The parcels market has seen significant changes in the past few years; with DX buying Nightfreight to form DX Freight in 2012, City Link going bust in December 2014, DHL buying UK Mail in December 2016, FedEx buying TNT and in the process of integrating the network, and UPS acquiring Nightline Group (Ireland’s largest parcel Carrier) during the summer of this year.

Domestic shipments account for 82% of parcel volume, whereas international inbound shipments and international outbound shipments account for the remaining 18% of parcel volume.*

The explosion of ecommerce in the business to consumer (B2C) sector has led to innovation in services and IT solutions e.g. Click and Collect, which has led to good opportunities for online retailers to offer a more convenient shopping experience and a reduction to the numbers in “basket abandonment”. You can read more about this in our next Marketing Intelligence edition.

DPD are the market leader in terms of offering and technology. The pioneers of the “1 hour delivery” window, and “follow my parcel” software, boasting a 98.5+% delivery on time, they command a premium price.

This year maybe the start of a new era in terms of service delivery performance for Yodel. Up to now it has matched the likes of DPD but let’s see how they cope with “peak”. Their price point is lower than DPD.

UK Mail, acquired by DHL in December 2016 and have benefitted from the UK volumes DHL used to put through Parcelforce (some 60,000 parcels per night). They are profitable and have ok service levels but not as good as DPD and Yodel (this year). Their price point is typically lower than DPD.

FedEx / TNT, within the next 6-12 months the TNT brand will disappear. TNT continues to recover from their cyber-attack in the summer. They had some service level issues but are returning to their previously high standards. Both TNT and FedEx command a premium price.

Hermes serves the B2C market and delivers some 300,000,000 parcels per annum. Innovations have led to the introduction of “ETA” which is a 4-hour delivery window given directly to the recipient.

Since being acquired by Connect Group some 3 years ago, Tuffnells are a strong provider servicing the “out of gauge” marketplace well. Customers should enjoy 97+% on time.

Aspray24 is a family-run business offering good levels of service. There are no real size restrictions however they can be very choosy what freight they will carry. Service typically is 97+%.

DX Group offers a diverse service offering covering business mail, parcels and freight. Service levels are typically in the low to mid-90s in terms of percentage on time, and they have issued profit warnings in the last 12 months.

Parcelforce have been aggressive in the market since losing the DHL volume. Typically, with strong service levels they are a quality provider.

UPS offer a consistent service domestically, they have traditionally been a B2B carrier but have seen an increase in B2C shipments.

*Courtesy of Courier News “UK parcel market prepares for delivery boom”

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Article by Charles Reid