Increase In Online Retail Sales Means Success For UK Courier Industry
The effect of internet shopping on the courier industry doesn’t appear to be a market that Royal Mail has managed to grab hold of as yet.
Transactions carried out over the Internet now account for around 15% of the UK’s total retail sales. This amounted to £133 billion spent online in 2016 according to recent research compiled by Capgemini and IMRG, and this trend is only expected to grow as more consumers cotton on to the convenience of using the Internet to shop. This has had a knock-on effect in a number of areas: the high streets of the UK have experienced a decline in sales and some retailers have gone into administration, but there is good news for the courier industry which is in demand more than ever before.
Increase In Courier Sales
The express delivery and courier market experienced a £1 billion increase in sales during 2016, totalling a £10.1 billion spend on this method of sending parcels. The largest increase within the industry has been within the B2C, or business-to-customer space. Data collected by market intelligence agency, Mintel, found that 2.8 billion packages were delivered throughout 2016, which was a 65% increase on the 1.7 billion that were transported four years previously in 2012. Value sales are expected to grow by 11% by the end of 2017, with a projected 22% growth expected by 2021.
The growth of the courier industry is of course dependent on the increase in online retail sales over the same time frame, but this shows no signs of slowing down either and is expected to grow by 55.3% over the next five years.
The Effect On Royal Mail
It’s been a while since Royal Mail was the big name in the parcel delivery industry. Companies such as Yodel, Hermes and DPD have long operated in their own corners of the courier market. As retailers rely on their preferred transportation service, fewer are utilising the familiar model of Royal Mail to guarantee fast results. As fewer letters are being sent, Royal Mail has tried to offset the decline in letter revenue by increasing their parcel delivery count, but recent data suggests that this hasn’t been achieved as yet. Royal Mail’s parcel volumes have increased by just 8% since 2013, which is much slower than many of the courier companies are currently experiencing.
Price competition, convenient delivery time slots for recipients and rapid delivery services are three key factors that are determining why businesses are choosing to use courier services other rather than Royal Mail. Specialist businesses are also requiring a more varied range of transportation options too, with food couriers required for instance to provide chilled transit for fresh produce.
The future of the courier industry will depend largely on whether transportation companies are able to continue meeting the growing demands of consumers. Hiring enough couriers to provide rapid and quality services will form the foundations of a successful business model. But with couriers estimated to be able to earn around £140 a day, and some reports of over £300 per day being made, this is likely a job that will appeal to anyone with a clean UK driving licence.