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Follow on Google News | New Research Reveals Challenges Facing UK Parcels CarriersNew research into the outlook for the UK express parcels industry has been released which identifies market challenges and offers an insight into the potential for future growth.
By: Apex Insight Frank Proud, director of Apex Insight, says: “Like many UK industries, the express parcels sector is potentially facing ever bigger challenges. Research based on a realistic market forecast will prove vital to many carriers who need to plan effectively in an environment where the past may not be the best guide to the future.” The report shows that although the parcels industry, now valued at around £7bn, showed a return to profit in 2010, it once again experienced an overall loss in 2011 with carriers placing increasing dependence on home delivery to offset the decline in business parcel volumes since 2008. With intense price competition and low levels of customer loyalty, many carriers have responded by attempting to cut costs through reduced staffing levels. UK online shopping sales in the first six months of 2012 were almost 18% up on 2011 levels, suggesting total sales for this year will approach £30bn. But, unfortunately, Apex Insight does not foresee relief on the horizon for the B2B segment, with 2012 GDP growth forecasts being slashed, the intensifying Eurozone crisis and the impact of government austerity policies meaning the B2B segment has decreased from two thirds of market value a few years ago, to just 57% today, while the average revenue per parcel is 10% below 2007-08 levels. UK manufacturing continues to suffer in the face of global competition; Given these market conditions, it is likely that B2B carriers including UPS, DHL, UKMail, City Link and GeoPost will increasingly concentrate on developing services which will provide added value and customer satisfaction to home shopping organisations, e-tailers and online shoppers, rather than sticking to the higher margin B2B segment. Currently, the biggest complaints among consumers arise from delivery slots which are at best vague and failures which occur in the ‘last mile’ of the delivery. Many retailers now make full use of carriers’ tracking systems to keep customers informed, and there have been some other well received improvements, such as GeoPost’s one hour delivery window, Royal Mail’s ‘Delivery to Neighbour’ initiatives and Packstation- “Although the express parcels industry has been substantially affected by the economic downturn, opportunities certainly remain”, says Proud. “Our research shows that although B2B deliveries are and will remain the largest segment; the consumer delivery segment, which has very different needs, is where the growth is. Traditional carriers must focus on the specific needs of home delivery. We expect to see continued innovations in service as carriers embrace these challenges and adapt their strategies, operations and marketing to make sure they share in the growth segment while retaining a viable premium B2B model”. The full market report: “UK Express Parcels, Market Insight” is available at http://www.apex- Notes for editors Apex Insight is an independent provider of research, analysis and advice covering business services markets in the UK and Europe. It supports managers, investors and advisers in making better business decisions. Clients include UPS, FedEx, DHL, GeoPost and UKMail End
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