Modern forces are reshaping the landscape of the express parcels market, requiring from industry players innovation and creativity in order to adjust to rising challenges and grab emerging opportunities in the new world order, according to a new report.
Transport Intelligence’s (Ti) latest paper “Global Express and Small Parcels 2015” says fundamental changes are revolutionizing the express parcels sector, triggered by three key catalysts—e-retailing, technological disruption, and macroeconomic upheaval.
E-retail has come to more prominence in 2015, according to the report’s authors. This has led to more sophisticated delivery strategies that 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,” said the report.
In addition, 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.
But the massive growth of e-retail volumes, particularly strong in Asia-Pacific where the express market grew by nearly 16% in 2014, has not necessarily brought profit to 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, technological disruption is causing competition to arise 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,” said Ti.
“However, these start-ups are not an imminent threat to national or international networks, due to their greater levels of efficiency,” it added. “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 utilize assets in niche sectors or geographies.
As for macroeconomic upheaval, the biggest shake up will be caused by the likely acquisition of TNT by FedEx, reducing the number of large global express players from four to three.”
John Manners-Bell, Ti’s CEO, commenting on the findings of the report, said, “E-retail, new business models, disruptive technologies and the volatile global economic environment are transforming the express parcels industry. The future is overwhelmingly positive—but only for those companies which work out how to take advantage of this systemic change.”
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