| KN60013 |
| KEY NOTE COURIER AND EXPRESS SERVICES REPORT : August 2003 |
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This report covers: couriers,express services,collection,delivery,parcels,
Companies covered include: ANC, Business Post Group, DHL International (UK), FedEx Corporation, Geopost UK, Initial City Link, Lynx Express, Nightfreight Holdings, Royal Mail Group, Securicor Omega Express, TNT Express Worldwide, UPS (UK),
EXECUTIVE SUMMARY
| The courier and express industry can be divided into two main market sectors: courier services and express logistics. In recent years, the distinction between the two subsectors has become increasingly blurred, with many courier and express companies — especially the larger operators — now offering both courier and express logistics services. Until 2000, both sectors performed strongly. However, since then the courier services sector has outperformed the express logistics sector in terms of turnover growth. |
| The demand for courier and express services is derived from businesses in the manufacturing and services industries. Therefore, the economic performance of these industries strongly affects the success of the courier and express industry. Advances in technology and the increasing use of e-commerce, combined with the courier and express sector's commitment to investing in IT, has cushioned the industry from the worst effects of the recent global slowdown. This is because it has been able to offer added-value services and retain key customers at the top end of the courier and logistics market. |
| The courier services sector has been benefiting from the recent growth in demand for home deliveries generated from Internet retail sales. Rising demand for air courier services to developing economies has also boosted the sector in recent years. However, increased security measures for air freight following the events of 11th September 2001 have increased costs for the sector's air freight operations. The express logistics sector, through its added-value services, has fared better than the road freight industry. Nonetheless, a raft of government measures to tackle environmental pollution and congestion have increased costs for the, largely road-based, express logistics sector. |
| In the short to medium term, the courier and express industry is likely to grow steadily, in line with the rest of the UK economy. Increasing use of Internet shopping services is likely to boost demand for home deliveries. However, problems of congestion on the UK's roads and in the skies, along with the range of new environmental controls currently being introduced for road transport, are likely to create extra costs for the industry. |
TABLE OF CONTENTS
| 1. Market Definition 8 |
| REPORT COVERAGE 8 |
| MARKET SECTORS 8 |
| Express Logistics 8 |
| Courier Services 8 |
| Market TREnds 9 |
| Integration of Courier Services and Logistics 9 |
| Growing Importance of Mail Business 9 |
| Growing Importance of Home Deliveries 9 |
| Changes in Fuel Usage 10 |
| Capacity Issues — Road Freight and Air Freight 10 |
| ECONOMIC TRENDS 10 |
| Population 10 |
| Table 1: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 11 |
| Gross Domestic Product 11 |
| Table 2: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 11 |
| Inflation 12 |
| Table 3: UK Rate of Inflation ( percent), 1998-2002 12 |
| Unemployment 12 |
| Table 4: UK Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 12 |
| Household Disposable Income 13 |
| Table 5: Index of Household Disposable Income (index 1971=100), 1997-2000 13 |
| Market Position 13 |
| The UK 13 |
| Table 6: Express Delivery and Total Domestic Road Freight by Estimated Number of Delivery Shipments (000 and percent), 1998-2002 14 |
| Overseas 14 |
| Table 7: Estimated Number of UK International Express Delivery Shipments by Business, (000) 1998-2002 15 |
| 2.Market Size 16 |
| THE TOTAL MARKET 16 |
| Table 8: The Estimated Total UK Courier and Express Market by Sector by Value at Current Prices (£m), 1998-2002 16 |
| By Market Sector 17 |
| Express Logistics 17 |
| Table 9: The Express Logistics Sector by Value at Current Prices (£m and percent), 1998-2002 17 |
| Courier Services 17 |
| Table 10: The Courier Services Sector by Value at Current Prices (£m and percent) 1998-2002 18 |
| Total Market 18 |
| OVERSEAS TRADE 18 |
| Table 11: UK Imports and Exports Transported by the Courier & Express Industry by Estimated Value at Current Prices (£m), 1998-2002 19 |
| Imports 19 |
| Exports 20 |
| 3. Industry Background 21 |
| RECENT HISTORY 21 |
| INDUSTRY SYNOPSIS 22 |
| Table 12: Industry Synopsis — Courier Activities other than National Post (£000, percent and £), 2003 22 |
| Number of Companies 23 |
| Table 13: Number of VAT-Based Enterprises Engaged in Courier Activities other than National Post by Turnover Sizeband (£000), 2000 and 2002 23 |
| Employment 24 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 24 |
| DISTRIBUTION 24 |
| HOW ROBUST IS THE MARKET? 25 |
| LEGISLATION 25 |
| KEY TRADE ASSOCIATIONS 26 |
| Association of International Courier & Express Services 26 |
| Despatch Association 26 |
| European Express Association 26 |
| 4. Competitor Analysis 28 |
| THE MARKETPLACE 28 |
| MARKET LEADERS 29 |
| ANC Ltd 29 |
| Company Structure 29 |
| Product/Service Information 29 |
| Current and Future Developments 29 |
| Financial Results 29 |
| Business Post Group PLC 30 |
| Company Structure 30 |
| Product/Service Information 30 |
| Current and Future Developments 31 |
| Financial Results 31 |
| DHL International (UK) Ltd 32 |
| Company Structure 32 |
| Product/Service Information 32 |
| Current and Future Developments 32 |
| Financial Results 33 |
| FedEx Corporation 33 |
| Company Structure 33 |
| Product/Service Information 33 |
| Current and Future Developments 33 |
| Financial Results 34 |
| Geopost UK Ltd 34 |
| Company Structure 34 |
| Product/Service Information 34 |
| Current and Future Developments 35 |
| Financial Results 35 |
| Initial City Link Ltd 35 |
| Company Structure 35 |
| Product/Service Information 35 |
| Current and Future Developments 36 |
| Financial Results 36 |
| Lynx Express Ltd 36 |
| Company Structure 36 |
| Product/Service Information 36 |
| Current and Future Developments 36 |
| Financial Results 37 |
| Nightfreight Holdings Ltd 37 |
| Company Structure 37 |
| Product/Service Information 37 |
| Current and Future Developments 37 |
| Financial Results 37 |
| Royal Mail Group PLC 38 |
| Company Structure 38 |
| Product/Service Information 38 |
| Current and Future Developments 39 |
| Financial Results 39 |
| Securicor Omega Express Ltd 39 |
| Company Structure 39 |
| Product/Service Information 40 |
| Current and Future Developments 40 |
| Financial Results 40 |
| TNT Express Worldwide (UK) Ltd 41 |
| Company Structure 41 |
| Product/Service Information 41 |
| Current and Future Developments 41 |
| Financial Results 42 |
| UPS (UK) Ltd 42 |
| Company Structure 42 |
| Product/Service Information 42 |
| Current and Future Developments 42 |
| Financial Results 42 |
| Outside Suppliers 43 |
| The Vehicle Manufacturing Industry 43 |
| The Aviation Industry 43 |
| The Oil and Petroleum Products Industry 43 |
| Warehousing 43 |
| The IT Sector 43 |
| Marketing Activity 44 |
| Table 14: Main Media Advertising Expenditure by Courier and Express Companies (£000), Years Ending March 2001-2003 45 |
| Exhibitions and Trade Shows 45 |
| The UK 45 |
| Overseas 46 |
| 5. Strengths, Weaknesses, Opportunities and Threats 47 |
| STRENGTHS 47 |
| WEAKNESSES 47 |
| OPPORTUNITIES 48 |
| THREATS 48 |
| 6. Buying Behaviour 49 |
| Introduction 49 |
| COURIER SERVICES 49 |
| Express Logistics 50 |
| Manufacturers 50 |
| Retailers 50 |
| 7. Current Issues 51 |
| E-COMMERCE and THE INTERNET 51 |
| European and International Markets 51 |
| The Political Scene 51 |
| Changes to Vehicle and Fuel Taxes 51 |
| Congestion Charging Schemes 52 |
| Introduction of Road Tolls 52 |
| Lorry Road-User Charging 52 |
| Health and Safety 52 |
| Service Development 53 |
| Consumer Demand 53 |
| CORPORATE ACTIVITY 53 |
| Brands 53 |
| Acquisitions 54 |
| Board Changes 54 |
| Diversification 54 |
| Other Companies 54 |
| Legislative Changes 55 |
| Working Time Directive 55 |
| Directive 97/67/EC 55 |
| Directive 2002/30/EC 56 |
| The Environment 56 |
| 8. The Global Market 57 |
| TOTAL MARKET SIZE 57 |
| MAJOR TRENDS 57 |
| IT 57 |
| Security 57 |
| Growth in the Developing World Markets 57 |
| Environmental Improvements 58 |
| Consumer Behaviour 58 |
| The Future 58 |
| 9. Forecasts 60 |
| INTRODUCTION 60 |
| Table 15: Average Independent Mid-Term Forecasts for the UK Economy ( percent growth and million), 2003-2007 60 |
| FORECASTS 2003 to 2007 60 |
| Table 16: The Forecast Courier and Express Services Market by Sector by Value at Current Prices (£m), 2003-2007 61 |
| FUTURE TRENDS 61 |
| Market Segmentation 61 |
| Europeanisation/Globalisation 61 |
| Product/Service Development 62 |
| Technology 62 |
| Competitor Forecasts 62 |
| 10. Company Profiles 63 |
| Anc Ltd 64 |
| Business Post Group Plc 66 |
| Financial Profile 67 |
| Dhl International (uk) Ltd 68 |
| Geopost Uk Ltd 70 |
| Initial City Link Ltd 72 |
| Lynx Express Ltd 74 |
| Nightfreight Holdings Ltd 76 |
| Securicor Omega Express Ltd 78 |
| Tnt Express Worldwide (uk) Ltd 80 |
| Ups (uk) Ltd 82 |
| 11. Further Sources 84 |
| Associations 84 |
| General Sources 85 |
| Bonnier Information Sources 86 |
| Government Publications 87 |
| Other Sources 87 |
Text © 2004 Key Note
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Last updated by Amanda Porteous February 2004
