The parcel industry is changing at lightning speed due to the growth of e-commerce, and the demand placed on parcel shippers – and notably their infrastructure – is increasing dramatically. In 2017, there were 12.7 billion shipments in the US alone, according to the Journal of Commerce. Industry forecasts estimate that, in the next few years, as many as 100 billion parcels may be shipped worldwide. This growth is happening at a time when labor availability is becoming scarce, consumers are demanding more, and the parcel distribution mix is changing. The impact of the growth of e-commerce is well known, and parcel shippers must respond now to meet the challenges of this growth.

Industry Challenges

In addition to record low unemployment figures, there has been an overall shift toward higher paying jobs that are less physically demanding. As a result, companies are increasingly facing the challenge of competing for talent in a shrinking pool of workers — an issue that has particularly impacted the e-commerce industry. Furthermore, as online shopping continues to become the preferred choice for consumers, they are demanding more from their online experience. More product choices, faster deliveries, increased visibility into the order and delivery process, flexibility of delivery, no hassle returns, and bigger and smaller products are all demands that consumers are placing on e-commerce companies. For parcel companies, this is driving growth of the parcel volumes while decreasing the available window of the parcel delivery process.

Remaining Competitive

Given the decline of available labor, rise in consumer demands, and the ever-changing parcel mix, parcel delivery companies must focus on embedding automation into processes. Facilities with automated systems are better equipped to attract skilled workers while simultaneously maintaining low head counts. Automation provides speed, increased accuracy, and real time data monitoring, while maintaining consistent throughput regardless of the season, day of the week, or time of day. Automation can also lead to safer – and more productive – operations. Older automated systems were traditionally hard wired, which caused significant downtime for maintenance and troubleshooting, thereby reducing productivity. Operators often try to bypass safety methods, which has resulted in less safe equipment. Current automated systems involve fewer hardwired components and an increased focus on diagnostic and predictive elements. In addition to allowing customers to predict when equipment needs maintenance, software analytics can also analyze data to suggest operational changes, leading to maximized efficiency.

Parcel delivery companies must also deal with the changing mix of parcels. Larger incompatibles/non-conveyables/irregulars and smaller/lighter parcels are steadily increasing in volume in most parcel centers. Systems that can handle this increase are better suited for parcel operations, and systems that can handle all parcel categories can replace multiple technologies, which reduces the initial investment as well as ongoing operational costs.

To fully benefit from advances in automation technology, however, carriers need to consider their processes as a whole, including areas where they have not utilized automation in the past. For example, automated technology can dramatically improve the efficiency of the unloading process and, in the future, may carry over to the loading process as well. Automated unloading is becoming a focus area for many parcel delivery companies, and new technology in the industry is making headway.

The construction of new warehouses and distribution centers must be accompanied by improvements to enhance the efficiency and longevity of existing facilities. Modular, contactless systems improve capacity, lend themselves to cost-effective installation, and reduce downtime and maintenance costs due to less wear and tear. These systems will become the standard in high-performing sortation and distribution centers.

The Supplier as Consultant

An increasingly important step in making these improvements will be to engage equipment and systems suppliers during the front-end planning process. Technologies are advancing so quickly that the role of the supplier is expanding to include strategic, holistic consultancy in addition to infrastructure and hardware. This “new generation” supplier-consultant will provide a 360-degree perspective and be able to integrate disparate systems into a cohesive, functioning whole. Suppliers also serve as transition consultants, providing support staff and retraining the client’s workforce to seamlessly move into more highly skilled roles. Once a system has been brought online, the supplier-consultant can be embedded within the organization to help ensure that big data is being used to its fullest potential to streamline processes and foster continuous improvement. Leveraging live data from the system to improve the operation is key to maximizing operational efficiency.

As the industry moves forward, we can expect to see “lights out” warehouses/parcel sorting facilities that are able to scale up during peak seasons, omni-channel delivery options, and down-to-the-minute consumer control over delivery. This is what will be needed to keep up with the significant parcel growth projected for the coming years. Consumers will drive the need. Supplier-consultants will drive the solutions.

Chad Thibodeaux is Sales Manager – Sortation & Distribution for BEUMER Corporation, a global leader in sortation technology and the leveraging of live data to improve operations. Thibodeaux’s areas of expertise include BEUMER’s Parcel Picker automated unloading system and BEUMER’s software analytics and contactless systems. A 20-year veteran of the material handling industry, his broad range of experience includes engineering, project management, business development and strategic planning. He holds an undergraduate degree in mechanical engineering and a master’s degree in business administration. Contact him at or visit