It has been a tumultuous few years for parcel carriers. In 2020 carriers were reporting unprecedented pandemic-driven volume growth of anywhere between 20-40%. From 2021 to 2022 pandemic-driven volumes fell back to more normalised levels. The economic downturn in 2022 has acted as a constraint on demand, resulting in a moderate decline in volumes.
Whilst companies’ quarterly y-o-y reporting for 2022 shows parcel volume decline, revenues are not following the same pattern, as companies implement pricing strategies to maintain profitability.
For express market forecasts, Ti provides real terms growth forecasts which show underlying market growth and strip out the effects of price inflation. Forecasts do not attempt to measure or consider changes in prices and exchange rates that will take place over the forecast horizon. Forecast growth rates are driven by estimated changes to parcel volumes only and are thus ‘real term’ forecasts. As such, the data provided should be viewed as a demand forecast rather than a pricing forecast.
TI Revised Projections for 2022
Ti’s interim projections indicate that the global express market is expected to grow by just 0.1% in 2022 in real terms following a more pronounced decline in H1 2022 (-1% y-o-y) as volumes continue to soften from the pandemic induced peak and the economic bounce back in 2021.
Of the three major regions (Asia Pacific, North America, and Europe), Asia Pacific is expected to have led real growth this year (4.7% y-o-y). Both the European and North American markets are expected to see their respective express markets contract as inflation worsens and volumes stabilise against 2021 highs.
Demand in the Asia Pacific market is expected to grow at a more muted pace in 2022 by 4.7% y-o-y reaching a value of €188,557m. The market is also expected to remain the largest express market, in both the international and domestic segment, with a total market share of 40.6% in 2022.
Ti has revised down its Europe Express and Small Parcels market size projections for 2022, after an unfavourable change in economic and industry conditions in the second half of the year. The European express and small parcels market is expected to contract by 5.9% y-o-y, reaching a value of €95,175.80m. Many carriers in Europe have reported a decline in volumes compared to 2021. For instance, Poste Italiane’s parcel volumes for the first nine months of 2022 were 169m, a decrease of 7.0% compared to 181m in the first nine months of 2021. Another example is DPDHL’s Parcel Germany division, which handled 1,181m parcels in the first nine months of 2022, a decrease of 11.2% compared to the 1,330m handled in the same period in 2021.
Demand in the North America market is expected to contract by 2% y-o-y in 2022. North American parcel providers such as UPS and Canada Post have reported declining express volumes in Q3 2022; UPS has seen total average daily package volumes in its US Domestic Package segment fall by 2.8% y-o-y in 2022 so far, whilst Canada Post reported that parcel volumes fell by 16.2% y-o-y in Q3 2022. The market is expected to reach a value of €158,284m and remain the second largest express market.
For more details on 2023 growth and beyond, please see TI’s free Whitepaper Global Express and Small Parcels Market Size and Forecasts 2023
Author: Paul Chapman
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