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UK Parcels Market Insight Report 2020

  • ID: 5233840
  • Report
  • December 2020
  • Region: United Kingdom
  • 103 pages
  • Apex Insight


  • Amazon Logistics
  • DHL
  • DX
  • P2P Mailing
  • Royal Mail
  • UK Mail
This report reviews the UK parcels market encompassing the business-to-business, business-to-consumer and consumer/small business consigned segments. Having been refined, extended and improved over the last 14 years, it is the leading survey of the UK parcels market, used by many carriers, and other parties with interests in the industry.

It quantifies the market size, historical growth rates, segmentation patterns and levels of industry profitability while reviewing key factors behind these figures. The market size estimate is derived from the bottom-up model of the revenues of all of the operators in the market with adjustments made to add and remove non-parcels activity, as appropriate. This model has been regularly updated and refined since it was first developed in 2004 with the forecast approach fine tuned in the light of experience.

The report provides historical market size figures in value and volume terms from 2011-2019. The forecast (also in value and volume) runs from 2020-2024.

The publisher also carry out an in-depth analysis of the relevant drivers of industry growth - in particular the macroeconomic environment, retail sales and home shopping - setting out historical trends and available forecasts.

The competitive landscape section compares the operating models, strategies and performance of all the national parcels networks. It also evaluates new entrants to the market, such as brokers, parcel shop and locker networks and cross-border B2C specialists.

The report is intended for parcels carriers themselves, users of their services, partners, investors, banks, analysts, consultants and other parties with interests in the sector.

The report is based on:
  • Financial analysis of the accounts of companies in the industry
  • Discussions with the network of senior-level contacts in the market
  • In-depth analysis of the macroeconomic environment and relevant market drivers
  • Extensive desk research
  • The publisher's own experience of advising both carriers and investors in the parcels industry
Information from these sources has been synthesised and presented clearly and concisely with extensive use of charts and tables to illuminate points and support conclusions.
Note: Product cover images may vary from those shown


  • Amazon Logistics
  • DHL
  • DX
  • P2P Mailing
  • Royal Mail
  • UK Mail

About this report
  • Executive summary
About the Publisher

  • List of Charts and Tables
  • Parcels market
  • The parcels market includes next day or deferred delivery of parcels from around 0.75-40kg in weight
  • Key features of the market include high operational gearing, low capital intensity, scale economies arising from consolidation and low customer retention
  • B2B, B2C and C2X segments have converged but retain distinct characteristics
  • Franchised models are receding but other forms of outsourcing are widespread
  • The last mile for home delivery remains both a challenge and an area of innovation
Market size, growth and segmentation
  • Actual vs forecast
  • The publisher's market size estimate is based on company revenues
  • Non-parcel activities of the main networks have been excluded and parcels activities of other operators have been included
  • The market has grown strongly since 2013
  • Figures from Ofcom support the publisher's views of market size and growth
  • The B2B, B2C and C2X segments are impacted by different drivers hence have grown at different rates
  • The market is often segmented by speed of delivery, type of item and international/domestic delivery
  • Consumers are increasingly opting for premium delivery services
  • Growth of internet retail is supporting the shift towards more deferred/economy deliveries, although the picture is more complex
  • Domestic deliveries account for the majority of the market
  • Larger/heavier items are not compatible with highly automated parcels sortation processes
  • Volume trends
  • Price trends
  • Evidence supports lack of price increases
Market drivers
  • The main drivers of the parcels market are online shopping and the overall level of economic activity
  • Pricing is largely driven by competition
  • UK GDP growth slowed in the uncertainty around Brexit
  • B2B parcels has broadly tracked, but been lower than, movements in real GDP
  • Retail sales has continued to grow
  • Of the range of routes via which an online purchase can reach a consumer some, but not all, require a parcel delivery
  • Online retailing has grown considerably over the last decade.
  • Certain categories of online purchase do not lead to a parcel movement
  • The UK is a worldwide leader in internet shopping
  • International sales by UK e-retailers are growing more quickly than domestic sales
  • Average internet shopping transaction values have stopped falling
  • Rates of returns - which are not captured by e-commerce statistics - are (slowly) rising
Competitive landscape
  • UK parcels operators can be divided into several categories
  • The leading international groups have continued to gain share at the expense of UK-only players
  • There have been several long-term share movements over the last decade
  • The UK parcels market is now on the border between ‘moderately concentrated’ and ‘competitive market’
  • The fastest growing companies have been the newer players, followed by DPD (and DPD Local), and Hermes
  • TNT and DX have seen falling revenue over the last 12 years while growth of DHL, UK Mail and Yodel has been modest
  • Estimated volumes by carrier
  • Differences in average revenue per parcel reflect carrier focus
  • Features of carrier business models underpin both segment focus and profitability
  • Revenue per depot by carrier
  • Revenue per employee by carrier
  • Tuffnells, Hermes and Amazon Logistics have business models which reflect the requirements of their respective niches
  • Having increased from 2011-16, margins have fallen back in the last couple of years
  • The overall industry picture masks some significant variations in profitability
  • Several of the more profitable companies have also been amongst the fastest-growing
  • Those with losses have specific factors explaining their performance
  • Carrier rankings suggest some winners - but care is needed in interpreting
  • The publisher's market forecast considers the three main segments (B2B, B2C and C2X) separately
  • GDP is expected to grow steadily and inflation to increase
  • The publisher's forecast is based on the B2B parcels segment maintaining its recent historical relationship with GDP growth
  • The publisher expect to see growth in retail sales continue at a similar rate
Forecasts for growth of click-and-collect
  • Growth in international internet retail sales is expected to continue to be faster than domestic sales
  • The publisher expect to see further growth in home delivery, but at a slowing rate
  • Market value forecast to 2023
  • Market volume and price forecasts to 2023
  • Risks to the forecast

List of Exhibits
Royal Mail parcel operations
Yodel depot
Consumer apps
Parcel shop
Amazon locker
Percentage of parcel shop customers buying something else by network
Hermes self-employed courier delivery
DHL cargo bikes
DPD all-electric urban depot
Zedify cargo bike depot
Quiqup courier platform
DHL in-boot delivery
Amazon drone delivery
Robots and driverless vehicles
UK parcels market size and growth 2012-18
Market segmentation
UK domestic home deliveries by service type
Parcels market - historical volumes by segment
Parcels market - historical average revenue per parcel
FedEx UK: revenue and parcel volume
FedEx UK: revenue per parcel
UK GDP in current prices (money GDP), inflation (GDP deflator) and real GDP
B2B parcels market and real GDP growth
UK retail sales
B2C parcel channels
UK online retail spending: value as % of all retailing
UK online retail spending: % growth
UK e-retail spending (IMRG): value as % of all retailing
UK Internet sales (ONS): value and as % of all retailing
Internet sales resulting/not resulting in an parcel delivery
Internet retail as % of total retail by country
Average spend per online shopper by country
UK e-retailers: domestic and international transaction value
Implied number of B2C transactions
Internet shopping returns rate by category of item
Implied number of UK home shopping movements
Leading UK parcels networks - latest revenue
Carrier size and growth
UK parcels market share trends
UK parcels market competitiveness: Herfindahl-Hirschman index
Long term revenue growth by carrier
Estimated parcel volumes by carrier
Average revenue per parcel by carrier
Operating models and segment focus
% of top UK online retailers which use each carrier
Revenue per depot by carrier
Revenue per employee by carrier
EBIT margins - overall sector and by carrier
EBIT margin by carrier
RoS vs RMS for UK carriers
MoneySavingExpert carrier scores/% regarding the carrier as ‘good’
Which? Magazine: ‘Would you recommend…?’
TrustPilot scores
Nominal UK GDP, inflation (CPI) and real GDP: historical and forecast
B2B parcels market and real GDP - historical and forecast
UK retail sales/% annual change
Internet retail sales which typically do/do not result in a parcel delivery - historical and forecast
UK e-retailers: domestic and international transaction value (£bn) - historical and forecast
Implied number of B2C transactions/millions per year - historical and forecast
Implied number of UK home shopping movements/millions per year - historical and forecast
UK parcels market size and growth: historical and forecast/£m - historical and forecast
UK parcels market size and growth: historical and forecast/m parcels - historical and forecast
Note: Product cover images may vary from those shown
  • UPS
  • DHL
  • TNT Express
  • UK Mail
  • FedEx
  • Parcelforce
  • Royal Mail
  • DX
  • Tuffnells
  • DPD
  • WN Direct
  • DPD Local
  • APC
  • Hermes
  • Yodel
  • P2P Mailing
  • Collect Plus
  • Parcel2Go
  • Amazon Logistics
Note: Product cover images may vary from those shown