introduction of harsh rules, closures of cities and the shutdown of everyday life. Wuhan, the epicentre of the outbreak was quarantined, schools, restaurants, nightclubs and factories shut. The situation has improved considerably due to the month and a half quarantine. Some companies may resume production, the first being agricultural and health care companies.

However, the quarantine period had a significant impact on webshops relying on stock from China. Through the course of our fulfilment duties, we have noticed that many webshops have run out of stock and wholesalers are not far behind. The good news, though, is that the situation in China is normalising, so hopefully, soon enough, orders can be placed to suppliers with the usual delivery times.

2. Webshops offering groceries have seen a constant increase in orders

Since the 16th of March, schools have been temporarily closed in Hungary, and more people are working from home, the number of people self-isolating will increase. Everyone is encouraged to stay at home, and as such more and more are ordering food online. Many large supermarkets offer online delivery, such as Tesco, Auchan, Spar and Príma. These stores are under great pressure, the number of people ordering is increasing day by day, this huge influx of orders poses a challenge in terms of staffing and stock.

In the Czech Republic, the course of the virus is further ahead. The sudden huge traffic for food webshops started when schools shut. More stringent measures have been introduced following repeated orders of food in excess of 600kg. Food orders have been limited to 50kg, and delivery times have been prolonged. The Czechs also introduced couriers ringing and leaving the order in front of the door to avoid physical contact.

Stringent measures and restrictions have started in Hungary too, Tesco, for example, has been forced to impose restrictions on certain products: only 12 items can be ordered from certain products to avoid shortages. Even so, there still may be a shortage of supplies – as Tesco informs their customers on their website. In addition, it has also been introduced that you can only prepay for orders online.

Another change may be that restaurants who would otherwise be unable to stay open due to quarantine measures will switch to delivery. For example, Wolt – a popular food delivery company – has been contacted by five times as many restaurants than usual.

3. E-commerce has livened up, more and more orders are to be expected

As more and more restrictions are imposed in relation to the movement of people, traffic of physical stores is taken over by webshops temporarily. People will avoid visiting physical stores in hopes of preventing infection. This leads to increased traffic for webshops and webshops specifically dedicated to FMCG products. People’s behavior and attitudes towards online shopping will change, they will buy more online and will be more willing to wait for delivery due to the situation. These behavioral changes may persist after the virus has died down.

The price of some products has increased significantly due to increased demand. Disinfectants and masks have become scarce and are hard to find in stores. In Italy, these items began to sell online at increased prices, a bottle of disinfectant gel was often sold for more than €22 instead of the original €3. The cost of face masks went up from 10 cents to 1.8 euros.

Other products that have seen an increase in demand are cleaning products, cleaning supplies, medical supplies, medicines (especially vitamins), toilet paper, soap, paper towels, handkerchiefs and gloves.

Let’s look at other sectors not related to health or food. In China, the shops of cosmetics companies have also closed. One of the largest cosmetics companies employed their beauty consultants online as influencers during the quarantine, increasing their revenue by 200% compared to last year. Fashion companies switched to online sales, and their salesmen continued selling clothes through WeChat.

In the case of webshops, the effects of the virus has produced particularly favourable traffic  for those primarily involved with FMCG products. It is hard to deliver a prognosis or to predict the turnover of other webshops involved in technical products and parts, as while the decline in offline sales can have a positive impact on these industries, an economic crisis, or even the growing fear of a looming economic crisis, can rather quickly decimate the number of online orders.

4. Courier services are introducing special measures in light of the situation.

E-commerce is highly dependent on the extent to which courier services are affected by the measures introduced by the virus. Let’s see what happens in Italy, which has the highest number of people infected in Europe. In Italy, schools, gyms, museums and all shops except pharmacies and grocery stores have been closed. Work assignments have not been suspended and the delivery of goods is considered as work assignment under new regulations. Thus, home delivery continues to operate in Italy. In Hungary, more and more stringent measures are introduced constantly, schools and kindergartens are being closed and all events held in more closed areas with more than a 100 people are to be banned. However, the courier services continue to operate smoothly.

The courier companies have reinforced their hygiene protocols and issued notices about the virus. Magyar Posta disinfects common areas every day, delivers hand disinfectants to their couriers, their staff does not travel, and also highlights on their site that packages from China are completely safe, according to the National Chief Medical Officer. Similarly, GLS and Sprinter placed hand sanitizers and paper towels at several locations in their plants, postponed their trips abroad, and required sick staff members to stay at home.

What can YOU do?

It is important to always keep your customers informed of any stock shortages or important events. You can do this through social media interfaces or via email. Your customers will always appreciate being transparent about everything. Several webshops have placed banners on the home page where they inform their customers about stock shortages and provide information about the virus situation.

Try to do your best to maintain good hygiene. For example, some courier services have introduced that couriers do not have to come in contact with the customer. The customer can indicate where he wants the courier to place the product in front of the location, thus avoiding contact with the other person.

Things are changing day by day, and it is impossible to predict how long the epidemic will last. However, in these times, it is important that we use our resources, be creative and find new ways to attract new customers and also reach our current customers.

Our article is being updated constantly.

 

Sources:

marketingland.com, Tesco.hu, g7.hu, posta.hu, gls-group.eu, sprinter.hu, divante.com, nepszava.hu