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Express and Parcels Industry Set to Undergo Drastic Transition - Datamonitor
Globalization, deregulation, M&A and booming e-commerce working to transform industry, analyst firm reports
London — April 4, 2007 — The European express and parcels industry is set to undergo drastic transition as globalization, deregulation of the postal sector, the wave of mergers and alliances, and booming trade and e-commerce work to transform the industry, according to a report just published by independent market analyst Datamonitor.
In its report, "Five Factors That Will Shape Future of Express Industry," Datamonitor projects that the express industry in nine European Union countries (the "EU 9" — Germany, France, UK, Spain, Italy, Belgium, Netherlands, Sweden and Poland) will grow at a compound annual growth rate of 4.1 percent to $55.1 billion by 2010 (at current exchange rates).
Global Air's Growing Impact
The air express industry is driven by just-in-time business operations and expanding international trade. Between 2006-2013, Datamonitor expects the value of the global air freight market will expand by almost 6 percent annually.
In the past decade, industries such as pharmaceuticals, semiconductors and electronics have shifted their operations to the emerging markets in order to remain operationally competitive. Indeed, the electronic goods production in developing countries has almost doubled since 2001 and accounted for nearly 43 percent of total worldwide manufacturing growth in 2005, according to data from Booz Allen Hamilton.
"Globalization supports the growth of these industries, which consequently promote express services," said Pooja Khazanchi, express analyst with Datamonitor and author of the study. "These products need faster transportation as they are either perishable or high value-low volume items; therefore they continue to dominate the growth in the global express market."
Enhancing Road Services
Khazanchi reports that express operators are now focusing on enhancing road services with improved features and standards. For example, TNT has started investing and developing its road networks in Europe to facilitate its express and parcel business in the region. It has invested more than $18.7 million in expanding and upgrading its facilities at the Duiven hub in Holland.
Elsewhere, DHL relies on its road network for the delivery of its day-definite products and also to provide the targeted capacity for time-definite services. Similarly DPD and GLS have also been expanding their road network coverage in Europe.
In its report, "Five Factors That Will Shape Future of Express Industry," Datamonitor projects that the express industry in nine European Union countries (the "EU 9" — Germany, France, UK, Spain, Italy, Belgium, Netherlands, Sweden and Poland) will grow at a compound annual growth rate of 4.1 percent to $55.1 billion by 2010 (at current exchange rates).
Global Air's Growing Impact
The air express industry is driven by just-in-time business operations and expanding international trade. Between 2006-2013, Datamonitor expects the value of the global air freight market will expand by almost 6 percent annually.
In the past decade, industries such as pharmaceuticals, semiconductors and electronics have shifted their operations to the emerging markets in order to remain operationally competitive. Indeed, the electronic goods production in developing countries has almost doubled since 2001 and accounted for nearly 43 percent of total worldwide manufacturing growth in 2005, according to data from Booz Allen Hamilton.
"Globalization supports the growth of these industries, which consequently promote express services," said Pooja Khazanchi, express analyst with Datamonitor and author of the study. "These products need faster transportation as they are either perishable or high value-low volume items; therefore they continue to dominate the growth in the global express market."
Enhancing Road Services
Khazanchi reports that express operators are now focusing on enhancing road services with improved features and standards. For example, TNT has started investing and developing its road networks in Europe to facilitate its express and parcel business in the region. It has invested more than $18.7 million in expanding and upgrading its facilities at the Duiven hub in Holland.
Elsewhere, DHL relies on its road network for the delivery of its day-definite products and also to provide the targeted capacity for time-definite services. Similarly DPD and GLS have also been expanding their road network coverage in Europe.
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