Courier, Express, and Parcel Services: Australia

Regional Market Outlook on Courier, Express, and Parcel Services: Australia

Market Size (2023 F) : $7.5 billion

CAGR (2020–2023 F) : 5–7 percent annually

Market Overview

• Australian market’s parcel volume is predicted to reach 1 billion by 2022

• The market is expected to have volumes reach 1.2 billion by 2023 with growth rate of 5-6 percent

• The market is dominated by Australia Post holding major share of 47 percent, both in terms of revenue and volumes, followed by Toll and TNT Express

Cost Drivers

• Australia diesel price saw a drop for Q3 2020. This was mainly due to drop in crude oil prices influenced by a decrease in supply. However, the diesel prices are expected to increase for 2021, with the rebound in the global crude oil price. Labor wages are projected to increase by 2–3 percent for 2021 with an increasing demand for skilled workforce

Market Trends  

• The global shipping volume remains on track to surpass 100 billion parcels in 2020
• Australians receive an average of 34 parcels each year, driven by fast growth in e-commerce sales
• Due to COVID-19 impact, the Australian market saw a large spike in the short-term overflow space and fulfilment centers, mostly from consumer goods retailer and logistics provider

Supplier Market Landscape

• Australian Mail market is dominated by the National Postal Operator – Australia Post.
• CEP market is dominated by global players and there is rise in consolidation of market with players being acquired.
• Ex: Toll Group (acquired by Japan Post) and TNT (acquired by FedEx)

Service Differentiation

• The ecommerce revolution in Australia has contributed significantly to the strength of the parcel shipping market.
• The parcel delivery market is seeing an exponential growth backed by ease of shipping, delivery and tracking parcels domestic and internationally.
• Factors such as simplified and reliable service, accelerated delivery times, and transparent and accurate tracking will be the key to success for suppliers. Hence, players are finding ways to improve their delivery service, improve technology such as online tracking  and aim for faster delivery of parcels.

Australian Mail Services Market Overview

• The Australian mail service market is highly regulated with the power residing with the Australian Competition and Consumer Commission (ACCC)
• Section 29 of Australian Postal Regulation 1998 provides an exclusive right to Australia Post to carry out postal services
• Non-legislative barriers to entry such as product differentiation and high sunk cost reduce the entry of potential competition in the market
• Reforms were passed in 2015 to introduce a two-speed letter service system, with a price increase in regular letters and introducing a priority service at a higher cost
• The cost of letter services has seen an increase of 7.76 per cent (2008-2018) to AUD 1 from AUD 55 cents in 2008
• Revenue with respect to mailing sector has declined due to switch to digital communication and high fixed cost of delivering mail. These are the major drivers influencing the price increase
• The Australian mail service market is facing a reduction in volume size due to digitalized communication. Prices of post have seen an increase due to high fixed cost of delivery and the lack of competition. 
• Due to the monopolistic nature of Australia Post, the community service and 4000 + postal point requirements have seen the postal price gone up
• Rise of digital transactions and communications have reduced the postal volume
• E- Substitutions such as Digital letters, SMS updates and internet are the drivers of digitization

Why You Should Buy This Report

• Information on the Australian mail service market overview, trends, cost drivers, etc.
• Supplier analysis of the Australian mail services industry
• Australia mail pricing models and rates