The irresistible rise of the UK’s ‘lifestyle couriers’
By Harry KretchmerOn the Money, 5 live
- 27 January 2013
- From the sectionBusiness
Non-professional couriers, using their own cars and spare time, are becoming a force to be reckoned with as the internet reshapes the UK’s logistics industry.
Almost a billion parcels are estimated to have been delivered in the UK in 2012 by an expanding logistics workforce of around 1.8 million people, supporting a domestic parcel industry worth around £4.4bn.
Self-employed drivers now make up anything between 5-8% of UK logistics workers, with one of the most rapid expansions in the group known in the industry as ‘lifestyle couriers’.
These are individuals who, out of choice or necessity, spend varying amounts of time each week delivering parcels, usually around their neighbourhoods. It has been happening for decades, but the scale has changed.
Now, if you order home deliveries from a wide range of well-known online, catalogue and high street retailers it is likely some of your goods will have spent some time in the boot of a lifestyle courier’s car.
Coping with growth
Online shopping has led to a boom in so-called “lifestyle” couriers
James Cartledge, editor of industry magazine Post & Parcel, explains why the face of parcel deliveries is changing.
“Business-to-business is still dominant in the market but e-commerce will push the business-to-consumer side to match it in the next few years.
“Now, most of the big parcel industry players also use lifestyle couriers to help them cope.”
The rise of Hermes, the largest player in the UK lifestyle courier market, mirrors the development of the market.
Ten years ago, the Leeds-based subsidiary of the multinational delivery group had 2,500 lifestyle couriers on its books. Today it is 7,500 and expanding fast.
From Greenock to Greenwich, Hermes expects to have delivered a record 160 million parcels in the 12 months to February, boosted by a spike of 18 million during December.
A dozen, randomly-selected online shoppers in Manchester seemed to know little about who was delivering their online and catalogue orders, with some assuming online giants like Amazon had their own drivers.
“I suppose whatever saves them money and gets it here quicker”, was one typical response.
Ged, from Stockport, is one of the new-style couriers. He signed up with Hermes after taking voluntary redundancy following 26 years in local government.
“I wanted a change to become my own boss and that’s how come I’m tippin’ up as a parceller”, he explains.
Now he delivers 60 to 70 parcels every Saturday from the boot of his small saloon car.
A typical load might include a dozen home shopping catalogues, several boxes of shoes and a vacuum cleaner.
Them and us
The rise of lifestyle couriers has not been embraced by some full-time self-employed delivery drivers, who typically charge more to cover higher overheads, including specialist vehicles and insurance.
There are still 20% of people who’ve never purchased anything onlineGary Winter, Hermes
Peter Turner, spokesman for the Self Employed Owner Drivers Association UK, describes lifestyle couriers as “a pain in the neck!”
“If they didn’t exist there would be more work for the self-employed guy – it’s got to have a knock-on effect somewhere along the line.”
The fledgling profession is also criticised by some of those who claim to practise it.
Low wages are a frequent source of complaint on the internet forums that have sprung up dedicated to lifestyle couriers.
However, as a representative of the industry, Hermes argues that remuneration is fair and competitive, with additional payments depending on the job as well as opportunities for drivers to negotiate their pay.
Ged, from Stockport, is phlegmatic: “Every little helps, as they say.”
Level playing field?
As the ‘Designated Universal Service Provider’ (DUSP), the Royal Mail is subject to strict conditions, including the requirement to deliver to every UK address six days week, at affordable and uniform prices.
cost advantages over professionals.
By contrast, postal regulator Ofcom admits lifestyle firms play by different rules.
“Packet and parcel operators are, and always have been, very lightly regulated, although they must have a process in place to handle complaints”, says a spokesman.
Ian Senior, an economist specialising in the postal industry, thinks the relative freedoms of the lifestyle market should be preserved, for now at least.
“Frankly, I think they have quite an uphill battle to prove their credibility but I don’t want to see the big heavy hand of regulation coming in yet again”, Mr Senior says.
With e-commerce projected to grow at 15% per year, James Cartledge thinks lifestyle couriers are here to stay: “You can buy five pairs of trousers, try them on at home and send four of them back. Lifestyle couriers are part of that explosion.”
The director of sales and marketing at Hermes, Gary Winter, is upbeat about future growth. “Whether it’s infinite, I don’t know. But there are still 20% of people who’ve never purchased anything on the internet.”