This is the conclusion of Transport Intelligence's latest report, Global Express and Small Parcels 2015, which includes in-depth analysis of the market trends and how express parcels carriers are responding to them.
According to the report's authors, the massive growth of e-retail volumes has characterized the industry in 2015. Online retail has led to more sophisticated delivery strategies, which better take into account the requirements of the final recipient. Home deliveries are costly and inefficient and hence express carriers have been developing more flexible solutions which allow the recipient to choose the time and location of delivery.
As well as this, alternative delivery locations are being developed. This includes smart lockers which can now be found at car parks, petrol stations, railway stations and supermarkets; locations which are designed to make it more convenient for recipients to collect (and return) their parcel.
The growth, particularly strong in Asia Pacific (where the express market grew by nearly 16 percent in 2014) has not necessarily resulted in profitability for express players, especially those exposed to the domestic market. Even the largest carriers, such as UPS, have struggled to find a solution to deal with the surge in demand at peak times of year, including the so-called Black Friday.
In addition to this, competition is also arising from unlikely sources. Many disruptive technology companies, such as Uber and Nimbr, have become massive businesses and the possibility that one will emerge in the logistics industry should never be ruled out.
However, these start-ups are not an imminent threat to national or international networks, due to their greater levels of efficiency. They are also largely aimed at consumer markets, rather than B2B. They could even become a useful tool for many incumbent express companies to better utilise assets in niche sectors or geographies.
The changes in the market are not all driven by changing patterns of consumer demand. The biggest shakeup will be caused by the likely acquisition of TNT, by FedEx, reducing the number of large, global express players from four to three.
Source: Transport Intelligence
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