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Why can the express delivery price increase continuously

by:VIPUTRANS     2020-07-26
In order to cope with the peak season, to cope with the increase in labor costs, to cope with the increase in transportation costs, etc., many reasons have brought great operating pressure on the entire network, and express delivery often continuously increases on the basis of the original price.

The price adjustment of express delivery is not a new thing. Various reasons are also 'full of routines.' However, looking back at the dedicated line, the dedicated line is hard, but the cost of hard work has not increased in ten years. Why?

The status quo of Chinese traditional logistics is 'small but scattered.' In terms of market division, 90% are dedicated lines, and the proportion of whole vehicles and LTL is much smaller than that of dedicated lines. Although the dedicated line ends late, but starts early! Although it makes less money, it has a lot of debts! Although the profit is low, the risk is high! Although the business is thin, the cost is high! Eating 5 yuan noodles, urging one Two million freight.

Logistics is so capricious. If you are looking for an industry, you should look for something like this, playing a million-dollar business and earning a hundred yuan of bills! With the money for selling cabbage, you have to worry about selling sex! The business is high-end, high-end, and low-key luxury. Grounded!

The main reasons why freight rates have not risen for ten years are market competition and price wars. The overall economic situation is not good, consumption cannot keep up, there are not so many goods to pull, but there are still so many logistics personnel and vehicles to feed, so in the case of goods pulling dissatisfaction, logistics companies can only bid with each other: 2 yuan, I want 1 yuan, he pays 0.5 yuan.

Dedicated lines are a perfectly competitive market. This type of market competition is fierce. No matter which dedicated line, after years of market competition, there will be a market price. If you want to force a price increase, the result will be to drive customers to competitors.

To understand the dedicated line freight, you must understand the pricing power of the freight.

Established as king in 60 and 70 years, the logistics market lacks standard capacity, and the pricing power is in the hands of dedicated lines

From the 1950s to the 1970s, the 30 years of manufacturing gold, commodities were basically in short supply. The production process pays little attention to shipping costs. For example, the ** barrels of gold earned by Baosong come from P&G.

Due to the huge profits of the manufacturing industry, the requirements for logistics appear to be in terms of quality and control, that is, in the specified time, the quality of warehousing, and transportation operations, so the price is the most important consideration.

The huge profits made the first-entry companies full, and in the following years, a large number of Jiamusi freight companies with the word '佳' or 'yu' were established. In just seven or eight years, about 6,000 to 7,000 people in Jiamusi went south to work on freight, and Jiamusi Freight began to emerge as a 'business gang'.

In the 1980s, channels were king, a large number of inventories, distributors began to settle accounts, and started to move towards logistics, and pricing power was gradually transferred

But the good times didn't last long. Since the 1980s, there has been a second transfer of pricing power. The right to speak in the market in the sales process has an impact on the freight rate. The counterpart is self-service shopping in hypermarkets. With Wal-Mart as the representative, it gradually moved from the edge of the market to the mainstream, and then enterprise groups such as China Resources Vanguard and Renrenle were born.

Hypermarkets began to pay attention to logistics costs, because most of the cost savings and the field have basically changed the original business efficiency and cost structure, and the manufacturing industry’s right to speak has disappeared, and channel operators have begun to pursue maximum profits. Open to the logistics field.

When freight rates and transportation quality cannot be guaranteed, dealers have a variety of options to build their own logistics system.

For example, Henan No.2 Logistics is established by Vantone Group in the regional LTL that cannot meet its KPI assessment indicators. It is to control channels, plus the regional LTL’s huge profits and massive collection.

The dedicated line of this period is a decentralized and highly decentralized industry, and pricing power appears vague and chaotic: large customers have VIP prices, and retail investors are not sensitive to prices.

The manufacturing industry began bidding and reconsidered transportation suppliers, and additional conditions emerged one after another: deposit, billing period, damage compensation, tracking receipt, and the manufacturing industry began to retrieve the lost logistics voice!

After 2000, the essence of business logic was 'user is king, traffic is king', retailers and terminals began to have an impact on transportation prices

Time has entered the millennium, and the pricing power is transferred to the user, from the seller to the buyer.

The essence of business logic is 'user is king, traffic is king'. The birth of the Internet has broken the original situation of seller and buyer information asymmetry or information gap. With the advent of the Internet, for the first time in history, the information gap between sellers and buyers has been closed to the greatest extent, and the decision-making power of the market has been transferred to retailers whose users are king.

When the dedicated line loses its pricing initiative, it is not surprising that the dedicated line freight rate has not increased for many years.

In the field of road freight, when dedicated line logistics began to become stronger, private logistics companies encountered many problems that could not be solved by their own strength, such as vicious competition, regional monopoly, and bullying and dominance. What's more, some local governments, out of various considerations, tend to give preferential policies to some large foreign companies and state-owned enterprises, so that they can enjoy some 'super national' treatment, but private logistics companies can only Yidi slowly develops entirely on its own.

Land cannot be obtained, and dedicated line logistics has lost an important link for asset appreciation; due to the full competition in the market, regulations and policies have become more and more clear, the advantage of obtaining road freight rates by overloading in the past is not sustainable. On the one hand, dedicated line logistics loses pricing power, on the other hand, the cost of obtaining customers on dedicated lines will become higher and higher in the future.

Today, there have been obvious trends in the development of dedicated lines:

1. Dedicated lines and express transportation will be highly integrated

As express delivery collectively cross-border express delivery industry, the integration and penetration of express delivery and express delivery is the general trend. When the industry develops to a certain extent, express delivery companies need to supplement the capacity of long-distance trunk lines and expand B2B business, thereby diluting the transportation cost of express delivery companies; and express delivery companies Need to enrich the product line, adapt to the needs of the rapid development of e-commerce, and improve profitability.

2. Adapt to the needs of customers with a networked layout

With the fragmentation of the market, opening stores to 'customers' downstairs' is the key to survival of LTL companies. To obtain the cargo flow entrance, you need to be close to the customer, which brings about an increase in cost. When the cost of a single line cannot be covered, full line operation is required, so in the future dedicated lines will become closer to customers.

As the Internet has narrowed the distance and made information transparent, it is easier for cargo owners to select carriers, but the difficulty of the last one kilometer also limits the endless search of cargo owners to a certain extent.

3. Continuously improve customer experience

The requirements of customers at the end are becoming more and more diversified: such as door-to-door delivery, payment collection, receipt settlement. When a customer pays with WeChat, you can’t say no! When the owner’s inquiry happens anytime and anywhere, you should enhance the corresponding ability! So improve your management level, improve the timeliness of delivery and sorting, and strengthen the management of delivery personnel , Management with information technology has become a top priority.

4. Unremittingly dig resources from oneself

When the cost continues to rise, the dedicated line cannot obtain the understanding of external prices, and constantly taps into its own potential, becoming the primary choice at the moment. Sharing the loading and unloading team, using equipment to reduce the intensity of loading and unloading, using drop-and-hook transportation, continuously improving operational efficiency, seeking inward, and becoming the leader of the dedicated line.

In fact, the freight rate has not risen, and competition cannot be the main factor. Also in the express delivery industry, SF Express’s positioning has made freight rates acceptable to customers; in the express delivery sector, Debon also maintains the highest industry prices due to its predictable transportation quality.

Facts have proved: when the quality of service can be measured and the indicators can be expected, freight becomes a secondary factor! Why can't the price of the dedicated line increase? In fact, this is a false proposition!

Why are so many people participating in low-price competition? The general answer is: there is no way to fill the goods with less goods.

'Since 2018, the demand for freight has decreased significantly.' said Xu Mingkang, who has been providing information to freight drivers for many years in Wuxi, Jiangsu.

'Social transportation vehicles have been reduced by one-third.' Lower freight rates have caused drivers to withdraw. As the owner of the cargo, Zhang An, chief of the logistics section of Handan Zhengda Pipe Manufacturing Co., Ltd., has intuitive feelings. This year's freight rate is much lower than the previous two years. Many car owners and drivers in the industry have already sold their cars because of low freight rates.

However, Zhang An did not expect that the transportation cost of the company would increase instead of decreasing the freight rate. Due to load restrictions and many other reasons, the original two trucks are needed to pull the goods, and now three vehicles are needed to pull the goods. As the main cargo to ensure profits, it can only desperately lower the freight rate, forming a vicious circle.

However, blindly relying on low prices will never stand in the private line industry!

Private lines are cheaper than network-based logistics companies, and self-employed are cheaper than private lines, so the same destinations and services will appear, and the charging standards are also very different. However, the three parties and the shipper will not give the goods to the self-employed because the shipper needs location, Predictable, trackable, secure payment, and timely delivery services.

The goods are in the warehouse and haven't been sent out for a week; the cash back of a few hundred yuan, people ran several times, still all kinds of excuses, prevarication! The receipt, more than a month, the customer did not urge, I would not take the initiative to give it, announced customer service The phone will never get through! Then you dislike the low price given by the owner!







From the picture above, we can see that the cargo owner's requirements for dedicated line services are the most obvious, followed by security, innovation capabilities, network coverage, and flexibility.

The industry believes that there are two main reasons for the sharp contrast of 'low freight rates and high logistics costs': First, the traditional problems of the logistics industry are difficult to resolve, the transportation efficiency is not high, and the empty driving rate is high. The delivery time is long; second, the construction of logistics information transaction mode lags behind the market development needs, and the new market and new needs are difficult to meet.

These problems directly lead to the low degree of socialization of the freight industry, the failure of reasonable transportation, and the high vehicle empty load rate; the low level of logistics specialization of the main body of the freight market, most logistics companies can only provide traditional warehousing and transportation services, and lack value-added services Integrated function; the credit system of the freight industry is not sound and the credit cost is high. Overloading, illegal operation, illegal **, and tax evasion using oil cards are still common, resulting in illegal operation of the entire market, low service quality, and high market risks.

Therefore, it is not that the price of the dedicated line cannot be increased, but that there is no reasonable reason for the price increase!

With the loss of pricing power and the industry in the market environment of the Red Sea, it does not focus on the quality of service and customer experience and falls into an infinite loop of vicious competition with peers fighting for low prices. This is the root cause of the stagnation of dedicated lines.
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