Global Express and Small Parcels

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The express and small parcels market experienced soaring revenues and impressive growth in 2020, but challenges lie ahead, particularly for the on-demand sector.

Global Express & Small Parcels 2021 provides comprehensive analysis of the current state of the market, the future of express and small parcels and what it might look like in a post-Covid era, and where there are opportunities for growth.

The report contains in depth assessment of the future of on-demand, evaluating the challenges the sector is facing now that buying behaviour is changing. The report also addresses B2B express, assessing market characteristics, major drivers, and customer segments.

Finally the report profiles and compares leading express providers and integrators, and contains Ti’s bespoke logistics market sizing, covering 2020 growth rates, full year 2021 projections and 2021-2025 forecasts.

This report contains:

  • Market sizing and forecasts – 2021 full year projections, 2020 full year and 2021 H1 growth rates and 2021-2025 CAGR forecasts, split by country, international and domestic.
  • Comparison of market pricing and parcel yields.
  • The future of on-demand delivery, including analysis of on-demand economics, investment, consolidation, localised services and market opportunities.
  • Detailed assessment of B2B express logistics, including market characteristics, major drivers, and customer segments.
  • In depth express provider profiles.
  • Comparative reviews of the global integrators.

This report contains:

  • Market sizing and forecasts – 2021 full year projections, 2020 full year and 2021 H1 growth rates and 2021-2025 CAGR forecasts, split by country, international and domestic.
  • Comparison of market pricing and parcel yields.
  • The future of on-demand delivery, including analysis of on-demand economics, investment, consolidation, localised services and market opportunities.
  • Detailed assessment of B2B express logistics, including market characteristics, major drivers, and customer segments.
  • In depth express provider profiles.
  • Comparative reviews of the global integrators.

Key Findings

  • Express growth looks to be slowing in the second half of 2021.
  • Ti projects the market will grow by 10.4% in 2021, and will grow at a 7.7% CAGR through to 2025.
  • There are far better prospects for on-demand in developing markets due to wealth inequality, driver remuneration and the ability to cover large urban areas.
  • To be economically viable, on-demand companies need to increase efficiency, delivery network density, ‘shopping basket’ value and commission.
  • As lockdowns end and on-demand volumes stagnate, consolidation may be the only option for providers to sustain the drop density they require to make their operations profitable.
  • Inventory policy and customer service levels are key drivers for B2B express logistics.
  • Buying behaviour is evolving, making it difficult to assess the trajectory of volume & demand for traditional B2B services.
  • In markets where competition is intense, achieving yield gains is challenging for existing operators.

Key Questions

  • On-demand delivery companies have thrived over the past 18 months, but do they have a future in the post-Covid age? And what must they do in order to succeed?
  • Why are on-demand prospects far better in emerging markets?
  • What does the profile of the B2B express logistics market look like in 2021? What are the major B2B express logistics drivers?
  • Why is traditional B2B express fading?
  • How fast has the market grown throughout 2021?
  • How fast is the market expected to grow over the next 5 years? And how will the market perform in a post-Covid age?
  • How has each region performed in 2021? Which regions are growing fastest?
  • How important is cross-border e-commerce to market growth?
  • Why have vertical sectors such as pharmaceutical and retail been such positive contributors to express volumes over the year?

Prof John Manners-Bell is Chief Executive of Ti, Honorary Visiting Professor at the London Metropolitan University’s Guildhall Faculty of Business and Law and an adviser to the World Economic Forum. He has over 25 years’ experience working in and analysing the global logistics sector.

Thomas Cullen is a widely respected writer and has been analyzing the global logistics market for over 15 years. He has edited a number of international publications and written for most of the leading trade publications in Europe. He has written several in-depth reports on a variety of subjects including Automotive and Chemical logistics. Thomas has been vital in adding value to Ti’s Logistics Briefing service for the last 10 years and works on many global consultancy projects.

Caterina Ciccone joined Ti in 2019 as a researcher. She studied English and Spanish Modern Languages in Italy where she developed a passion for research. After graduating Caterina studied teaching education at Bath Spa University. She has since then worked as a sales administrator using her Italian and Spanish language skills to support customers and as a researcher in the operational risk field. Caterina is passionate about learning about logistics companies and their strategies and contributes to Logistics Briefing and Ti’s Global Supply Chain intelligence portal.

Nia Hudson is a Research Analyst at Ti. She studied History as an undergraduate, before moving on to complete a master’s in public policy at Bristol University, where she developed a keen interest in globalisation and supply chains. During her time at Bristol, she also worked as a teaching assistant in a primary school. Nia is passionate about research and contributes to Logistics Reports and Ti’s Global Supply Chain intelligence portal.

Connor Wyse is a quantitative analyst at Ti. His main role is the sizing of several core logistics markets for Ti’s market reports. Connor studied economics at The University of Stirling, which has provided him with a strong understanding of economics and statistics. Connor is enthusiastic about researching logistics and deepening his knowledge of the industry.

TABLE OF FIGURES  5

1 The Future of On-Demand Delivery in a post-Covid World           7

1.1 ON-DEMAND ECONOMICS      9

1.2 RAISING INVESTMENT 11

1.3 CONSOLIDATION AND EMERGING MARKET PENETRATION        11

1.4 LOCALIZED SERVICES   13

1.5 MARKET OPPORTUNITIES       13

1.6 IN CONCLUSION: THE MARKET OF THE FUTURE    14

2 The future of B2B express logistics    16

2.1 MARKET SEGMENT CHARACTERISTICS         16

2.2 MAJOR B2B EXPRESS DRIVERS           17

2.2.1 Inventory Policy        17

2.2.2 Customer service levels      17

2.3 HOW TRADITIONAL EXPRESS IS USED: DISCRETE AND EXPLICIT 18

2.4 EXPRESS IN THE HEALTHCARE & PHARMACEUTICALS MARKET  19

2.4.1 Pharmaceutical trials         19

2.4.2. Pharmaceutical production         19

2.4.3 Hospital operations 19

2.4.4 Retail healthcare      19

2.4.5 Medical devices        20

2.5 MASS PRODUCTION ENGINEERING INCLUDING AUTOMOTIVE 20

2.5.1. Express for Automotive     20

2.5.2 Production engineering      20

2.5.3 Purchasing     20

2.5.4 Emergency logistics 20

2.5.5 Aftermarket   21

2.6 OTHER INDUSTRIAL MECHANICAL ENGINEERING & CHEMICAL 21

2.7 AEROSPACE       21

2.8 ENERGY OIL & GAS       22

2.9 RETAILING          22

2.9.1 Clothing Retailing    22

2.9.2 Food Retailing           23

2.10 OTHER RETAILING      24

2.10.1 Consumer Electronics       24

2.11 LEGAL, FINANCIAL, PHYSICAL PUBLISHING, EDUCATION DOCUMENT SERVICES       25

2.12 SUMMARY        27

3. Global Express and Small Parcels Market Size & Growth 2021   28

3.1 MARKET SIZE & GROWTH        28

3.1.1 Asia Pacific    34

3.1.2 North America          38

3.1.3 Europe 43

3.1.4 Middle East and North Africa       47

3.1.5 South America           50

3.1.6 Sub-Saharan Africa  53

3.1.7 Russia, Caucasus and Central Asia         55

3.2 PARCEL MARKET PRICING AND YIELD          58

 

3.2.1 Race to the bottom in Chinese parcel prices continues         58

3.2.2 A comparison of parcel yields in the US and Germany           59

3.2.2.1 United States         59

3.2.2.2 Germany      61

3.2.2.3 Lessons for other markets         62

3.2.3 Lower prices, higher profits          62

4 Express Provider Profiles          64

4.1 ASIA PACIFIC      64

4.1.1 China’s express market      64

4.1.2 Chinese Provider Comparisons     64

4.1.3 Competitive landscape       65

4.1.4 Price war damaging profits           65

4.1.5 Alibaba and Chinese Express Providers 67

4.1.6 ZTO Express   67

4.1.7 Yunda Express           70

4.1.8 YTO Express   71

4.1.9 STO EXPRESS  72

4.1.10 Asia Pacific Ex-China Providers  74

4.1.11 SingPost       77

4.1.12 Japan Post    78

4.1.13 CJ Logistics  80

4.2 EUROPE  83

4.2.1 Europe comparisons           86

4.2.2 DPD      87

4.2.3 Hermes            89

4.2.4 GLS       91

4.3 NORTH AMERICA REGIONAL COMPARISON           95

4.3.1 A look at 2020            97

4.3.2 H1-2021           98

4.3.3 USPS    100

4.3.4 FedEx   102

4.3.5 UPS       104

4.3.6 Amazon gaining a foothold in the North American express market            105

4.4 INTEGRATORS – COMPARATIVE REVIEW OF 2020  106

4.4.1 DHL      106

4.4.2 UPS       106

4.4.3 FedEx   107

4.4.4 International Express Provider Comparisons   108

4.4.5 EBIT Margin comparisons  109

4.4.6 Volume Growth Comparison         110

4.4.7 Integrator – 2021 Performance    111

4.4.8 Volume comparison 113

4.4.9 Revenue per piece    116

4.4.10 Vertical sector boosting e-commerce volumes          116

4.4.11 Healthcare and pharmaceutical            117

4.4.12 High tech      118

4.4.13 Automotive  119

ABOUT TI       120

LICENCE AND COPYRIGHT 121

Express and Parcels market to grow by 10.4% in 2021, but growth is slowing from the highs seen during the height of the pandemic

7th December, 2021, Bath, UK – Ti’s new Global Express & Small Parcels 2021 report shows that the market has seen high growth rates in 2021, with y-o-y growth of 16.4% in the first half of 2021 and total 2021 growth projected to be 10.4% y-o-y. As growth in the second half of the year slows back to pre-pandemic levels, the express market is moving into a new phase as it adjusts to the post-pandemic new normal.

  • Ti projects the global express market will grow by 10.4% in 2021 and will grow at a CAGR of 7.7% from 2020 to 2025.
  • The global domestic express market is projected to grow by 9.9% in 2021, with growth forecasted at a 2020-2025 CAGR of 7.4%.
  • On a global level, the international express market is forecasted to grow by 10.0% in 2021, with growth forecasted at a CAGR of 7.9% from 2020-2025.

The express market’s growth throughout 2020 and 2021 has been characterised by surging B2C volumes and greater use by shippers seeking to manage and mitigate supply chain disruptions caused by the pandemic. However, the gradual re-opening of societies, worldwide supply chain challenges, and rising inflation rates affecting the prices of goods and purchasing power have led express growth to slow in the second half of 2021.

Over the forecast period the express market is set to see more moderate growth at a CAGR of 7.7% from 2020 to 2025, a growth rate more similar to the rates seen prior to the Covid-19 pandemic. However, the market is unlikely to return to pre-Covid norms in any other sense.

High levels of demand from e-commerce are expected to continue out to 2025, although the surge in growth from lockdown led demand for home delivery will ease. The B2B segment of the market is also expected to drive growth, but demand patterns are changing within this segment. The changes in the B2B express sector are largely driven by shifting inventory policies to mitigate supply chain risks, the transition from ‘just-in-time’ to ‘just-in-case’. However, another major driver of change is B2B buying habits becoming more similar to B2C. This is breaking down the distinction between B2B and B2C volumes, as B2B express shipments are increasingly comprised of more frequent consignments of smaller sizes, like their B2C counterparts. As the market continues to develop out to 2025 the distinction between B2B and B2C volumes is expected to fade further, with the exception of higher value per shipment sectors, such as aerospace or pharmaceuticals.

As well as assessing the growth and major changes likely to affect the express market in the future, the report also examines new opportunities for the sector like on-demand delivery. Ti’s experts assess the development of the on-demand sector, how addressable the volumes within it are for express providers and how profitable the market will be for the players already active within it. The report shows that market conditions are likely to become increasingly challenging for on-demand providers, as high demand from consumers in lockdowns is unlikely to be present beyond 2022.

To be economically viable as volumes stagnate or even decline, on-demand companies need to increase efficiency, delivery network density, ‘shopping basket’ value and commission. It is likely that some market consolidation will be required to ensure sufficient network and drop density. Ken Lyon, an Advisory Board Member and Technology Specialist for Ti, said: “I think if a new player enters the market, exploiting technology (e.g. Electric bikes, very smart tech that can optimise the cost base) or an existing player upgrades to the same, that may create new distributed operating models that can survive”.

This report is perfect for

  • Global manufacturers
  • Banks and financial institutions
  • Supply chain managers and directors
  • Logistics procurement managers
  • Marketing managers
  • Knowledge managers
  • Investors
  • All C-level executives

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