The European express and parcels delivery market is likely to see continued low growth in the next few years, along with further consolidation and e-commerce remaining as the key growth driver, according to two recent reports.
The overall European parcels market grew to exceed €50 billion in 2014, according to the ‘European Parcels Market Insight Report 2015’ from UK-based Apex Insight. The parcels market continued to grow in most countries in spite of the uncertain recovery from recession, it found.
Growth has been fastest in Poland – where a fast-growing economy has adopted modern logistics practices – and the UK, which has led the way in online shopping with average spend per head over €2,600 in 2014. But it has been slowest in the more challenged economies of Southern Europe as those economies struggle to recover from the eurozone crisis, according to the report.
A key factor has been the growth of home shopping, which grew by over 15% to approach €400bn in 2014, driving strong growth in B2C volumes. This has acted as a spur to innovation – in promoting the development of processes to improve the delivery experience, from defined time-slots, to text messages to the further roll-out and establishment of new chains of parcel shops. In contrast, there has been a more mixed performance in B2B volumes, Apex noted.
Author Frank Proud said: “The most exciting developments in the European parcels market in the last year have been the move by FedEx to acquire TNT, combining its global and financial strength with TNT’s European market position, and the moves by Amazon, Europe’s leading parcel shipper, into taking a more active role in deliveries. The first will firmly move FedEx into the group of leading European-wide carriers, alongside Deutsche Post DHL, La Poste / DPD, Royal Mail / GLS and UPS, while the second is a potential threat to all carriers, in particular those for whom Amazon’s volumes have become critical to the viability of their networks.”
Looking ahead, the report predicted continued growth based on expectations of a more positive economic outlook than in the recent past as well as continued growth in home shopping. The UK and Poland are expected to continue to be the fastest-growing markets while the outlook for Italy and Spain has improved significantly since last year.
“Our model suggests that consumer deliveries are likely to account for over a third of the overall market by 2019 and potentially a majority of deliveries in some countries. Nevertheless, we believe there are risks to market growth, such as faltering of the weak economic recovery, the development of different channels for internet retail fulfilment should parcel carriers not deliver the right last-mile experience and even, for certain products, 3D printing,” the research company said.
In terms of competitive trends, Proud commented: “We expect to see a steady increase in market consolidation as the leading operators fill remaining geographical and capability gaps in their networks. Independent players who are not part of an international partnership may find that they face increasing challenges in retaining / winning customers.”
Meanwhile, the European express market is forecast to grow by 3.3% per year up to 2019, market researchers Technavio predicted in their ‘Express Delivery Market in Europe’ report. The report, based on industry input and expert analysis, covered the four leading express operators as well as smaller express firms.
The European growth forecast is similar to the global growth forecast of 3.4% for 2014-19 that Technavio made in a global market report published last November. In contrast, the US courier and local delivery market is expected to grow by 4.8% over the same period, while the dynamic Chinese express market could surge by 27% a year, according to reports that it published in December 2014 and January 2015 respectively.
