Courier and Express Delivery (Industrial Report) - UK - March 2014
“While growth in new market entrants and the Royal Mail privatisation are expected to increase industry competition to a new intensity, the forecast for further expansion in online retail sales will ensure business-to-consumer demand grows in the short-term. Reliable and accessible customer-facing systems, combined with flexible delivery processes, are anticipated to be key to success in this sector of the market, while reducing the level of household deliveries in favour of collection points is key to improving express delivery margins.”
– Ben Harris, Industrial Analyst
This report addresses the following key issues in the market for courier and express delivery:
- To what extent will online retail sales continue to be the engine of growth in the UK courier and express delivery market?
- Will the privatisation of the Royal Mail increase the level of competition in the market and open new opportunities for delivery companies?
- What are the prospects for improving margins in the courier and express delivery industry?
- How important is the international delivery market and how do opportunities for growth in this sector compare with those in the internal market?
- How can the business model for an express delivery firm adapt to reduce the costs of missed deliveries?
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 those to both households and to 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 commonly undertaken through distribution on pedal bikes, motorbikes or small vans.
The term UK market is used to describe turnover derived from the UK, and the market is segmented within the report to internal (within the UK), and international (packages originating in the UK but destined for delivery internationally). In order for the distribution to be included in the UK market assessment, the consignment has to originate in the UK.
Other forms of segmentation of the internal market undertaken in this report identify separate time specific deliveries. The definitions of these types of services are as follows:
Same-day delivery represents a relatively small element of the total market. Most express delivery carriers operate a same day service, but this is generally contracted out to couriers rather than undertaken by carrier fleets.
Next day is defined as a guaranteed delivery of a consignment within 24 hours. This is often conducted as an overnight service, and frequently now involves a further refinement attached, such as delivery within a specified time window.
Guaranteed time covers other time specific guaranteed deliveries in excess of 24 hours. Within the UK internal market this typically comprises either a two day or three day delivery service, whilst internationally, the timescales can vary far more significantly. For international deliveries, timescales are not only dependent upon travel times and freight schedules, but also upon the infrastructure available in the country of destination.
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