Delivery cost increased by about 19 per cent in Asia Pacific: Report

Delivery cost has increased by about 19 per cent in the Asia Pacific, including India, between the March and May period on a year-over-year basis, logistics software-as-a-service firm Fareye said in a report.

The survey was conducted after the West Asia conflict erupted, which put pressure on fuel supplies and cost.

“The research finds that delivery costs across APAC have risen 18.9 per cent year-on-year on average. For India, where fuel prices, driver wages, and urban congestion are structural cost drivers, this number is not a surprise. What is a surprise is the nature of the blind spot: operators can see where cost lands (fuel, labour, vehicles, carrier bills) but not where it is actually created,” the report released recently said.

In India, the first-attempt delivery failure rates in dense urban markets can run as high as 20-30 per cent, which is one of the primary reasons for profit drain.

In the case of India’s quick commerce sector, 10-minute, 20-minute delivery? has attracted billions in investment and dominated logistics headlines for three years.

However, the survey found predictable delivery time is preferred by most customers (41 per cent) over the fastest possible delivery (22 per cent).

“Customers do not primarily want faster. They want to know when their delivery will arrive and trust that it will arrive then. The implication for India is significant: the capital flowing into speed infrastructure may be partially misdirected. Reliability, not velocity, is the premium product,” the survey said.

The majority of operators (delivery service providers) said their customers are willing to pay extra for delivery.

The survey found that more Indian customers are willing to pay extra for the delivery of certain items.

“60 per cent of customers are willing to pay for convenience in specific contexts, like urgent essentials (example Medicine/ grocery), specific time-window delivery, high-value items, heavy or bulky delivery, or business-critical shipments. 70 per cent of businesses in India say customers are willing to pay a premium for certain deliveries,” the report said.

The survey covered over 500 logistics firms, of which 14 per cent were from India, FarEye said.