Although total parcel volume grew at a similar rate to previous years over the 2019-20 period, international parcels stagnated notably, with inbound parcels showing no growth compared to a 15% increase a year prior. Similarly, outbound parcels rose 2% against a 10% increase the year before.

The slowdown points towards the drastic impact the pandemic has had on global supply chains in areas such as China that are now essential to the production of goods, and, even more so, to the UK, which heavily relies on imports. The disruption caused by the coronavirus crisis led to rising shipping costs, as well as the need to invest and adapt operations to meet social-distancing guidelines.

The new UK-EU Trade and Cooperation Agreement complicates this picture. The deal has at least temporarily introduced costs to consumers and businesses. This adds another barrier to international parcel volumes, which have been an outsized source of revenue in contrast to their volume. This would leave couriers more dependent on domestic parcels, a segment driven by fierce competition and downward pressure on margins.

Despite these issues, the influx on new consumers to online retailing in response to the coronavirus crisis has drawn permanent additions to the market, in particular over-65s, who are shopping online more frequently than ever. This demand, alongside investment in electric vehicles (EVs), new delivery vehicles such as bikes, expanding the use of collection centres, and improving efficiency through fleet telematics will underpin the sector’s growth in the years to come.

• The impact of COVID-19 on the courier and express delivery market.

• Market size, forecast and segmentation of the courier and express delivery market.

• Trends in the courier and express delivery market, including the impact of Brexit on international trade.

• Analysis of demographic differences in the uptake of online shopping.

• Analysis of the structure of the courier and express delivery market, profiles of key companies and their recent activities.

The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting on 23 March. It wasn’t until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social-distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions further in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the reopening of schools on 8 March, followed by the easing of restrictions on outdoor gatherings on 29 March, and with a hoped end to all restrictions by 21 June. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

The UK’s vaccination programme started on 8 December, 2020, and with the Pfizer-BioNTech, Moderna and Oxford-AstraZeneca vaccines all licensed for use in the UK, the government aims to offer a first dose of the vaccine to 32m people by mid-April. 

Mintel’s economic assumptions are based on the Office for Budget Responsibility (OBR)’s central scenario included in its March 2021 Fiscal Sustainability Report. After the fall of 9.9% over the course of 2020, the scenario suggests that UK gross domestic product (GDP) will grow by 4% in 2021, and 7.3% in 2022.

GDP is not expected to return to pre-COVID levels until the second quarter of 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster than expected roll-out of vaccines.

Unemployment is expected to peak at 6.5% in the fourth quarter of 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

For the purposes of this Report, the terminology of ‘courier’ and ‘express delivery’ is defined as the delivery of documents and parcels up to a maximum of 30kg, including to both households and businesses, thereby excluding pallet and freight delivery.

Express delivery typically involves a specific time constraint, traditionally on a 24-hour, 48-hour or 72-hour basis. However, with growing demand from online retailers, the target is increasingly based on a particular window of time chosen by the customer.

Courier delivery primarily involves same-day deliveries at very short notice over small distances, and is commonly undertaken through distribution on pedal bikes, motorbikes or small vans.

The term UK market is used to describe turnover derived from the UK, and the market is segmented within the report to internal (within the UK), and international (packages originating in the UK but destined for delivery internationally, or conversely originating internationally, but destined for delivery to the UK). The consignment has to originate in the UK for its distribution to be included in the UK market assessment.

Other forms of internal market segmentation undertaken in this Report identify separate time-specific deliveries. The definitions of these types of services are as follows:

Same-day delivery represents a relatively small element of the total market. Most express delivery carriers operate a same-day service, but this is generally contracted out to couriers rather than undertaken by carrier fleets.

Next-day delivery is defined as a guaranteed delivery of a consignment within 24 hours. This is often conducted as an overnight service, and now frequently involves a further refinement attached, such as delivery within a specified time window.