Couriers and postal services reap benefits of Internet's growth

Shoppers of all kinds are now using the convenience of their desktop computer to purchase everything from computers to sweaters…

Shoppers of all kinds are now using the convenience of their desktop computer to purchase everything from computers to sweaters on the Internet, prompting a boom for couriers and freight transporters worldwide.

With a growing online shopping market needing a quick way to send its products to customers, couriers and postal services companies are beginning to reap the benefits of the phenomenal growth of the Internet.

Sources in the courier industry say they expect the Internet to grow the courier business by between 40 and 70 per cent over the next year, as speed of delivery becomes essential.

E-commerce manager at DHL, Mr Colm Barr said the demand for such services is growing with companies from computer manufacturers such as Dell and Oracle to smoked-salmon producers in remote parts of Ireland taking orders though their websites.

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"It definitely has increased our business and the range of customers using our service. "Between 10 and 20 per cent of our orders are now Internet related and we are working now to develop customer service interfaces on the Net."

Courier and delivery services are developing integrated customer interfaces in conjunction with Internet companies, so that orders are connected directly to the courier and customers can track their order as it travels through the courier system on their computer.

The faster pace of innovation in the technology industry has led to a bigger demand for quick and efficient transportation of goods, with DHL dealing with up to 50,000 shipments a week when new software upgrades come out from a single software manufacturer.

Mr Roger Galligan, chief executive at House of Ireland, said that the store now does around 14 per cent of its business directly online and that 25 to 30 per cent of goods are then transported by courier to the customer. He sees this figure probably growing to about 50 per cent in the coming years.

Where previously people went to their high street store to buy everything from books and clothes to computers, companies such as Amazon.com, are transforming consumer habits.

Despite predictions that the advent of e-mail would make traditional postal services obsolete, a spokeswoman for An Post said that far from killing its business, it had seen a huge increase, "with volumes going through the roof" - up more than 50 per cent over the last few years.

SDS the special delivery arm of An Post, has seen its turnover growing at 11 per cent a year, to £46.9 million (€59.5 million) in 1998. Similar growth is expected for this year as the impact of the Internet continues to kick in.

The one aspect which seems to be holding the market back in Ireland is a fear of a lack of security when companies integrate their logistics through the Internet with companies such as SDS.

However, stores like Fred Hannas bookshop in Dublin take up to 30 per cent of their orders through a website. Its site is popular with tourists in particular, who use the site to order books they may have seen in the shop.

Mr Cormac Harrington, owner of the film products and memorabilia Dublin store, Cinemania, said that prior to setting up a website, the shop only sent around one poster a month by mail order outside Ireland.

"But in the last year we are getting customers from everywhere from Argentina to Australia, and we send 15 to 20 packages a week by An Post."

This may seem modest but at around £12 per package, that amounts to more than £9,000 a year being spent on An Post services by a small business.

Internationally, companies like Federal Express, the international freight and courier company, are spending about $2 billion (€1.9 million) on their computer networks.

This will allow it to handle more than 58 million electronic transactions a day.

Director of e-commerce at UPS, Mr Jos DuJardin, said "couriers and logistics will play a major role in the development of e-commerce, and UPS are devoting a lot of interest and energy into developing support strategies for Internet companies."

Dell has worked with UPS to integrate the logistics side of ordering into its site so that customers can monitor the progress of their order minute by minute through the website.

Competition also seems to be hotting up in the market as the large courier and delivery services increasingly carve up the business between them. Without fast delivery services, many Internet start-ups are condemned to fail.

After all if you order a new CD, piece of software or hamper and it doesn't arrive promptly, you will take your business elsewhere.

Cafe chain Bewleys, which specialises in sending hampers around the world, said it would initially expect to do 30 to 40 per cent of business through its website but that this had the potential to grow to around 80 per cent.

Interlink Express's customers in Ireland include Dell and Bewleys and nearly 20 per cent of its business comes from Internet orders. A spokesman for the company said he expected this to grow by between 5 and 7 per cent per annum.