Fri, Dec 07, 2018 - Page 12 News List

Efficiency improvements cut into Pelican’s profit

By Kao Shih-ching  /  Staff reporter

Installation and e-commerce deliveries contributed to steadily rising revenue at Taiwan Pelican Express Co (台灣宅配通) in the first 11 months of the year, but net profits declined from a year earlier due to investments in efficiency at its new logistics center in Taoyuan.

The nation’s first home delivery service operator installed a smart conveyor system at the center that can automatically categorize and distribute packages, but some deliveries were delayed in August last year due to equipment failures, it said.

The staff was not familiar with the automated system, so the firm spent a year training employees to improve efficiency, Taiwan Pelican vice president Alvin Hsu (徐慶懿) told an investors’ conference on Monday.

As the firm has to deal with packages of various sizes every day, it decided to automate its facilities, Hsu said, adding that the new systems presented problems, but the company has overcome them.

The Taoyuan staff can deliver 120,000 packages per day, up from 100,000, thanks to the new equipment, he added.

The firm, which reported revenue of more than NT$3 billion (US$97.22 million) for the first time last year, reported NT$3.06 billion in revenue in the year through last month, up 10.14 percent from the same period last year.

While its local rivals in August last year decided to stop delivering on Sundays, Pelican decided to remain open to become the only firm to deliver on Sunday, which has increased e-commerce orders, Hsu said.

However, such orders are not always good, Taiwan Pelican assistant vice president Vince Huang (黃錦郎) said.

The firm in March got a lot of orders from e-commerce companies, but mostly for toilet paper, which people rushed to buy at the time due to rumors about price hikes, Huang said.

While one truck can on average carry 150 regular packages, it can only fit 33 packs of toilet paper, so the tissue shipments decreased profits, Huang added.

“Delivery companies are the pillar on which e-commerce companies are built,” Huang said, adding that the firm learned to closely discuss market strategy with e-commerce firms, which resulted in toilet paper not being featured on Singles’ Day last month.

The firm began offering customers help installing home appliances, such as refrigerators, diversifying its services and earning higher profits, he said.

Singles’ Day sales, oil price cuts and equipment efficiency improvements have improved Taiwan Pelican’s revenue and profit outlook for the fourth quarter, he said.

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