Express delivery services UK 1998
The UK express delivery services market is estimated to have delivered 681 million packages in 1997, representing an increase of 10% from the volume of consignments transported in 1996. The UK express delivery services market in value terms has grown less significantly as a result of the continued price discounting by many express delivery service providers. MSI estimate that the market increased by 7% in 1997 to œ2.2 billion (ECU3.2 billion).
Internal deliveries in the UK express delivery services market are estimated to have accounted for 95% of the volume of packages in 1997. MSI estimate that next day deliveries accounted for 315 million packages in the market. Indeed, demand for next day deliveries has increased in volume terms by 44% between 1993 and 1997. Other guaranteed deliveries rose by 13% whilst the size of the non-guaranteed services sector contracted by 2% between 1993 and 1997.
The UK market for international deliveries continued to grow in both volume and value terms. In 1997 the volume of packages for international destinations increased by 12% with a significant proportion of this growth accounted for by deliveries to non-European countries. Indeed the proportion of the market volume accounted for by non-European deliveries had risen to 31% in 1997.
MSI believe that demand for express delivery services is affected by a number of factors including:
– end user performance
– UK and international economic factors
– the trend towards globalisation
– political changes
– government policy
– the pricing of express delivery services
– customer perception of added value services
– social trends
– trends in distribution and production
The UK market for express delivery services is forecast to continue growing in both volume and value terms between 1998 and 2002. In the internal sector, MSI forecast that the growth rates of the value market will become increasingly in line with those forecast in the volume market reflecting the trend towards price stability in the market. In contrast, as the international market becomes further characterised by competition and reaches a level of maturity, prices in the sector are expected to decline.
MSI have identified a number of factors which are considered to be critical for the success of express delivery companies. The following factors are of particular importance due to their role in the decision making criteria of customers:
– price
– geographical coverage
– range of services
– speed and timing of delivery
– quality of service
– reliability
– customer care
During the 1990s the UK express delivery services industry for internal deliveries has become more concentrated with many smaller companies being forced out of the market as a result of the UK economic recession. Indeed, the leading 14 companies accounted for 93% of the total market value in 1997. The international sector continues to be led by four companies. However, many UK companies are penetrating the international express delivery services market which is serving to reduce concentration in the sector.
