Rising demand for Ecommerce logistics in Singapore

Ecommerce businesses are sprouting rapidly in Singapore. In the recent years, there are new Ecommerce businesses entering the market each year. Huge interests to join the Ecommerce market are fueled by the strong demand in Ecommerce shopping, or otherwise known as online shopping, by Singaporeans. This strong demand in online shopping is projected to increase at a steady pace in the future as Singaporeans become more comfortable with online shopping. Online shopping have distinct competitive advantages as compared to retail shopping – cost savings and convenience.

As Ecommerce businesses grow, their operations grow as well. One particular operation that will be increasingly tedious and complex for the Ecommerce businesses is the logistics handling and delivery. It is not easy to sort and distribute the items to a large number of residents in Singapore daily. Many Ecommerce business have thus, seeked Ecommerce delivery solutions from logistics providers in Singapore. As Ecommerce businesses grow, the logistics providers benefits and grow as well.

Some people say that these Ecommerce businesses that chose to outsource their operations to logistics providers have chose the easy way out. They even commented further that if the Ecommerce businesses handled the logistics and delivery tasks themselves, they would save money in the long run. I wouldn’t disagree with the first comment – which business do not want to make their operations and processes simpler and straight-forward? It will be a smart move to make things easier. However, I will have to disagree with the second comment that Ecommerce businesses can save money if they handled the deliveries themselves. No matter how big the Ecommerce business’s delivery volume is, they will still pale in comparison with the logistics provider’s delivery volume as the logistics provider consolidates mass delivery volume from various businesses. Hence, the logistics provider will be able to achieve an economy of scale that allows them to sell at a price even lower than the cost of delivery for the businesses that choose to conduct the deliveries themselves. Since it make financial sense to outsource the operations, I do not see why the companies shouldn’t do it. Besides, they will be able to save a lot of effort and time if the delivery operations are outsourced. It is operationally sensible as well.

I guess many Ecommerce businesses understand this. That’s why they chose to outsource the logistics operations to the logistics providers in Singapore. It is definitely a win-win situation for both businesses.

Does it make sense to engage a courier company in Singapore?

Singapore is just a tiny island. The land area of Singapore covers only approximately 720 square kilometers. Does it really make sense to engage a courier company in Singapore? It is understandable that there is a huge demand for courier services overseas as their land area are much larger than Singapore’s. Take the United States of America for instance. If you want to deliver a parcel to your friend living in another State, you will most probably engage a courier company to do the job for you. Otherwise, you will need to spend days to get to your friend’s house to send him the parcel.

In Singapore, you do not need to spend days to get from any one point to another. With just one or two hours, you will be able to travel from one end of Singapore to another via car or public transport. The traveling time and cost is dramatically cut as compared to the overseas’ environment. However, there is still a huge demand for Singapore courier service.

The work environment in Singapore is very fast paced. Singaporeans, especially the working adults do not want to waste time doing unproductive stuffs. It will be smarter to engage a courier company to carry out the deliveries for you while you concentrate on your work in the office. By spending a little to get the delivery done by a professional courier company, Singaporeans get to save precious amount of time. It makes even more sense to engage couriers if the company has regular deliveries to be fulfilled. Saving that one to two hours daily on traveling will accumulate to large amounts over time.

You can only look at it from a benefits versus payoff perspective. If you are a highly paid working professional earning $50 an hour, you will be better off spending $20 to $30 to get your delivery which will take you 1 hour to complete outsourced to a courier company. That way, you saved 1 hour of your time which can make you $50 and you spent only $20 to $30 for the delivery. So the net effect will be a gain of $20 to $30. Things such as saving the efforts and troubles of delivering are not taken into account yet.

So, when people in Singapore ask me whether it make sense for Singaporeans to engage a courier company in Singapore, I will always answer: “It depends on your earning power and whether you are busy at the moment”. Usually, the concluding answer will be “yes”.