Triangle Publications Present an Interview with CEO of Business Direct, Paul Carvell

In the first of a series of online interviews published on ME-news, Paul Carvell, CEO of UK time critical logistics company, Business Direct gives us an insight into last mile solutions.
Q. Paul, tell us a little about the history of Business Direct?
A. The company began in 1993, as a specialist logistics company delivering time critical parts for field engineers pre 8 am. After recognising a gap in the market in 2001, the concept of an automated exchange was designed, and developed, and commissioned in 2004. As a result, the company listed on the AIM market in August of that year, raising capital to roll out a national network of ParcelXchanges. Two additional acquisitions were subsequently made namely 'Esprit' the in boot delivery operation of ANC, and 'Concord' the specialist logistics company working in the Hi-Tech sector. In 2007, ParcelXchange was launched globally, primarily to Post offices and is now in use in more than 5 European countries and in South East Asia.
Q. So as a result of all this action, how many units do you have in the field?
A. The first PX units were rolled out nationally in 2004; currently there are 310 sites with 4,500 individual lockers in the UK. Additionally, there are drop boxes and PUDO's (manned counters) positioned around the UK taking the total number of delivery points to over 500, all capable of track and trace. Globally, we anticipate that ParcelXchange will be used in circa 12 countries across 3 continents in the next 12 months.
Q. I've read recently of successes both inside and outside of the UK market, tell me more?
A. The business is split into three divisions: In Night, Global Licensing and Specialist;
In Night has been gaining rapid market share from parcel carriers, (depot collect and pre 10 am), competitors and branch collections in the B2B field service market. Major wins include Jungheinrich and Siemens Medical, all wishing to improve productivity, reduce cost and enhance customer service and response to down time (up to 30% reduction in costs). Major strategic partners include DHL, TNT and Parcelforce – where we are seen to be adding value to their services.
ParcelXchange Worldwide – We have had significant wins with DHL Ireland and are undergoing trials in Finland, Estonia, France and S.E. Asia. Our major prospects are OEM's, In Night carriers, but more importantly Post Offices around the world. The major opportunity is for Post Offices to lease the ParcelXchange equipment and operating the software under license for their own use – there is no CapEx and the customer can start small and build up as their requirements grow.
Specialist – This is an area for key growth with companies such as Computacenter, Xerox and other major I.T resellers. Other areas are Two Man, Technical Courier and Sameday. Many of these customers also work with the In Night division – "One Stop" package for IT logistics.
Q. It all sounds very positive, has there been much resistance?
A. The PX system works at Six Sigma levels (99.9% +) everyday and offers a national pre 8am service unavailable from the carrier market at prices below sameday/pre 10-am carrier tariffs. AT Kearney recently reported that all the carriers are in need of this service, particularly for B2C growth. Ironically only DHL, TNT and Parcelforce have so far adopted this bolt-on to their range of supply chain services. Carriers should not be threatened and should adopt this new technology by working with us – we are not mainstream Express competitors and it could dramatically reduce their cost of first time failure, and improve their service to their B2B and growing B2C customer base. UK failed delivery costs to UK Carrier players is thought to be £123m p.a (source: IMRG) – using a PX offers the customer the opportunity to dramatically reduce failed deliveries and consolidate their delivery points. Globally, a large proportion of interest has been in units containing 50-100 lockers which will naturally drive down costs. I don't doubt that before long, consumers and business customers across the globe will see huge reductions.
Q. I presume there would also be Environmental benefits?
A. Yes – the drop box concept has impeccable green credentials – higher productivity during the night, fewer vehicles on the road during the day – less road miles driven – less congestion and carbon emissions. At Business Direct we also use bio – diesel vehicles for major collection and delivery runs.
Q. Where do you see yourselves in the market and where do you see the growth?
A. Along with the other players such as Keba there is now a great deal of choice. We are being inundated by enquiries to examine the PX concept and trial the "virtual, unmanned post office." We are the new kids on the block but I believe we are very advanced in our thinking. We are seeking to lease/license a large number of PX's to a country with the customer providing the logistics and marketing to their customers. The rental agreement includes access to our track and trace software which offers full visibility of deliveries, collections and returns.
We feel that we are very competitive in the industry and have the added advantage of having operated a national PX network ourselves – i.e. we understand the business model and economics.
Looking at growth, B2B still offers tremendous opportunities as users seek to further improve customer service and reduce costs in the vital area of service and parts management, which can average at 25% of revenues or more of a total business. (Deloittes 2007). The UK In Night market is thought to be worth £250m p.a – so we have a long way to go!
B2C undoubtedly is the big growth area and will take on increasing importance over the next two years. Research shows that the UK B2C market is around 600 million parcels per annum to 26 million UK internet shoppers. Worldwide the figures are equally as dramatic, and it is partly due to this, that licensing the ParcelXchange has been so successful.
Post Offices are actively seeking solutions to their B2C challenges and we at Business Direct believe that drop boxes offer significant advantages including 24/7 availability with pin only access, leading to improved customer service and reduced delivery costs.