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Courier & Express Services Update Market Report 2011
Key Note Publications Ltd, Sep 2011
In 2010, Key Note estimates that the value for the UK postal, courier/express market increased by 20.6% to £16.4bn. However, the majority of this growth is the result of the SIC (2007) code reclassification of a number of businesses in the other courier sector. The main body of this reclassification occurred in Q2 2010, while revenue from Q1 was up by 7.7% on Q1 2009; this indicates that the sector was experiencing recovery before the reclassification. The national post sector continues to decline, with revenue falling by 1.3% in 2010.
The UK postal and courier/express market consists of two main sectors; the UK national post comprises Royal Mail — which provides the UK’s universal delivery service — and private providers on national deliveries. The second sector relates to international and national couriers and is non-regulated. While the national post as a sector is in decline owing to increased competition from digital mediums, the ‘other’ sector returned to growth after a poor 2009.
The UK postal and courier/express market suffered during the recession, as almost all markets did. Consumers turned to more cost effective digital alternatives during this time. In addition, fuel price increases have forced couriers to increase their surcharges. However, the recent fledgling recovery and relative stability in the economy has allowed couriers to grow, with acquisitions and new depots a feature of 2011.
The proposed Coalition Government Postal Service Bill received Royal Assent on 13th June, becoming law on that date. The passing of this law has significant implications for Royal Mail as it involves its part privatisation and the burden of its pension deficit passed on to the Government. Regulatory responsibility will also pass from Postcomm to Ofcom.
The future ownership of Royal Mail may be uncertain, but the continued decline in national post volume and revenue looks set to be maintained. The increasing popularity of digital forms of communication — and its ease of access — is something that the national post will struggle to compete with. Other courier services should benefit from the continued rise in online shopping and an improving economic outlook. However, the potential 4p fuel price rise in January 2012 could be a key determinant of the market.
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