Asia-Pacific delivery costs up 19% in 2-months: What's the reason?

Asia-Pacific delivery costs up 19% in 2-months: What's the reason?

The Asia Pacific region, including India, has witnessed a significant rise in delivery costs, by nearly 19%, between March and May this year.

The spike is attributed to the ongoing Middle East conflict, which has affected fuel supplies and costs.

The findings were detailed in a report by FarEye, a logistics software-as-a-service company.

India faces unique structural cost drivers

The report highlights that India faces unique structural cost drivers such as fuel prices, driver wages, and urban congestion.

These factors have contributed to the overall increase in delivery costs.

However, it also notes a gap where operators can see where costs are incurred (fuel, labor, vehicles) but not where they are actually created.

First-attempt delivery failure rates can go as high as 30%

The report highlights that first-attempt delivery failure rates in dense urban markets of India can go as high as 20-30%. This is one of the major reasons for profit drain.

Despite billions being invested into quick commerce and fast deliveries, most customers (41%) prefer predictable delivery times over speed (22%).

Customers willing to pay more for certain deliveries

The survey further reveals that a majority of delivery service providers believe their customers are willing to pay extra for certain deliveries.

Specifically, 60% of customers are ready to shell out more for urgent essentials like medicine or grocery, specific time-window delivery, high-value items, bulky deliveries, or business-critical shipments.

The report surveyed over 500 logistics firms with 14% from India.