DPD, GLS and Hermes today presented their joint ParcelLock-branded ‘neutral parcel boxes’, describing them as “a new industrial standard” for consumer parcel deliveries in Germany and open to all carriers, including rival DHL.
ParcelLock will be Germany’s first “neutral” system for delivering B2C parcels to consumer homes when the recipient is absent, and aims to capture “a large part” of the estimated 3.5 million households who might install such devices, they said at a joint press conference in Düsseldorf. However, this only represented about 10% of the total German market, leaving 90% of households to be served with traditional personal home delivery or via alternative methods such as parcel shops.
The standalone boxes, together with a ‘parcel bag’ model that can be attached to doors, are undergoing initial tests this autumn, will be tested in a pilot phase with several hundred boxes in the Rhine-Main region from next January and then roll out in a full commercial launch across Germany next summer.
But the three parcel carriers, who have set up a joint subsidiary to operate the network, are not planning any further cooperation activities and will continue to compete normally with different products and services, they underlined.
DPD Germany CEO Boris Winkelmann said: “I’m delighted that we can present this solution after 15 months of talks.” The ParcelLock system responded to demographic changes such as more single-person households and mobile consumers with a secure neutral delivery solution, he explained.
“We all have different systems. But we cannot ask consumers to buy different parcel-boxes for each system,” he said. A presentation to large e-retailers last week had generated “a very positive response”, he pointed out.
GLS CEO Rico Back predicted: “In future everyone will have a parcel-box. It must be open for everything that I order.” But he admitted: “This must work first time, we must be sure that it’s secure.”
Hermes Germany managing director Frank Rausch commented: “Consumers are becoming more and more the ‘conductor’ of their delivery. We want to create convenience. With ParcelLock I believe we have the industry standard for the future.” He stressed that the system enabled simple returns while it could “go beyond parcels” and also be used by local or regional delivery companies or other firms, such as chemists for home deliveries of medicines.
The initial letterbox-style metal parcel boxes and hard textile bags, with codepads powered by batteries, are being manufactured by Burg-Wächter, a leading maker of letterboxes and security boxes, but the executives predicted that other models would also be offered in future. ParcelLock is also in talks with large apartment management companies over solutions for blocks of flats.
Back explained that ParcelLock will not market the parcel-boxes and bags itself, which would be the job of manufacturers and retailers. Winkelmann said ParcelLock wanted to offer ‘high-value’ parcel-boxes and bags and expected that the models on offer from manufacturers next year would cost about the same as the current market price of €150.
Under the ParcelLock system, the delivery courier uses a unique code, valid for only one minute, to open the box or bag, inserts the parcel and then locks it again. The recipient uses a personal key to open the box or bag and retrieve the parcels. The same system can be used for returns.
Consumers will be able to register to use the system free of charge and provide their delivery preferences in an online portal and smartphone app. These could include instructions whether delivery persons should ring at their door first or deliver directly into the parcel box or bag, for example.
ParcelLock GmbH managing director Dirk Reiche declared: “There’s potential for 10% of the total market in 5-7 years’ time. Up to 3.5 million households could have parcel-boxes. We want a large part of this market.”
The company is developing a neutral IT system to connect with the in-house systems of the three companies in order to provide information for tracking and tracing purposes, including notification of delivery to the parcel-box instead of a delivery signature.
Reiche said the three ParcelLock shareholders had invested a seven-digit sum – equivalent to a single-digit million euro sum – into the system and said it would be financed via a standard ‘delivery fee’ of “a couple of euros”. Back stressed that all delivery companies “will pay the same fee, whether they are (ParcelLock) owners or not”.
Journalists queried whether DHL and UPS would join the ParcelLock system. DHL launched its exclusive ‘parcel boxes’ last year but has not disclosed how many parcel boxes it has so far sold or what volumes are being delivered through its exclusive network. UPS has embarked on a B2C expansion strategy in Germany, including establishment of ‘Access Point’ parcel shops.
Back commented: “It would be very advisable for DHL to join this neutral system. We’ve offered it to them, and I think they are considering it.” He noted that DHL had signalled it would not turn down deliveries to ParcelLock boxes if this had been requested.
Rausch added: “UPS is closely following our progress and could imagine further talks with us in future.”
In response to CEP-Research questions about whether operating a single delivery network would impact on the three companies’ identity and differentiation for consumers, and whether parcel-boxes would be a lower-cost delivery model than personal delivery or via parcel shops, Winkelmann stressed: “We will remain competitors. Some might change their delivery attempts, some might deliver straight into parcel-boxes.” He stressed that for the 90% of the market not covered by parcel-boxes, “we still need parcel shops which are a good investment”.
Asked whether DPD, GLS and Hermes are planning any other types of cooperation, Hermes chief Rausch emphasised: “This is an alternative delivery method for the future. We all have our branch networks and are developing our own services. So no other cooperations are planned.”
