Courier, Express, and Parcel Services
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Global CEP Industry Outlook

• The global CEP industry was valued at approx. $356 billion in 2019. The market was forecasted to grow at about 5.8 percent Y-o-Y to reach $366 billion by 2020.
• The e-commerce industry is the main driving force for the forecasted period. In 2019, the revenue of the e-commerce sector stood at $3.36 trillion. It was projected to grow at a rate of 23.8 percent by 2020 to reach a value of $4.1trillion.

Drivers and Constraints for the CEP Industry

Drivers

E-commerce

• The global e-commerce market is expected to generate revenue worth around $5 Tn in 2021.  

• E-commerce majorly involves business-to-business (B2B) businesses and online shopping.  As per various courier industry news, the industry has witnessed a significant upsurge across the globe over the recent past.

Real-time Tracking Feature

• Courier industry players are offering real-time tracking features to the consumers, which wards off the risk of lost parcels and thus loss of consumer loyalty. To assure this, market players are delivering online tracking facilities and SMS services to consumers. 

• The real-time tracking feature provides insights on when the package is scheduled to arrive. Moreover, this feature offers insights into the number of halts or conveyances the delivery person will make before contacting the consumers. This delivery innovation steps up the convenience of consumers by offering them better transparency of their packages. 

• Various logistics companies have begun integrating artificial intelligence (AI) solutions such as route planning, intelligent transportation, and demand planning in their workflows.

Global Import and Export Activity

• Continued shifts in the global economy toward more services, increased production of high-value and lightweight goods, and expanded trade among the member countries result in increased imports and exports.

GDP

•  The CEP market is directly proportional to the GDP of a country. The GDP is an indicator of economic parameters such as manufacturing, trade, and consumer spending, impacting the courier industry directly.

Constraints

Digitization

• Technology and digitization have been reducing the volume of physical mails, thus challenging courier industry players.

Fuel Rate

• Fuel price is one of the major costs incurred by service providers.
• Fluctuating fuel prices impact service providers; if fuel prices go up, profit margins decrease.

Service Provider Maturity

• The CEP market is highly mature in North America and Western Europe, with fierce competition among the top global suppliers (DHL, UPS and FedEx). The top global service providers in the courier industry include Deutsche Express, FedEx, UPS, TNT, and Express Yamato Holdings.

• The CEP market is gaining pace in APAC and the Middle East owing to the booming e-commerce business and presence of numerous service providers. Further, the CEP market is highly fragmented in both the regions.

Supply Market Outlook

Global/Regional Outlook

Increase in M&A and tie-ups

• Global suppliers are enhancing their presence by having tie-ups and M&A with regional players to use their expertise (on a regional level).
• FedEx acquired TNT Express in a $4.8 billion deal, assisting to expand its presence and market size in Europe.
• UPS cooperates with First Flight couriers in India to increase its presence in the Indian courier, express, and parcel market.

Value-added services

• Global suppliers have shaped their service offerings based on shippers' requirements. Services such as same-day delivery, door-to-door service, NFO* options, time-critical services, and customized supply chain solutions.

Tier-2/Local Supplier

• Global suppliers collaborating with regional suppliers to cater to the domestic needs of CEP in the region (e.g. DHL and Blue Dart collaborate to cater to the international operations of BlueDart).

• Tier-2 and tier-3 suppliers entering the CEP market to bridge the demand-supply gap for e-commerce companies by handling last-mile delivery.

• This courier industry analysis shows that several small and regional players have cost-effective supply chains given the advantage of using a 3PL for last-mile delivery rather than having end-to-end services.

 Engagement trends

• Single sourcing: Shippers with high volumes of domestic and limited international shipments adopt a single-sourcing strategy in order to secure maximum discounts on rates and incentives on volume. In order to mitigate the risk of dependency, shippers can engage with another supplier as a secondary carrier. This is usually for <15 million USD spent.
• Multiple sourcing: Shippers with significant volumes of international express transactions 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 a primary carrier. However, the scope of securing discounts on high spending is reduced. This is usually for >15 million USD spent.

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

Pricing Model Negotiation Levers And Contract Practices

• The negotiation levers are very important for a supplier or buyer in the V to be aware of. They are annual rate discounts, tiered discounts, accessorial charges, and DIM factor.
• The contract period varies from a minimum of one year to a maximum of five years
• The contracts are negotiated with a turn around time for payment cycles. The time is 15 to 30 days for global suppliers and 30 to 45 days for regional suppliers. Pricing can be determined either by the volume or the weight of the parcel (usually the higher one)
•  The major cost components are labor costs and industrial purchases which make up 50 to 70 percent of the total costs 

Courier, Express, and Parcel Services Market Overview

Global suppliers of parcel services are enhancing their presence by having tie-ups and M&A with regional players to use their expertise (on a regional level).

Global suppliers in the courier express parcel market have shaped their service offerings based on shippers’ requirements. Services such as same-day delivery, door-to-door service, NFO* options, time-critical services, and customized supply chain solutions.

Courier industry trends show that many small and regional players in the courier market have cost-effective supply chains, due to the advantage of using third-party logistics for last-mile delivery rather than having end-to-end services.

The major cost components are labor and fuel costs, which add up to 40–70 percent of the cost component. Global CEP suppliers go for rent/lease of warehouses/sorting facilities rather than owning them at a regional level, thus reducing fixed costs.

The price of a Courier, Express, and Parcel services is primarily determined by the volumetric or actual weight of the shipments (whichever is higher), distance to be shipped, and time of delivery. Typically, rates increase with the decrease in transit time.

Innovation

Market players have been implementing loads of innovations to achieve greater efficiency and sustainability. One of the main areas of innovation is the final-mile delivery. Innovative solutions for last-mile delivery have made a huge impact on the courier industry globally. Also, the report provides case studies where these solutions have been successfully implemented.

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.