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Editor: Dominic Fenn
ISBN: 1-84168-219-5

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EXECUTIVE SUMMARY

In the context of this report, express deliveries include the consignments of light and heavy freight that constitute an essential part of the 'just-in-time' method of distribution adopted by manufacturing industries and national retail chains. Key Note estimates that the total value of the UK courier and express market, including logistics, increased by 6.9 percent between 1999 and 2000, from £4.21bn to £4.5bn. Value growth in the logistics sector, at 8.5 percent, was much stronger than the 4.5 percent growth seen in the courier services sector, which focuses on express deliveries of documents, mail and parcels.

The trend towards the integration of logistics with express services has greatly enlarged the market, and has encouraged some leading courier and express companies to move into logistics, where demand is both greater and growing more quickly. For many express service providers, this move seems a natural extension to their existing activities, since they already have the expertise and the IT equipment required to monitor, track and trace every document and consignment from collection to delivery. Some of the largest companies in the logistics sector are owned by European postal operators, which now combine their traditional postal functions with supply-side management and the physical distribution of freight.

The timed delivery of documents, mail and parcels on the same or next day, within the UK and Europe, remains the core business of courier and express parcel companies. There is a wide market for these services, since any business or private individual is a potential customer. The supply of express services has proliferated to meet the high level of demand, and the UK market is now virtually saturated. The networks, however, continue to expand, as international markets — particularly those in Europe — become as important as the domestic market. All the leading UK companies have formed partnerships or alliances with their counterparts in continental Europe, to ensure that overseas customers receive a guaranteed delivery service of the same quality as that enjoyed in the UK.

International freight traffic is increasing rapidly as multinational companies set up new manufacturing operations around the world to supply their primary markets in North America and Europe. Freer trade, the reduction or elimination of tariff barriers, quicker Customs clearance, the development of airport infrastructures that are equipped to handle large quantities of freight, larger aircraft with longer ranges, and the eagerness of a growing number of countries to participate more fully in the global economy have combined to transform the economics of transport for non-courier express services. Large loads can now be transported by air over vast distances at a reasonable cost in just 2 to 3 days. The internal market, meanwhile, has been transformed by frequent, just-in-time deliveries, which have reduced stock levels to a bare minimum and have increased the need for the highly efficient and speedy distribution systems that are provided by logistics companies.

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Text © 2001 Key Note

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Last updated by Mandy Porteous 18th July 2001