Courier, Express, and Parcel Services

Global CEP Industry Outlook

MARKET OVERVIEW

Global Market Size: $443.9 (2023 F)

Growth Rate (2020–2023 F): 4.59 percent

CAGR (2023-2028 F): 4.89 percent

• The global CEP market is expected to reach a revenue of $443.9 billion by 2023 growing at a CAGR of 4-5 percent. The market is driven by e-commerce. Due to supply chain challenges and rising inflation, the world's e-commerce business is predicted to generate $3.74 trillion in sales for 2022, $95 billion less than it will in 2021

• The market is expected to see low demand until Q2 2023, due to various factors, such as high inflation pressure, fuel price hikes, labor strikes. Due to inflationary pressure and labor strikes, revenue generation and compensation for increasing operating cost comes as priority for the courier players, hence, they are implementing higher GRIs and surcharges for 2023 even though the market is expected to see lower demand

Regional Market Outlook :North America

Growth Drivers and Market Trends

• Retailers and courier firms are under pressure to match the rising customer demand for faster moving shipments

• The e-commerce has grown steadily, so has the daily amount of parcel shipments

• To address the issue of last mile delivery, retailers are experimenting with alternative logistical methods and startup partners, such as crowdsourced deliveries

• There is also increased trend of parcel lockers in the region. Around 77,000 PUDO delivery terminals are available in the US through international couriers like FedEx, Amazon, UPS, DHL, and USPS

Cost Structure Analysis

• Labor occupies a major chunk of share in courier cost structure, with 41 percent in North America, 37 percent in Europe and Asia

• Second major cost driver is fuel with North America 20 percent, Europe 20 percent, and Asia 22 percent

• Secondary factors, such as admin cost, repair and maintenance, do not have that much of an impact in the cost structure compared to labor and fuel. With the ongoing geopolitical crisis, buyers can expect an increase of 8–15 percent in their courier cost structure across major geographies, such as North America and Europe

• Fuel and labor are the major impactful cost drivers. The current geopolitical issue has had a negative impact on both these factors impacting the entire cost structure

• It is predicted that freight capacity would gradually improve. However, the rise in jet fuel prices, driven by low oil stockpiles and anticipated incoming demand, may hinder the easing of freight rates

• Demand is expected to remain soft for 2023, due to factors, such as shortage of labors, economy slowdown, high fuel prices, high inflationary pressure, etc. Courier companies are however increasing prices and imposing surcharges despite the predicted volume decline to cope with increasing operating cost

Procurement Best Practices

• This section gives a detailed analysis of the Courier, Express, and Parcel Services Suppliers, Cost Analysis, Cost Breakdown by Country, Pricing Analysis, Sourcing Model - Key Insights, Pros, and Cons, Comparative Analysis

Commodity Price Forecast

Fuel price hike, labor wage increase, high inflation are factors negatively affecting the price index.

• North America: North American PPI courier index sees index values reach 164.1 by 2022 end. The index is expected to see a further increase of 1-2 percent for Q1 2023 to reach an index value of 165.7

• Europe: European PPI courier index sees index values to reach 108.2 by 2022 end. The index is expected to see a further increase of 1-2 percent for Q1 2023 to reach an index value of 109.2

• Asia: Asian PPI courier index sees index values to reach 111.4 by 2022 end. The index is expected to see a further increase of 1-2 percent for Q1 2023 to reach an index value of 112.5

Courier, Express, and Parcel Services Market Overview

Market Overview : US

• The US courier parcel volumes is expected to reach about $24 billion by the end of 2022

• The market is predicted to see further increase in parcel volumes to reach about 26 billion parcels by 2023

• The market is dominated by UPS & FedEx holding 70 percent of the market share, in terms of revenue

• In terms of volume, USPS tops the market with market share of 32 percent, followed by UPS & FedEx each holding 24 percent and 19 percent of market shares, respectively

Market Overview : Canada

• The market is expected to see parcel volumes reaching 1.7 billion by end of 2022

• The market is predicted to see volume growth of 5-6 percent in 2023 with volume reaching 1.8 billion parcels

• The market is dominated by UPS, Canada Post and Purolator holding 61 percent of the market share in terms of revenue

• In terms of volume, Canada Post occupies 20 percent of the market share, while Purolator occupies 12 percent of the market share

Sourcing Models for CEP Services

• Single sourcing: Shippers with a high volume of domestic and limited international shipments adopt a single–sourcing strategy in order to secure the maximum discount on rates and incentives on volume. In order to mitigate the risk of dependency, shippers can engage with another supplier as a secondary carrier

• Multiple sourcing: Shippers with a significant volume of international express adopt multiple–sourcing strategies in order to secure the regional expertise of respective suppliers. In addition, the risk of supply disruption is also low, with decreased dependency on primary carriers. However, the scope of availing discounts on high spend is reduced

Why You Should Buy This Report

• The market report on courier industry analysis offers insights about the global and regional industry trends, logistics services trends, drivers and constraints, regional outlook of APAC, Europe, and North America, and Porter’s five forces analysis of the emerging and developed regions.
• The regional courier market analysis covers the aspects of market maturity, best practices, and the industry share of North America (US, Canada), Western Europe (UK, France, Germany, Italy), APAC (India, China, Australia, New Zealand) and MEA.
• It breaks down the cost structure and offers the best sourcing and pricing models.
• It also presents the aspects of the courier industry such as courier, express and parcel services, logistics and transportation, inland transportation services, courier and parcel, post and parcel, mail and parcel delivery, express parcel and mail, postal services, courier delivery and pick up, last-mile delivery services, same-day delivery, express parcel, overnight delivery, click and collect service, and CEP.
• Further, this report on courier industry trends provides key supplier profiles and SWOT analysis of players such as FedEx, DHL, and UPS.