The global express and small parcels market grew by 13.0% in real terms in 2020. Both domestic (13.2%) and international (12.5%) markets experienced substantial expansions.
Global Express and Small Parcels Market Size & Growth 2010-2025
Source: Ti
Overall, B2B volumes dropped significantly. The segment was detrimentally impacted by the damage done to the economy by the pandemic. As factories closed during the height of the crisis, before recovering slowly, demand for express and parcel services from industrial sectors slowed drastically.
However, the pandemic also led to worldwide closures of physical stores. This led to a dramatic shift towards online purchases and with it a surge in demand for B2C parcels. Furthermore, the closure of service-related sectors appears to have led to a shift in household spending towards consumer goods, which further boosted the market. B2C demand expanded at a fast enough pace, not just to offset the decline in B2B, but to power the market to decade-high growth rates.
Market expansion to decelerate as e-commerce growth rates normalise
Momentum is expected to slow in 2021, with the market projected to grow by 8.9% in real terms. Domestic growth is projected at 8.6%, with the international segment expected to expand by 10.0%.
To track growth in logistics markets following the pandemic, Ti introduced the Covid Recovery Tracker (CRT) metric for 2021 and 2025. This indicates how much larger or smaller a market is expected to be in 2021 and 2025 relative to its pre-Covid-19 levels. According to this measure, the market will be over a fifth larger in 2021, with a CRT21 of 23.1%. This is attributable to continued expansion in B2C e-commerce volumes accompanied by a strong recovery in the global economy.
Regional Express COVID Recovery Tracker 2021
Source: Ti
The first half of the year is expected to be characterised by strong year-over-year B2C e-commerce growth due to favourable comparisons with the pre-pandemic and early lockdown stages of 2020. In many regions, containment measures or some form of lockdown restrictions still apply which have proven to lead to higher levels of online shopping. As these restrictions are lifted, shoppers are expected to return to bricks-and-mortar stores to varying degrees, which will blunt the sky-high year-over-year growth rates that were seen over much of the second half of 2020 and into 2021.
B2B growth is being positively influenced by the performance of the economy. Thanks to government interventions to keep businesses afloat and employees in work, sentiment is strong. Furthermore, household savings that were effectively enforced during lockdowns are being unwound and powering a V-shaped recovery in economic activity. These conditions are enabling a strong improvement in B2B volumes.
Speaking on the publication of Ti’s latest whitepaper, Post Covid-19: Global Express and Small Parcels Market Forecasts 2020-2025, which provides deeper coverage of the global express and small parcels market size and growth prospects, Andy Ralls, Senior Quantitative Analyst, said, “The strong recovery in B2B volumes will power market growth over 2021, with the rate of expansion in B2C e-commerce softening following a bumper 2020. Longer-term, B2C e-commerce is expected to drive both domestic and international growth.”
Source: Transport Intelligence, June 15, 2021
Author: Transport Intelligence
In Global Express & Small Parcels, Ti’s provides market size and growth rates for 94 countries, 7 regions and the world, for the years 2010-2020, in addition to a forecast for 2025. For 2021, market sizes and full-year growth rates forecasts have been estimated for 23 countries, 7 regions and the world. You can access Ti’s full range of market sizing with a subscription to GSCi, or by contacting Michael Clover, Ti’s Head of Commercial Development.
