Fulfillment/Logistics Trends
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Express Delivery under Pressure to Add More Value as Parcel Service Closes the Gap
Europe's delivery business seen continuing accelerated growth as business-to-consumer traffic, international demand ramp up, Datamonitor says
London — October 31, 2007 — Europe's parcel and express delivery business is expected to continue to grow at a higher rate than in previous years due to an increase in business-to-consumer (B2C) traffic and strong international demand, according to new research by market analyst Datamonitor.
However, the research, "European Express Market Map 2008," which covers 12 major European markets, says that although currently exhibiting a higher growth rate than parcel services, express services are going to have to demonstrate extra value as customer demand is shifting to using cheaper yet reliable parcel services in key growth areas of international and business-to-consumer (B2C) delivery services.
"Over the next five years, the B2C and C2C (consumer-to-consumer) sectors will experience faster growth than B2B (business-to-business), due to increased e-commerce activity, especially in less mature home delivery markets such as Italy and Spain," said Erik van Baaren, Datamonitor express analyst and author of the study.
International services are also growing at a higher rate primarily due to the enlargement of the European Union and the trend to centralize operations to fewer countries and outsource manufacturing to low-cost countries, according to van Baaren.
50 Billion Euros by 2012
The parcel delivery segment includes non-day definite and non-time definite products, such as "deferred," "standard" and/or postal parcel deliveries. The express delivery service category includes traditionally high-value services such as same day delivery (or urgent), next day delivery and time definite products.
Datamonitor expects the European express and parcels delivery market to grow by a 4 percent compound annual growth rate on 2006 levels to reach a total value of nearly 50 billion euros ($72.2) by 2012. The report analyzes the express and parcels market by destination and shows that although the "domestic" segment still accounts for the majority of value and volume, international volumes are showing the highest growth rate.
"The logistical trend to centralize warehousing and distribution facilities and relocation of manufacturing bases to Eastern Europe is driving the growth in international volumes," said van Baaren. "This has led to companies employing lower stock levels and having to rely on longer and leaner supply chains to serve their customers and to require fast, reliable delivery services."
However, the research, "European Express Market Map 2008," which covers 12 major European markets, says that although currently exhibiting a higher growth rate than parcel services, express services are going to have to demonstrate extra value as customer demand is shifting to using cheaper yet reliable parcel services in key growth areas of international and business-to-consumer (B2C) delivery services.
"Over the next five years, the B2C and C2C (consumer-to-consumer) sectors will experience faster growth than B2B (business-to-business), due to increased e-commerce activity, especially in less mature home delivery markets such as Italy and Spain," said Erik van Baaren, Datamonitor express analyst and author of the study.
International services are also growing at a higher rate primarily due to the enlargement of the European Union and the trend to centralize operations to fewer countries and outsource manufacturing to low-cost countries, according to van Baaren.
50 Billion Euros by 2012
The parcel delivery segment includes non-day definite and non-time definite products, such as "deferred," "standard" and/or postal parcel deliveries. The express delivery service category includes traditionally high-value services such as same day delivery (or urgent), next day delivery and time definite products.
Datamonitor expects the European express and parcels delivery market to grow by a 4 percent compound annual growth rate on 2006 levels to reach a total value of nearly 50 billion euros ($72.2) by 2012. The report analyzes the express and parcels market by destination and shows that although the "domestic" segment still accounts for the majority of value and volume, international volumes are showing the highest growth rate.
"The logistical trend to centralize warehousing and distribution facilities and relocation of manufacturing bases to Eastern Europe is driving the growth in international volumes," said van Baaren. "This has led to companies employing lower stock levels and having to rely on longer and leaner supply chains to serve their customers and to require fast, reliable delivery services."
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