CEP services

By offering fast and reliable solutions, CEP services have given an enormous innovative boost to logistics. As a result, concepts like hub and spoke and distinct customer service are now extensively used.

Small parcels delivered quickly

The concept of CEP services has caught on globally. No matter whether a person is in Sydney, Shanghai, Istanbul, Paris or New York - the streets are filled with yellow, brown or orange vehicles bearing familiar lettering. Customers around the world can use the fast CEP services and send their shipment anywhere in a very short time.

Duties and extent of CEP services

1,760,000,000 shipments are made in Germany each year.
6,000 to 8,000 companies offer CEP services in Germany.
320,000 people work in the CEP sector in Germany.

The business model of the courier, express and parcel sector

The CEP sector has arisen over the past 20 years from the traditional transport of less than truckload general cargo weighing up to two tons. The starting point of the development was the decision by parcel services to concentrate on the share that was easy to standardize and to establish this area as a separate market for parcel shipments.
A characteristic feature of CEP services is high shipping volume with relatively low weights per parcel. The transported goods usually weigh no more than 31.5 kilograms. This limit ensures that a single person can pick up or deliver the parcel. In the United States, the weight of 31.5 kilograms, or 70 pounds, marks the limit for goods transport subject to approval.
The offer of CEP services is based on sophisticated networks that enable fast shipments and exact commitments for delivery times. The networks generally consist of a first leg and subsequent leg, main leg and subsequent leg.

Hub networks of a courier, express and parcel service

Personal supervision with courier services

Courier services transport spontaneously sent shipments that are highly valuable - e.g., watches, jewelry and high-quality replacement parts. Characteristic features are permanent personal supervision of the shipment and the courier’s access to the shipment at any time in order to make arrangements. Another criterion is that couriers provide seamless transport and delivery documentation. The shipments weigh an average of 1.5 kilograms. For national shipments, delivery is usually made on the same day or by 10 a.m. on the following day. The market consists of many small companies. Courier services are available both nationally and internationally.

Fast transports with express services

Express services quickly and reliably transport parcels that are usually of high value. Unlike courier services, the transport is not done in an exclusive and personal manner. But the express transport is performed by “a single source.” This is done within the service provider’s own networks, some of which may span the entire globe. Fixed delivery times like 8 a.m., 9 a.m., or 10 a.m. are part of the express service provider’s offer.

Shipment of standardized packages by parcel services

Parcel services concentrate on national, regular and sometimes scheduled transports of largely standardized, lightweight packages. Deliveries are usually made overnight. The parcel companies design their services for individual shipments. They are much more concerned about quantities and use a high degree of systemization. The transports done by parcel services are easier to handle as a result of their standardized sizes compared with the transport of general cargo that has various forms and sizes. Processes using mechanical conveyor systems such as rollers, running belts and slides are widely used. This allows operations and IT processes to be highly standardized.

Service from a single source with system integrators

The traditional breakdown into separate courier, express and parcel services is becoming increasingly difficult to make. The line between the individual segments in the CEP area is disappearing because customers increasingly want all transport services to be provided from “a single source,” and CEP service providers are responding to this request. They offer service along the entire transport chain within a closed system.
All services are independently performed door to door with all the service's components in regional and global networks. For this reason, CEP service providers offering this service are called system integrators. This approach offers customers one benefit over traditional forwarding services: No interface problems occur.
The CEP market in Asia has developed rapidly in recent years. Asia’s international express market, the core market of many CEP providers, has a market volume of €4 billion. In the Asian market, DHL is the market leader by far. The market for CEP services is expected to continue growing, propelled by anticipated economic development in the Asian region.
The CEP market in the so-called emerging markets - which DHL defines as Turkey, Greece, Saudi Arabia, Russia, South Africa and the United Arab Emirates - has a market volume of €1.5 billion. The product called “import Express” plays a major role here because these countries are strong import markets. This market of the international express business has a volume of €464 million, 47 percent of which belongs to DHL.

References

Market Research Service Center in Zusammenarbeit mit Colography Group 2006
Market Research Service Center in Zusammenarbeit mit Crescendo Partners / L.E.K. Consulting 2006
dhl - discover logistics - course - cep _ definition