The European courier, express and parcels (CEP) market generated stable growth of 4 per cent lastyear, with international and B2C shipments as the main growth drivers, and similar trends are
likely over the next few years, according to a new study by consultants A.T. Kearney.The sector’s revenues increased by 4 per cent to €47.2 billion in 2011 while volumes were 6per cent higher at 5.6 billion shipments, the survey by the company’s German-based transportationunit found. The revenue growth rate was the same as in 2010, signifying stable growth last year.
International business outgrew the domestic sector. International revenues increased by 6 percent while volumes were 8 per cent higher. In comparison, domestic revenues grew just 3 per centwith volumes up by 6 per cent.
These figures imply lower average prices, largely due to downtrading from express to standardparcels and stronger growth for B2C parcels compared to B2B. The average weight of shipments alsoremained stable.
“Growth drivers were mostly weaker-margin areas such as B2C and the standard (parcels)segment. Moreover, overall growth is primarily driven by international shipments, which usuallyhave higher revenue per shipments,” commented Ferdinand Salehi, partner at A.T. Kearney and head ofthe transportation consulting area.
Customers are increasingly trying to optimise their spending on CEP services, especially byusing lower-price standard parcel delivery rather than higher-cost express more often thanpreviously, the consultants noted.
“The CEP market is adapting to these needs and is offering an improved service for standardparcels, which as a result leads to stronger growth in comparison to the express segment,”explained A.T. Kearney manager and study co-author Lars Ryssel.
This trend meant that the average price per shipment dropped in all markets apart fromRussia, which was benefiting from stronger demand, higher average prices and faster growth forinternational shipments.
In terms of competition, A.T. Kearney said that the “major networks” were outgrowing theoverall market and increasing their market shares. The six big networks (Deutsche Post DHL, FedEx,DPD, GLS, TNT and UPS) now cover 91 per cent of the market for international express shipments,according to the study authors. “It can be expected that this trend will continue and could impacton price developments in the medium- and long-term,” Ryssel commented.
He also highlighted the expansion of several players in the domestic and international B2Cmarkets as well as the increasing complexity of this sector due to the rise in return shipments,especially of textiles and clothes.
Looking ahead, Salehi predicted: “We expect the most significant (growth) development withstandard parcels in the international CEP markets. We estimate annual volume growth in theinternational standard (parcels) segment at 7 per cent until 2014.” The consultants predict 5 percent annual growth for domestic markets.
Emerging markets such as Poland, Russia and the Czech Republic will continue to show thestrongest growth rates while Germany will have the highest growth in absolute terms, they believe.
However, pricing will be the “biggest challenge” for all players in the future after years offalling average prices, they warn. “Particularly decisive here could be developments such as theplanned merger between UPS and TNT,” Salehi commented.
The A.T. Kearney study is based on more than 500 interviews with top managers and experts aswell as research covering 16 European countries.
