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. $261 billion in 2017 and the market is forecasted to grow at about 6 percent Y-o-Y to reach $277 billion by 2018
• The e-commerce industry is the main driving force for the forecasted period. As of 2017, revenue of the e-commerce sector stood at $2.3 trillion and is projected to grow at a CAGR of 18 percent until 2020
• Courier industry analysis shows that major cost components industry purchases and labor cost are 50–70 percent of total costs.
• Top global service providers in the CEP industry are Deutsche Express, FedEx, UPS, TNT, and Express Yamato Holdings.

Drivers and Constraints for the CEP Industry

Drivers

E-commerce

•  The global e-commerce market was valued at $2.3trillion in 2017. On-time delivery plays a crucial role in e-commerce, and e-retailers depend on CEP service providers to fulfill these demands

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

Constraints

Digitization

•  Technology and digitization have been reducing the volume of physical mail

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 decreas

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)
• In APAC and the Middle East, the CEP market is emerging due to e-commerce business and there are numerous service providers. The CEP market is highly fragmented in these 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
• Many small and regional players have cost-effective supply chains, due to 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
• Multiple sourcing: Shippers with significant volumes of international express transactions adopt a multiple sourcing strategy 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 spends is reduced

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. 

Why You Should Buy This Report

• The courier industry analysis report gives insight into the global and regional courier industry trends, drivers and constraints, regional outlook into the APAC, Europe and North America and Porter’s five force analysis of the emerging and developed regions.
• It gives a breakdown of cost structure and gives best sourcing and pricing models.
• The report gives key supplier profile and SWOT analysis of players like FedEx, DHL and UPS.