|A Courier is a person or company contracted to deliver messages, package sand mail. Couriers are distinguished from ordinary mail services by features such as speed, security, tracking, signature, specialization and individualization of services, and committed delivery times, which are optional for most everyday mail services. As a premium service, couriers are usually more expensive than usual mail services, and their use is typically restricted to packages where one or more of these features are considered important enough to warrant the cost. Different courier services operate on all scales, from within specific towns or cities, to regional, national and global services. The world’s largest courier companies are Aramex, DHL, FedEx, TNT N.V., and UPS. These offer services worldwide, typically via a hub and spokes model.
Couriers prior to the industrial era
In ancient times runners and homing pigeons were used to deliver timely messages. When the horse became domesticated its use was rapidly adopted by couriers. Before there were mechanized courier services foot messengers physically ran miles to their destinations. To this day there are marathons directly related to actual historical messenger routes.
Development of the modern courier industry
Types of courier
In cities, there are often bicycle couriers or motorcycle couriers but for consignments requiring delivery over greater distance networks, which may often include trucks, railways and aircraft, are used.
Many companies who operate under a Just-In-Time or “JIT” inventory method often utilize on-board couriers. On-board couriers are individuals who can travel at a moments notice anywhere in the world, usually via commercial airlines. While this type of service is the second costliest – general aviation charters are far more expensive – companies analyze the cost of service to engage an on-board courier versus the “cost” the company will realize should the product not arrive by a specified time (i.e. an assembly line stopping, untimely court filing, lost sales from product or components missing a delivery deadline, organ transplants).
Over time, demand for a new type of representative courier has emerged. With the increase in fuel prices and productivity goals monitored closely by companies, this new type of all-in-one courier has developed to “take care of business”. Workers in companies have more work and less time to be out of the office. Operating largely using independent contractors that have gone through a screening process and background checks have found a niche in the courier industry. Research, intransit pet care, complex paperwork filing, and a host of other services are now offered in this new category of courier service.
Courier industry by country
The genus of the UK sameday courier market stems from the London Taxi companies but soon expanded into dedicated motorcycle despatch riders with the taxi companies setting up separate arms to their companies to cover the courier work. During the late 1970s small provincial and regional companies were popping up throuout the country. Today, there are many large companies offering next-day courier services, including Interlink Express, Citylink, Amtrak, and UK divisions of worldwide couriers such as FedEx, DHL and UPS.
There are many ‘specialist’ couriers (eg. The DX, Bybox) usually for the transportation of items such as freight/palletes, sensitive documents and liquids.
The ‘Man & Van’/Freelance courier business model is highly popular in the United Kingdom, with thousands upon thousands of independent couriers and localised companies, offering next-day and sameday services. This is likely to be so popular because of the low business requirements (a vehicle) and the lucrative number of items sent within the UK every day.
Motorbike couriers still exist, but mainly in and around London (and other large cities), where there is often congestion, as they are much cheaper to run in heavy traffic.
Large companies such as Interlink Express, Citylink and FedEx all now provide P.O.Ds online. Lots of the smaller companies and freelance ‘Man & Vans’ are unable to provide this, but this is changing with forever lowering costs of technology.
Royal Mail was up until recently a reasonable competitor of most of the large couriers; offering next day and special delivery services. This has however changed, with higher costs, strike action and a lowering public perception of the company. With companies like Royal Mail & The DX (who offer a private courier ‘box network’), it can be difficult to draw a clear-cut line between postal services and couriers.
Some UK couriers offer next-day services to other European countries. FedEx and Interlink Express both offer next-day air delivery to many EU countries. Cheaper ‘By-Road’ options are also available, varying from 2 days delivery time (eg. France), to up to a week (eg. Former USSR countries).
Large couriers often require an account to be held (and this can include daily scheduled collections). Senders are therefore primarily in the commercial/industrial sector (and not the general public); some couriers such as DHL do however allow public sending (at higher cost than regular senders).
The courier industry has long held an important place in United States commerce and been involved in pivotal moments in the nation’s history such as westward migration and the gold rush. Wells Fargo was founded in 1852 and rapidly became the preeminent package delivery company. The company specialized in shipping gold, packages and newspapers throughout the West, making a Wells Fargo office in every camp and settlement a necessity for commerce and connections to home. Shortly afterward, the Pony Express was established to move packages more quickly than the traditional method, which followed the stagecoach routes. It also illustrated the demand for timely deliveries across the nation, a concept that continued to evolve with the railroads, automobiles and interstate highways and which has emerged into today’s courier industry.
Sameday couriers deliver in less than 24 hours and is an integral part of any modern economy. There are roughly seven thousand courier companies in theUnited States that make up this multi-billion dollar sector. The business model for the courier industry is particularly dependent on independent contractors – In fact, it is estimated that 50-65% of U.S. courier companies use independent contractors to make deliveries in addition to their own dedicated employee resources. The nature of the industry, with its on-demand, often unscheduled delivery model, requires a varying number of courier drivers on any given day and time of day to complete a set service. Experts in this method of network delivery maintain hundreds of standby couriers in a “ready to move” status as devised by Mark Kent, professor of Logistics at the University of Ghent. However, this business model is under threat from IRS Reclassification where IC’s are being recategorized as W-2 employees. This reclassification typically results in fines being imposed on the offending courier company.
In December 2007, the Internal Revenue Service of the US ‘tentatively decided’ that FedEx Ground Division might be facing a tax liability of $319 million for 2002, due to misclassification of its operatives as independent contractors. Reversing a 1994 decision which allowed FedEx to classify its operatives that own their own vehicles, the IRS is auditing the years 2003 to 2006, with a view to assessing whether similar misclassification of operatives has taken place. FedEx denies that any irregularities in classification have taken place, but is facing legal action from operatives claiming benefits that would have accrued had they been classified as employees.
Many expedited courier companies are regional, small businesses, which can also provide additional services such as logistics management, archive warehousing, messenger centers, outsourced mailroom services and coordinated airfreight forwarding delivery services.
In the UK, most of the couriers or despatch riders were motorcyclists when the sameday delivery business started to show up in London. These tended to evolved from taxi companies but soon regional courier companies were popping up throughout the country. Starting in the mid 1980s, bicycle couriers, who were more economical for shorter distance deliveries, began to supplant motorcycle couriers in the larger cities. Rising costs, including insurance premiums and petrol, made motorcycle couriers less competitive. Except for the metropolitan areas most of the sameday couriers throughout the country now use small vans to do deliveries
These couriers specialize in delivering important or sensitive packages that need to be received in the local area; and/or because of time and temperature concerns, such as organs for transplant or key equipment or parts that are necessary for day to day operations. While most companies use courier services certain industries depend on couriers on a daily basis. Biomedical labs need samples for testing and evaluation, manufacturing industry require parts to keep their plants operating smoothly, financial institutions transfer multiple documents every day between branches and processing centers, law firms must deliver confidential signatured documents on very strict deadlines for court filings andpharmaceutical distributors use couriers to transport medications to hospitals andnursing homes.
Even two-day delivery services use courier firms. Items that are mis-sorted, forgotten or just not picked up on a larger couriers route. When a mistake has been discovered, courier firms fill in the gap and ensure packages are delivered on time.
Courier firms specializing in same-day delivery provide an invaluable service because the “big five” (Aramex, DHL, FedEx, TNT N.V., and UPS) in the delivery business simply do not provide same-day delivery services uniquely designed to meet specific individual customer needs. Expedited delivery firms also prevent the big five from having a complete monopoly on deliveries that must be completed in a short period of time. This competition, both among couriers and with the big five, has greatly increased the quality and professionalism of the industry, while also ensuring reasonable rates for customers. These 7,000 plus small businesses also help to keep the pricing competitive and the big five honest. Additionally, the courier industry consists almost entirely of small, locally owned and operated businesses, ensuring that revenue is retained within the community served, rather than siphoned off by a multi-national corporation.
Working conditions of couriers
The conditions of employment of couriers vary from country to country, city to city and even company to company. Contracts governing the relationship between individual courier and company are subject as much to customary practice, as local ordinance. In some places couriers are independent contractors paid oncommission and do not receive benefits such as health insurance. In other places they will be regular employees of the courier company enjoying all the benefits thereof.
In the US, the Obama-Durbin Independent Contractor Proper Classification Act of 2007 was introduced to deal with the problem of workers ‘misclassified’ as independent contractors. It is not clear what effect this legislation, if enacted, will have on the U.S. courier market. But if, as is the Act’s intention, courier companies are forced to treat those workers that they previously declared independent contractors, as employees, with all the benefits thereof, then there is no doubt that costs will rise.
The employment status of the couriers of one of the UK’s biggest sameday courier services, CitySprint, was challenged by the GMB trade union in December 2007. The challenge arises from the firm deciding to terminate the contract of one of its operatives. The GMB seeks to establish that more than 1500 CitySprint operatives currently classified as self-employed sub-contractors should be re-classified as employees.
A decision by a courier company to use independent contractors as opposed to employees is greatly affected by the geography and transportation networks of the city/area that it serves. In the New York City metropolitan area, which has a high density of businesses and residences and a well developed public transportation infrastructure, courier companies generally use independent contractors as foot, bicycle or motorized couriers.
These contractors may opt to work for multiple companies to maximize their income and leverage their expenses. In some cases the ICs may work for different companies at different times of the day, or even juggle work from two or more clients. Couriers who handle specialized jobs (vanloads, destinations beyond the reach of public transportation systems) will use their own vehicles.
In areas with less density and infrastructure (Northern California and Texas are examples) courier companies are more likely to hire hourly employees due to extended distances and delivery timeframes. Company-owned vehicles are more likely to be used.
What to look for in a Courier Company
Businesses or individuals looking to hire same day courier companies are faced with a bewildering array of choices, especially in large metro areas. However, there are things you should look for when shopping for a courier:
– How long has the company been in business? How long have they been servicing your target area? Companies who’ve been in business for a long time (10+ years) usually have a higher percentage of experienced couriers and dispatchers and are better equipped to handle specialized work and provide accurate delivery time info.
– How fast does the company answer the phone when you call? Despite the proliferation of apps and online services, same day deliveries are best ordered over the phone. Consistently short ASA (Average Time To Answer) is critical when you need something picked up immediately. With short ASAs and a knowledgeable dispatch team, regular customers can dial and place a delivery order in less than 40 seconds, shorter than many online logins alone.
– How long has the average contractor or employee been working for the courier company? Experienced couriers know their “home” territories and leverage that knowledge to expedite every delivery. In high density markets couiriers need to have through knowledge of the transportation systems. For example, in New York City, depending on the origin point, the subway station closest to the destination may not be the fastest route. Intimate knowledge of local and express trains, one way streets, local construction and time-of-day all speed up deliveries. Large route couriers such as UPS and Federal Express employ route analysis software to determine whether drivers should make left or right turns at specific points and avoid certain long stop lights. In an ‘non-route” environment, every day is different and reliance on the street smarts of individual couriers becomes a significant value add. Low average tenure with a company may indicate a poor working environment, bad cash flow or, in the case of ICs, a courier/company split that is below average for the area.
– How diverse are the company’s service offerings? Can they handle valuables and insure / bond their work? Can they handle scheduled and ad hoc work? Mail runs? Bank work? Vanload work? Court filings? Medical/lab pickups? Mobile notary? A wide range of services indicates that 1.: Dispatchers and couriers can be trusted to handle complicated and sensitive work, 2.: You spend less time explaining what needs to be done.
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