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Courier and Express Delivery - UK - March 2015

“With the economic inefficiency of home delivery stretching margins for industry operators, there is a need to sway retail customers away from automatically selecting home delivery. But which alternative is most likely to do this?”
– Ben Harris, B2B Analyst

This report answers the following key questions:

  • What systems investment should operators prioritise in an increasingly competitive market?
  • How can delivery firms actively develop SME business?
  • What alternative pick-up locations can tempt retail consumers away from choosing home delivery?


For the purposes of this report, the terminology of courier and express delivery is defined as delivery of documents and parcels up to a maximum of 50kg, including to both households and businesses, thereby excluding pallet and freight delivery.

Express delivery 
typically involves a time specific constraint, traditionally on a 24-hour, 48-hour or 72-hour basis. However, with growing demand from online retailers, the target is increasingly based on a particular window of time that the customer chooses.

Courier delivery primarily involves same-day deliveries at very short notice over small distances, and is commonly undertaken through distribution on pedal bikes, motorbikes or small vans.

With parcel volumes expected to continue rising sharply in the coming years, it is crucial that operators expand capacity to process packages in greater numbers. Investment in networks and infrastructure will be key to ensuring firms are able to deliver consistently for both business and retail customers. The development of the B2B market across 2015 will be affected by business confidence in the second half of the year, with the upcoming election pivotal to this. It is expected that B2C parcel volumes will continue to grow, though the rate of growth will slow as the UK e-commerce market matures further.

 

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Table of contents

  1. Executive Summary

      • The market
        • B2C delivery volumes continue to provide engine for market growth
          • Figure 1: UK market for courier and express delivery services, 2010-14
        • UK economic recovery boosts internal market
          • Figure 2: Segmentation of the UK market for courier and express delivery services, by destination, 2010-14
        • Growth rate to slow but rising volumes will necessitate greater capacity
          • Figure 3: Forecast UK market for courier and express delivery services, 2015-19
        • Market factors
          • Operators battling to exploit anticipated export growth
            • Figure 4: Growth in UK export volumes, 2013-14
          • Online retail sales continue to accelerate
            • Figure 5: Growth in UK online retail sales volumes, 2014
          • The consumer
            • Urban population more likely to select faster parcel delivery
              • Figure 6: Delivery timing for consumers that have received a parcel via courier or express delivery services, by residential area, December 2014
            • Cost remains king for consumers
              • Figure 7: Consumer attitudes towards courier and express delivery, December 2014
            • Companies
              • DX Group targets long-term integration strategy
                • UK Mail targeting service level as a differentiator
                  • What we think
                  • Introduction

                    • Definitions
                      • Methodology
                        • Abbreviations
                          • Market positioning
                            • The supplier
                              • The customer
                              • Key Insights

                                  • What systems investment should operators prioritise in an increasingly competitive market?
                                    • How can delivery firms actively develop SME business?
                                      • What alternative pick-up locations can tempt retail consumers away from choosing home delivery?
                                      • UK Economy

                                        • Overview
                                          • Business investment
                                            • Interest rates
                                              • Inflation
                                                • Consumer spending
                                                  • Imports
                                                    • Exports
                                                    • Market Factors

                                                      • Key points
                                                        • Service sector growth driving B2B delivery demand
                                                          • Figure 8: UK GDP growth, 2012-14
                                                        • Operators battling to exploit anticipated export growth
                                                          • Figure 9: Growth in UK export volumes, 2013-14
                                                        • Online retail sales continue to accelerate
                                                          • Figure 10: Growth in UK online retail sales volumes, 2014
                                                        • Confidence among middle-to-high income households behind premium service demand
                                                          • Figure 11: UK financial confidence index, 2014-15
                                                        • Temporary easing of fuel costs provides light relief
                                                          • Figure 12: Average annual retail prices of petrol in the UK, 2010-14
                                                      • Market Size

                                                        • Key points
                                                          • B2C delivery volumes act as continued engine for growth
                                                              • Figure 13: UK market for courier and express delivery services, 2010-14
                                                          • Market Segmentation

                                                            • Key points
                                                              • UK economic recovery boosts internal market
                                                                • Figure 14: Segmentation of the UK market for courier and express delivery services, by destination, 2010-14
                                                                • Figure 15: Segmentation of the UK market for courier and express delivery services, by destination, 2010-14
                                                              • Novelty of same-day retail delivery fuels demand for faster services
                                                                • Figure 16: Segmentation of the internal courier and express delivery market, by time sensitivity, 2010-14
                                                                • Figure 17: Volume segmentation of the internal courier and express delivery market, by time sensitivity, 2010-14
                                                            • Market Trends

                                                              • Key points
                                                                • Prices see marginal gain over past year
                                                                  • Figure 18: UK postal and courier services price index, 2012-14
                                                                • B2C consumers given control, while SME services expand
                                                                  • Delivery options for household consumers are widening...
                                                                    • ...while investment in back-end technology increases
                                                                      • Carriers looking to expand SME services
                                                                      • Delivery Experience

                                                                        • Key points
                                                                          • E-commerce expanding consumer experience of courier and express delivery
                                                                            • Figure 19: Experience of courier or express delivery services, December 2014
                                                                            • Figure 20: Experience of courier or express delivery services, by age group, December 2014
                                                                        • Last Parcel Delivery – Location and Speed

                                                                          • Key points
                                                                            • Home is where the parcel is
                                                                              • Figure 21: Delivery location for consumers that have received a parcel via courier or express delivery, December 2014
                                                                            • Younger males and urban residents favour quicker deliveries
                                                                              • Figure 22: Delivery timing for consumers that have received a parcel via courier or express delivery services, December 2014
                                                                              • Figure 23: Delivery timing for consumers that have received a parcel via courier or express delivery services, by residential area, December 2014
                                                                              • Figure 24: Delivery timing for consumers that have received a parcel via courier or express delivery services, by age group, December 2014
                                                                          • Attitudes to Delivery

                                                                            • Key points
                                                                              • Cost is king when selecting delivery type...
                                                                                • Figure 25: Consumer attitudes towards courier and express delivery, December 2014
                                                                              • ...while willingness to pay extra decreases with age
                                                                                • Figure 26: Willingness to pay more for same-day delivery or a specific delivery time, by age group, December 2014
                                                                              • Store-based pick-ups beat parcel lockers for consumers
                                                                                • Figure 27: Courier and express delivery location preferences, December 2014
                                                                            • How to Improve the Delivery Experience

                                                                              • Key points
                                                                                • Safe place tops improvements wish list
                                                                                  • Figure 28: What would improve your delivery experience? December 2014
                                                                                • Email alerts and specifying a safe place attract older demographic
                                                                                  • Figure 29: What would improve your delivery experience? By age group, December 2014
                                                                                • Extended delivery options more popular among urban residents
                                                                                  • Figure 30: What would improve your delivery experience? By residential area, December 2014
                                                                              • Industry Structure

                                                                                • Key points
                                                                                  • Industry development
                                                                                    • Insolvency procedures down as trading conditions improve
                                                                                      • Figure 31: Corporate liquidations and insolvency procedures in postal and courier activities sector, 2010-14
                                                                                    • Greater capacity is increasing competition
                                                                                      • Figure 32: Analysis of the changes in the structure of the postal and courier activities sector, 2010-14
                                                                                    • Structure by turnover
                                                                                      • Figure 33: Analysis of the financial structure of the postal and courier activities industry, 2013 and 2014
                                                                                    • Structure by employment
                                                                                      • Figure 34: Analysis of the employment structure of the postal and courier activities industry, 2013 and 2014
                                                                                  • City Sprint

                                                                                      • Strategy
                                                                                        • Recent company activity
                                                                                          • Figure 35: Financial analysis of CitySprint, 2009-13
                                                                                      • DHL Express UK

                                                                                          • Strategy
                                                                                            • Recent company activity
                                                                                              • Figure 36: Financial analysis of DHL Express (UK), 2009-13
                                                                                          • DX Group

                                                                                              • Strategy
                                                                                                • Recent company activity
                                                                                                    • Figure 37: Financial analysis of DX Group, 2010-14
                                                                                                    • Figure 38: Financial segment analysis of DX Group, 2010-14
                                                                                                • Fedex UK

                                                                                                    • Strategy
                                                                                                      • Recent company activity
                                                                                                        • Figure 39: Financial analysis of FedEx UK 2009-13
                                                                                                    • GeoPost UK

                                                                                                        • Strategy
                                                                                                          • Recent company activity
                                                                                                            • Figure 40: Financial analysis of GeoPost UK, 2009-13
                                                                                                        • Hermes Parcelnet

                                                                                                            • Strategy
                                                                                                              • Recent company activity
                                                                                                                • Figure 41: Financial analysis of Hermes Parcelnet, 2010-14
                                                                                                            • TNT UK

                                                                                                                • Strategy
                                                                                                                  • Recent company activity
                                                                                                                    • Figure 42: Financial analysis of TNT UK, 2009-13
                                                                                                                • Tufnells Parcels Express

                                                                                                                    • Strategy
                                                                                                                      • Recent company activity
                                                                                                                        • Figure 43: Financial analysis of Tuffnells Parcels Express, 2009-13
                                                                                                                    • UK Mail

                                                                                                                        • Strategy
                                                                                                                          • Recent company activity
                                                                                                                            • Figure 44: Financial analysis of UK Mail, 2010-14
                                                                                                                            • Figure 45: Financial segment analysis of UK Mail, 2010-14
                                                                                                                        • UPS UK

                                                                                                                            • Strategy
                                                                                                                              • Recent company activity
                                                                                                                                • Figure 46: Financial analysis of UPS, 2009-13
                                                                                                                            • Yodel

                                                                                                                                • Strategy
                                                                                                                                  • Recent company activity
                                                                                                                                    • Figure 47: Financial analysis of Yodel, 2009-13
                                                                                                                                • Forecast

                                                                                                                                  • Key points
                                                                                                                                    • Maturing e-commerce market will slow parcel growth rate
                                                                                                                                      • Figure 48: Forecast UK market for courier and express delivery services, 2015-19
                                                                                                                                    • Internal market to outperform international to 2019
                                                                                                                                      • Figure 49: Forecast segmentation of UK market for courier and express delivery services, 2015-19
                                                                                                                                  • Further Sources and Contacts

                                                                                                                                    • Trade associations
                                                                                                                                      • Association of International Courier & Express Services
                                                                                                                                        • Trade magazines
                                                                                                                                          • Courier Direct
                                                                                                                                            • Post and Parcel
                                                                                                                                              • Transport News

                                                                                                                                              Companies Covered

                                                                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                                                                              Courier and Express Delivery - UK - March 2015

                                                                                                                                              US $1,984.91 (Excl.Tax)