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Is Technology Making Companies Lose Their Essence?

By Carlos Pacheco - MerQ


By Carlos Pacheco | CEO - Wed, 02/01/2023 - 12:00

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Today, technology is more than a necessity to grow your business. It has become the core and I think it is making companies lose their  essence.  I know that the biggest cab company doesn't have cars and the biggest hotel company does not own any rooms but, does the same  apply to the  logistics industry? Or to Latin America? I think not.

The market has many options that connect a driver with a delivery but the regulations covering  the couriers, the safety and the security of packages are basic elements for the logistics sector that other companies don’t need consideration.

Nowadays the delivery itself is a commodity. Simply moving a package from point A to point B does not add value. This is where a company has to differentiate itself to win the customer, including the tracking feature, punctuality and the safety of the package.

The difference lies in those  things that technology cannot offer: First, the people, with  certified couriers who have social security and, most importantly, who are loyal to the company. Regarding  cars, they should be recent models with GPS and an engine-stop function. These things create an image of seriousness and above all reliability for the final consumer.

Loyalty is a word that is used to describe the  relationship between supplier and customer but I feel that the same word should be used between leaders and their employees in a logistics company to create a permanence that results in a win-win and not in a relationship of convenience that results in the courier jumping from platform to platform for a few more cents. This is mostly for their own short-term good and does not generate a long-term relationship with benefits over time. 

I know that this depends on the kind of delivery that the client wants and the kind of product the delivery company is providing as a result of the growth of last-mile deliveries during  the pandemic. It is very important that businesses seek to improve the deliveries of their packages but they should do so with solid companies. This ensures that they do not need to worry about their deliveries thanks to the security transmitted by a consolidated courier that is responsible for its couriers, rather than saving a few pesos by choosing an irresponsible delivery service. As we say in Mexico, "cheap is expensive."

With all of the above, I do not think that technology should stay in  the background or that it is not important for a consolidated logistics company, but quite the opposite. Thanks to technology, we can offer services that are much more efficient given the mapping of routes, the traceability of services and communication between customers, consumers and suppliers.

In my first years in the logistics field (at the beginning of this century), it was  important to hire a courier with knowledge of the city, handling of the units, and reliability. Currently, only the last two matter since thanks to all the routing options it is no longer necessary for the courier to zone out its route. It is very important, however, that it be someone reliable. This will always be extremely important.

The large e-commerce companies in Latin America, particularly speaking from my own experience in Mexico, started with large couriers to carry out their logistics. They then migrated to the direct delivery service, adding people with their own vehicles to make their deliveries. Today, they are returning to the couriers for the security of the packages that this entails. Clearly, the priority is no longer the price but the security and guarantee of the couriers that respond when making the delivery.

Undoubtedly, the average delivery ticket is vital to be able to take into account what type of logistics service should be contracted.That is why there are different options in the market and it is the customer's decision to decide which service to use. Food delivery services are so attractive because they  unite people on the platform but, in my opinion, this is difficult  to do with package logistics.

We also cannot ignore that working with  an established logistics company can result in a greater number of  services offered to customers, such as reverse logistics, cash on delivery, return of documents and many other services that can be adapted to the needs of the client.

To conclude, technology is a vital tool for the growth of a company and a facilitator throughout an organization, but from that to being the purpose of the courier business or the essence of it, it seems to me would be somewhat risky. The essence of the courier business must always be people.

Photo by:   Carlos Pacheco

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