The European express market is set to grow about 4% a year from 2017 to 2021, driven by specialist B2B services, e-commerce and same-day delivery, according to a new report by market researchers Technavio.
This would amount to US$9.8 billion of incremental growth, expanding the European express market from $49.5 billion in 2016 to $59.25 billion in 2021, it said.
Despite the rapid growth of B2C deliveries in recent years, B2B shipments still accounted for close to 76% of the market in 2016, Technavio said in a press release.
Technavio said that the three key market drivers in Europe are growing demand for express delivery services in medical and emergency healthcare sectors; e-commerce growth; and rising demand for same-day delivery services.
On e-commerce, the report noted that the sector has been growing annually at 11.5% in Europe since 2015, with over 55% of the revenue generated in Western European countries, including Germany, France, Italy, and Spain.
“E-commerce customers seek fast delivery services and reduced delivery costs. This has resulted in express delivery service companies in Europe adopting new methods to improvise their resource planning and last mile operations and ensure that customers get their parcels within the stipulated time,” the report’s authors wrote.
“Express delivery companies are adopting innovative approaches and implementing advanced technologies, to improve efficiency and increase delivery rates. The innovations include optimization techniques, visibility, and improved customer communication,” commented Sharan Raj, a lead analyst at Technavio for transportation and distribution research.
Explaining the growing demand for express delivery services in medical and emergency healthcare sectors, Technavio said that express delivery services for medical emergencies and urgent transportation of samples and specimens are vital for any hospital, medical clinic, or testing lab. Quick transportation between hospitals, medical clinics, and healthcare facilities is “essential”.
Vendors in the European market are focusing on improving the delivery time of medical emergency products and samples by implementing route optimization tools to keep track of the delivery and to ensure timely delivery of the products. Failing to do so will result in the deterioration of samples and specimens, which can ultimately lead to imprecise results.
“Express delivery companies like FedEx offer a wide range of specialty packaging for healthcare products during transportation, which includes safe compressor containers, thermal blankets, dry ice containers, and deep frozen solutions,” Raj noted.
On the growing demand for same-day delivery services in Europe, Technavio pointed out that many parcel and logistics companies such as Deutsche Post DHL, FedEx, UPS and DPD have started such operations in recent years, and now offer delivery within 24 hours of purchase or within a selected same-day timeframe.
“Over 45% of consumers in the Western European countries that include Germany, France, the UK and Sweden are willing to pay an additional amount as delivery charges for same day delivery services,” the report claimed.
In addition to the convenience of the online consumers, the retailers who implement same-day delivery benefit from these services, as it helps improve their market position with respect to brick and mortar retailers and other online retail competitors.
One of the latest trends gaining traction in this market is the implementation of IT-enabled technology in express delivery services, according to the report. An increasing number of express delivery service providers are implementing IT-enabled services, such as GPS tracking, online tracking, communication services, automatic updating of records, 2-D barcoding, and real-time tracking to provide hassle-free services to the customers. The adoption of these IT-enable services has made business processes faster and more accurate than manual processes. As a result, it increases profitability for the express delivery service providers.
Also, the adoption of cloud computing technologies among vendors has increased over time. Cloud technology allows consumers to access data with respect to the delivery of the parcel from any location. Rapid advancements in technology and high rate of adoption of these technologies will propel the growth of the express delivery market in Europe in the coming years, the researchers predicted.
Technavio is a leading global technology research and advisory company which publishes more than 2,000 research reports per year.
