[051118.EN.BIZ] E-commerce Fuels Record Growth in Express Delivery: Ti Report

CROSS-BORDER e-commerce propelled international express growth by a record 8.1 per cent in 2018, according to a new study by UK's Transport Intelligence (Ti).

The global express and small parcels market is forecast to expand by 8.6 per cent this year, following on from 9.7 per cent growth in 2017.

The research also showed that the development of the market is evenly split, with both domestic and international markets anticipated to grow at roughly the same rate in 2018 of 8.7 per cent and 8.1 per cent respectively.

"The market is not only benefiting from a strong economic environment which is driving B2B volumes but from the continued expansion of e-commerce, seen in high B2C growth rates," the authors of the report observed.

"This has provided many carriers, not least the global integrators, with the headache of how to adapt their networks, pricing and operations to e-commerce volumes both domestically and, increasingly, internationally."

Ti expects the global express and small parcels market will see a real compound annual growth rate (CAGR) of 8.2 per cent between 2017 and 2022, with the domestic market growing at 8.6 per cent and the international market growing at a rate of 6.2 per cent.

"The global express and small parcels market continues to be disrupted by e-commerce with new demands from consumers shifting the operations of all the major express providers," the report highlighted.

Ti commercial development head Michael Clover noted that over the past several years, a trend has emerged for much quicker growth in the domestic express and small parcel markets when compared with international markets.

"Over 2017 the gap in growth rates has narrowed, with notably strong international market growth in Asia Pacific and North America, as well as in Europe where the international market grew at a faster rate than domestic for the first time since 2010," said Mr Clover.

"Cross-border e-commerce is growing extremely quickly and international express providers are seeing big opportunities fill the demand it's generating," said Ti research head Nick Bailey. "To make the most of the opportunity, significant scale and investment in infrastructure will be required, even by today's biggest players.

"We are undoubtedly entering into a period of transformation in the cross-border e-commerce market, not only for express providers like DHL, UPS and FedEx but for online retail giants like Amazon, Alibaba and JD.com among others, all of whom have aggressive international expansion plans," said Mr Bailey.

The express and small parcels market continues to see change beyond e-commerce, too. "It is clear that the pharmaceuticals, life sciences and healthcare sector is of growing importance for the express sector as a whole," the report noted.

"Express providers see opportunities to make better returns due to the more complex handling, regulatory and operational sophistication of the sector and a changing demographic which will lead to market growth for many years to come."

Source : HKSG.