For the purposes of this report, the terminology of courier and express delivery is defined as delivery of documents and parcels up to a maximum of 50kg, including to both households and businesses, thereby excluding pallet and freight delivery.

Express delivery typically involves a time specific 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 that the customer chooses.

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

Guaranteed time covers other time specific guaranteed deliveries in excess of 24 hours. In the UK internal market, this typically comprises either a two-day or three-day delivery service, whilst internationally, the timescales can vary far more significantly. For international deliveries, timescales are not only dependent upon travel times and freight schedules, but also the infrastructure available in the country of destination.

All values quoted in this report are at current prices unless otherwise stated.

The term billion refers to one thousand million.

Some figures may not total due to rounding.

With such a high level of industry fragmentation it is not possible to review all the companies in a report of this type. This report is not a directory of industry participants, and the following provides a synopsis of operators representative of a cross sample rather than necessarily the largest industry participants.

Reports are researched and written by MBD’s in-house, specialist business-to-business consultants. Research is based on both an analysis of official information and on original, trade research, providing both a quantitative and qualitative view of the market. MBD’s unique range of quarterly updated reports provide an integrated body of on-going research, enabling deep understanding of the prevailing trends and of the drivers of these trends based on trade opinion.

The following abbreviations appear in this report:

The courier and express delivery industry has evolved over time from its beginnings as a service primarily for business-to-business (B2B) parcels and packets. It now includes the business-to-consumer (B2C) and nascent consumer-to-consumer (C2C) sectors. Growth in these two areas is driving the industry.

The broader European industry is estimated to deliver more than 260 million packages annually, according to the European Express Association. A number of firms in the UK are part of bigger European companies, such as Deutsche Post, La Poste and TNT.

The same-day courier sector and the express delivery sector sit alongside each other. Some companies operate across both, providing same-day delivery and more conventional express services, albeit these are almost always subcontracted to couriers. A number of companies operating in the industry are also active in the road haulage market, offering freight transport, warehousing and fulfilment services.

Dedicated courier service firms face different demands to express delivery operators. The former don’t consolidate a wide number of packages, but typically deliver one parcel immediately to the destination in a dedicated vehicle. In contrast, the express delivery sector is traditionally more concerned with consolidated package loads, carried over longer distances and in larger volumes. The main express delivery operators have therefore developed regional sorting hubs to manage deliveries. Express delivery firms also have to cope with unpredictable B2C delivery demand, which increases substantially over the Christmas period as online sales have rocketed upwards in recent years. As a result, managing capacity during this period of the year is a significant factor for carriers.

The UK express delivery service sector differs from the postal service sector as operators are independent of the Post Office (unlike the Royal Mail) and charge based on the speed of the required service, the weight of the consignment and the distance of the delivery. In contrast, the postal service tends to charge a single price irrespective of the distance covered and typically does not guarantee delivery within a specific time frame.

The UK courier and express delivery industry includes a number of international global operators, such as UPS and FedEx, but also significant and established UK-based operators.

Demand for parcel delivery has traditionally come from the B2B sector, with companies paying to transfer mail and parcels for guaranteed time delivery as an alternative to using national postal services. A wide range of sectors across the economy use these services, including manufacturing and industry, as production processes have changed to demand quick turnover of goods and parts with limited stock holdings.

Volumes of B2B mail and parcels have reduced over time as the emergence of fax and then e-mail change the way businesses communicate. However, trade sources believe that the negative impact of email and other electronic communications has been overstated, with email generally substituting for communications that would otherwise have been sent by mail or other means, not express delivery. Demand in the B2B market is affected largely by the economic environment and generally moves in line with GDP development.

Substantial demand for express delivery services now also comes from major retailers that are continually increasing their online sales. They are also responding to demand from customers to deliver parcels in shorter time periods. Many express delivery firms have signed significant contracts, lasting for several years, with major retailers to act as their exclusive delivery partner. In addition to deliveries to households, returns also generate extra volumes for parcel carriers.

More recently, the smaller C2C sector has shown growth with the development of online marketplaces that connect private individuals looking to buy and sell goods. In response, a number of companies, such as Yodel, have launched new C2C delivery services.