Is the courier market growing?
The UK’s courier sector is currently experiencing significant growth and transformation, driven by a booming e-commerce market and the need for efficient and reliable delivery services. Market trends are also seeing courier fleets on the rise, as businesses expand to accommodate increased demand. Both UK and international deliveries are set to grow significantly by 2030.1 In 2023, the UK courier market was worth around £16.55 billion. Expert Market Research predicts the UK market will rise to £25.25 billion by 2030.2
But with a growing courier market, what state is the insurance market in? Insurers and insurance brokers that prioritise customer experience, operational efficiency, and sustainability are set to thrive in a competitive market. At BCD, we do exactly that; putting the needs of our customers first and accessing a wide range of policies that are both competitively priced and tailored to our customers’ unique requirements.
Why are insurance premiums higher?
As a courier, you might have seen your premiums rise in recent times. This is because increased claims costs are pushing the price of premiums higher. The prices of vehicle repairs have risen, car and van parts are harder to source, and labour rates are increasing. The knock-on effect means that the cost of a claim for the insurer increases, which can often be passed on to the customer through an increased premium price.
Another contributing factor is that there are less insurance products directly available to brokers and customers. A reduction in the number of products can contribute to higher demand and higher prices. At BCD, we’re aware of your concerns around the cost of your premiums. With access to exclusive products and a large range of insurers, we can provide you with a range of options when you’re finding courier cover.
Have You Considered Fleet Insurance?
If you own a growing courier business, you could benefit from a Fleet policy. Fleet Insurance through BCD is more flexible and accommodating than having to have an individual policy for each vehicle. For example, ‘any driver’ insurance means you won’t need to call us each time you want to add a new driver to your policy. With a Fleet policy you can move from named driver, to any driver over 19 years of age. If you’re running a busy courier business, you won’t need to constantly update your policy, which can save you time and hassle. You will be provided with a dedicated account manager to help you with your policy. You will also have just one renewal date and one payment plan to manage.
How Can You Reduce Your Fleet Insurance Claims?
The more efficiently you manage your fleet, the less claims you will have, giving you more savings on your policy over an extended time.
If you own a courier fleet and are concerned about the impact a claim might have on your business, there are steps you can take:
- Check and Manage Your Drivers: Enable them to take driving tests. Check their licences regularly to ensure they have no additional points. Provide regular training. Vet your drivers thoroughly. Conduct background checks on drivers you’re considering hiring, including their driving history and any criminal records. This can potentially lower the chances of hiring a driver with a history of dangerous driving, reduce the chance of claims, and save you considerable money in the future.
- Report Your Claims Promptly: The faster you report your claims, the faster your insurer can react and control the ultimate cost. Unreported claims are a common problem, sometimes because the driver thinks they may get into trouble. However, mistakes do happen and if you don’t report claims, third-party costs can start to skyrocket, which will have a serious impact on your renewal.
- Manage Your Vehicles: Check your vehicles at least once a week for dents and scratches, as this may be an indication that a claim is due and may have gone unreported. This is a fantastic and free way to help keep your claims costs down.
- Don’t claim for everything: Avoid making smaller claims. Every claim counts towards your premium, so if you have an excess of £1,000, consider paying for a small dent in the bodywork yourself. Insurers will take frequency as well as severity into account, often looking more favourably on a one-off mistake instead of regular smaller claims.
- Telematics and Camera Systems: Install telematics systems to monitor vehicle health, driver behaviour, and maintenance needs in real-time. Telematics and GPS tracking systems can also track drivers’ speed, acceleration, braking patterns, and adherence to routes. Provide constructive feedback based on telematics data to help drivers improve their vehicle handling and driving habits.
How Can You Position Yourself in a Competitive Market?
Price Volatility
High inflation has seen correctly positioned pricing remain a vital part of staying afloat and successful in an increasingly competitive market. High fuel costs, labour shortages in the motor servicing and repair market, and higher overheads mean that courier businesses could be inclined to increase their prices. But the market is highly competitive, so leveraging higher costs with seamless and reliable service will put you in a better position to raise rates. Organisations such as Courier Exchange provide market data programmes which can inform pricing and help you price jobs accurately. Put simply, remaining agile and accurate in all your business processes can help you retain customers and maintain business success and growth.
Nurture Existing Relationships; Attract New Customers
Develop good relationships with your merchants, as this will stand you in good stead now and in the future. Increase your client base as this can futureproof your business. Courier Exchange (CX), the UK’s busiest courier platform, is a great way to connect your courier services with businesses that need help with shipping and delivery. Whether you’re a courier fleet owner or a self-employed courier driver, you can bid for loads and locate them in your specific area via the CX online platform https://courierexchange.co.uk/
Once you’ve secured new customers, retain their loyalty by being reliable (aim to consistently deliver on time and quickly) and providing great customer service by training your people, staying responsive, remaining solutions-orientated, and listening to customers.
How Can You Become a Preferred Choice for Larger Shippers?
Improving a courier business involves optimising various aspects of operations, customer service, technology, and marketing. These practical steps can help you streamline your business processes and give great service to your customers:
- Efficient Routing and Dispatching: Invest in route optimisation software to minimise fuel costs and delivery times.
- Real-Time Tracking: Provide customers with real-time tracking of their goods, improving transparency and reducing delivery status enquiries.
- Technology Integration: Use technology tools and automated systems for scheduling and proof of delivery.
- Diversify: Expand your services to include same-day delivery, express delivery, and specialised handling for fragile items.
- Attract New Employees: Offer incentives such as better pay, employee benefits, and good working conditions.
How Can You Remain Competitive as a Small Business?
Large 3PL (third-party logistics) companies have automated systems in place depending on what area of the supply chain they specialise in. Transportation Management Systems (TMS) are rapidly becoming integrated into 3PL companies and courier businesses of all sizes. If you’re a smaller courier business and you’re up against bigger 3PL businesses, using automated processes can help you manage your fleet, employees, and customers.
Transportation logistics are an ecosystem which, with the expansion of the courier market, is set to grow. A large part of your business will be data-driven, so using an online management system that eliminates the need for manual data entry is an efficient way of handling a large amount of data. This will enable you to track orders and inventories, produce reports, and inform your business plan and model, now and in the future. Streamlining your processes can save you time and money as your business becomes busier.
Costs for Carriers Are Rising: How Can You Plan Ahead?
Inflation, high fuel costs, shipping capacity, longer shipping routes, and shifting customer expectations means that the courier industry is under more pressure, despite the boom in demand for carriers. Retail giants have upped the ante around shipping times, with some deliveries needing to be fulfilled in one or two days. Combine this with growing demand for online deliveries, and we see courier businesses growing rapidly but simultaneously needing far more efficient logistics processes.
Planning ahead can alleviate some of the burden that couriers carry, such as optimizing logistics and timing. Monitoring consumer patterns and behaviour can also enable you to stay one step ahead. If Christmas is approaching and demand is set to skyrocket, employing more courier drivers, servicing your motor fleet, organising delivery schedules, and learning to adjust plans at the last minute can help you gear up for this busy period. Nurture good working relationships with your network, your broker, receiver, shipper, and clients. Technology is great for the smooth running and management of your business, but in a world that often lives online, face-to-face communication can help cement great partnerships.
As an established provider of business insurance for self-employed couriers and fleet owners, BCD is your first stop for finding suitable cover at affordable prices. We’re trusted by thousands of independent business owners like you to find appropriate insurance to protect large and small enterprises.
For a NEW Quote, click here: https://www.businesschoicedirect.co.uk/contact-us/
Courier Insurance: Phone: 0333 257 5013
Fleet Insurance: Phone: 0344 776 5302
Business Choice Direct Insurance Services is a trading name of Specialist Broking Retail Limited who are authorised and regulated by the Financial Conduct Authority. Specialist Broking Retail Limited is registered in England and Wales No. 10301653. Registered Office: Affinity House, Bindon Road, Taunton, Somerset, TA2 6AA.