Express Delivery Services
Description
Companies in this industry provide express delivery and pickup of parcels. Major companies include US-based FedEx and UPS; as well as Aramex (United Arab Emirates); DHL (Germany); and Yamato Transport (Japan).
The express delivery market size was valued at about $320 billion in 2023 and is forecasted to grow at a compound annual growth rate (CAGR) of over 6% between 2024 and 2032, according to the Global Market Insights. North America is the fastest growing market while Asia Pacific is the largest market.
The US express delivery services industry includes about 14,500 establishments (single-location firms and units of multi-location firms) with combined annual revenue of about $90 billion.
COMPETITIVE LANDSCAPE
Demand is driven by business transactions and online consumer spending. The profitability of individual companies depends on price, reliability, quality, and services. Large companies compete by offering a wide range of services. Small companies compete through specialized customer service. The industry is divided into two segments: large networked couriers capable of nationwide and international delivery, and smaller local services that transport packages within a metropolitan area. The courier segment of the US industry is highly concentrated with the top 50 companies accounting for about 95% of the industry's revenue; United Parcel Service (UPS) and Federal Express (FedEx) dominate the market. The local segment, which is much smaller, is fragmented with the top 50 companies accounting for about 45% of the industry revenue.
Barriers to entry into the industry vary. National and international delivery services require heavy capital investments in vehicles, material handling equipment, and other technology. Conversely, barriers are low for local market service providers, which rely primarily on labor.
In addition to other public and private business, express delivery services compete against services offered by government-owned postal operators. China Post, Japan Post, La Poste, and the United States Postal Service (USPS) all offer express service.
PRODUCTS, OPERATIONS & TECHNOLOGY
The express delivery primarily industry transports small parcels handled by a single delivery person without the use of special equipment. This differentiates the segment from the freight shipping industry, which handles high volumes of large cargo and requires heavy, specialized equipment. Express delivery and pickup of parcels may be local, intercity, or international depending on the company's capabilities. The largest companies in the industry, which operate extensive networks that allow door-to-door service, are called integrators.
Transportation and other transportation services relating to small packages account for about 65% of the industry revenue. This is followed by local transportation and delivery of purchased items (less than 5%) and station-to-station transportation of documents and parcels (less than 5%). Other services include international and domestic scheduled transportation of non-perishable boxes as well as local transportation and delivery of purchased or serviced items.
Delivery is typically same-day, next-day, or one-to-three-day. Parcels handled by courier and messenger services are primarily time-sensitive documents and packages or items requiring special handling, such as medical supplies, biologicals (blood and organs), and machine parts. Large express delivery companies may also be involved in non-express ground shipping, freight shipping, and managing customers' inventory and logistics.
Couriers pick up and deliver parcels using a variety of transport equipment including freight trucks, airplanes, and delivery vans. Smaller networked couriers may outsource regional, national, or international deliveries by contracting with freight shipping companies and airlines to transport parcels long distance to other networked couriers, who then deliver locally to final destinations. Messenger services typically transport packages locally by bicycle, scooter, foot, or small delivery vehicle.
The express delivery market size was valued at about $320 billion in 2023 and is forecasted to grow at a compound annual growth rate (CAGR) of over 6% between 2024 and 2032, according to the Global Market Insights. North America is the fastest growing market while Asia Pacific is the largest market.
The US express delivery services industry includes about 14,500 establishments (single-location firms and units of multi-location firms) with combined annual revenue of about $90 billion.
COMPETITIVE LANDSCAPE
Demand is driven by business transactions and online consumer spending. The profitability of individual companies depends on price, reliability, quality, and services. Large companies compete by offering a wide range of services. Small companies compete through specialized customer service. The industry is divided into two segments: large networked couriers capable of nationwide and international delivery, and smaller local services that transport packages within a metropolitan area. The courier segment of the US industry is highly concentrated with the top 50 companies accounting for about 95% of the industry's revenue; United Parcel Service (UPS) and Federal Express (FedEx) dominate the market. The local segment, which is much smaller, is fragmented with the top 50 companies accounting for about 45% of the industry revenue.
Barriers to entry into the industry vary. National and international delivery services require heavy capital investments in vehicles, material handling equipment, and other technology. Conversely, barriers are low for local market service providers, which rely primarily on labor.
In addition to other public and private business, express delivery services compete against services offered by government-owned postal operators. China Post, Japan Post, La Poste, and the United States Postal Service (USPS) all offer express service.
PRODUCTS, OPERATIONS & TECHNOLOGY
The express delivery primarily industry transports small parcels handled by a single delivery person without the use of special equipment. This differentiates the segment from the freight shipping industry, which handles high volumes of large cargo and requires heavy, specialized equipment. Express delivery and pickup of parcels may be local, intercity, or international depending on the company's capabilities. The largest companies in the industry, which operate extensive networks that allow door-to-door service, are called integrators.
Transportation and other transportation services relating to small packages account for about 65% of the industry revenue. This is followed by local transportation and delivery of purchased items (less than 5%) and station-to-station transportation of documents and parcels (less than 5%). Other services include international and domestic scheduled transportation of non-perishable boxes as well as local transportation and delivery of purchased or serviced items.
Delivery is typically same-day, next-day, or one-to-three-day. Parcels handled by courier and messenger services are primarily time-sensitive documents and packages or items requiring special handling, such as medical supplies, biologicals (blood and organs), and machine parts. Large express delivery companies may also be involved in non-express ground shipping, freight shipping, and managing customers' inventory and logistics.
Couriers pick up and deliver parcels using a variety of transport equipment including freight trucks, airplanes, and delivery vans. Smaller networked couriers may outsource regional, national, or international deliveries by contracting with freight shipping companies and airlines to transport parcels long distance to other networked couriers, who then deliver locally to final destinations. Messenger services typically transport packages locally by bicycle, scooter, foot, or small delivery vehicle.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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