Research studies predict that the Global Courier, Express and Parcel (CEP) industry will reach over $400B in size in 2024. That represents a compound annual growth rate (CAGR) of 8-10% for the five-year period starting in 2019. CEP delivery firms are experiencing significant revenue growth opportuntities both in developing and developed countries. The growth in ecommerce and the resulting demand for shipping of goods is a lucrative business opportunity.
In October, 2019, at the Parcel Post Expo Conference in Amsterdam, Shawn Winter, CEO of ShipTrack, presented to a group of Universal Postal Union members. The focus of his presentation was on the importance of minimizing organizational change within postal organizations.
Fully-managed cloud technologies:
- incur no support costs
- are easy to learn
- include regular feature enhancements
- typically require little to no capital investments
Over the next two conference days, ShipTrack product experts were kept extremely busy with information and demonstration requests from postal industry executives.
GLOBAL GROWTH OPPORTUNTIES & CHALLENGES
In developing countries several factors are drivers of ecommerce growth:
- increasing international trade
- rising internet availability
- broadening smartphone penetration
- expanding middle class
- growth in disposable income
In the Asia-Pacific governments are focusing on developing the manufacturing sectors and global companies are setting up their manufacturing bases. International trade is rising and is expected to rise rapidly in the future. The retail sector in the region is also growing rapidly. The express delivery market of China, the world’s largest, represents 40% of the total global.
Omni-channel retailing which is the retailer’s ability to combine multiple established sales channels and integrate them efficiently to interact with the customers. One indicator of just how strong the growth in omni-channel retailing really is, is the growth in platforms that support it. The global omnichannel retail commerce platform market is expected to grow from USD 2.99 billion in 2017 to USD 11.01 billion by 2023, at a compound annual growth rate (CAGR) of 21.48%.
One challenge for CEP industry members to capturing and managing the growth is inefficiencies due to the lack of proper infrastructure and technology.
A crucial and costly area of supply chains that represents almost 50% of costs is final mile delivery. As a result, CEP firms are leveraging technology to transform their businesses and integrating last mile delivery into their services. These services are designed to improve the efficiency of logistics operations and crucially, respond to customer expectations.
The growth in international parcel volume is exceeding domestic volumes. The growth in the international parcel volume is driven by cross-border e-commerce growth, which is expected to witness a higher growth rate than the overall e-commerce market.
CROSS-BORDER EXCEEDS DOMESTIC GROWTH
According to DHL, cross-border ecommerce sales growth is twice that of domestic sales. In fact according to the report, between 2016 and 2021, global ecommerce sales growth will be 141%.
B2C shipments across the world are growing in part due to Free Trade Agreements (FTAs), Special Economic Zones (SEZs).
Intense competition from national postal firms, global integrators and smaller, privately owned CEP companies is causing fragmentation especially in rapidly developing countries where CEP players are improving their competitive offerings in order to capture the huge market opportunity. Strategic investments by international players in distribution centers, logistics networks and digital technologies is raising the bar for smaller firms to gain increased footprint in the market.
FOCUS ON LAST MILE DELIVERY SERVICES
According to research by McKinsey & Company:
“The cost of global parcel delivery, excluding pickup, line-haul, and sorting, amounts to about €70 billion, with China, Germany, and the United States accounting for more than 40 percent of the market.”
With the rise of B2C ecommerce, the CEP industry has shifted its focus to the growing importance of satisfying consumer preferences. In fact large ecommerce players are making last mile delivery a key business differentiator. Delivery options and offering tools for consumers to track and manage deliveries all contribute to create a positive customer experience.
Last mile delivery technologies leverage mature tools such as globally-available, cloud-based applications, smartphones and software designed to manage deliveries end-to-end. Cloud-based systems improve a CEP’s business agility. While rasing delivery volumes, cloud solutions can be implemented in a fraction of the time of legacy technologies. These systems ensure consumers receive the best possible experience in part, due to:
- process automation algorithms
- electronic order processing
- intelligent dispatch
- real-time tracking
- barcode scanning
- customer support
One of the ways cloud technologies minimize the impact of change is evident in how quickly they can be deployed as expressed by this customer video.
Improved delivery performance analytics help delivery oranizations to manage last mile delivery costs. Internet-based last mile delivery software solutions facilitate business growth by seamlessly incorporating delivery partners to expand serviceable markets, regionally, nationally or globally.