Although the U.S. express and delivery market is the largest in the world, the fastest-growing market is in the Asia-Pacific region. China, the center of current Asia-Pacific activity, will become the sixth largest express market in the world by 2010, provided it continues growing at an average 20% per year, according to market analyst firm Datamonitor.
Datamonitor estimates China’s express delivery market value to be $3.5 billion (2005), and notes that the driving factor behind China’s growth is its increasing export activity with Europe and the U.S.
“China is increasingly being seen as the manufacturing center of the world,” says Emilio Pedrinaci, express analyst at Datamonitor. “Post-WTO China is also experiencing rapid market liberalization and modernization as well as rising domestic consumption. Consequently it has become a strategic market for global businesses.”
According to Datamonitor, the overall U.S. express and parcels delivery market is worth $65 billion. It is very mature, dominated primarily by UPS and FedEx, followed by DHL and the United States Postal Service (USPS). TNT Express meanwhile only has a small presence in the U.S. market. Domestic express and parcel delivery products account for almost 90% of the total U.S. market. UPS and the USPS dominate the Ground segment as a result of a long-standing ground delivery service network. FedEx and DHL USA mainly concentrate on the air express segment, although the former has expanded its market share in the Ground segment over the past few years.
Europe’s express and parcels delivery landscape meanwhile reflects the international dominance of the “four integrators” and the gradual expansion of the two largest postal operators in Europe (apart from Deutsche Post and TNT N.V.), La Poste and Royal Mail, primarily fueled via acquisitions. As the European market consolidates, the combined market share of the “big six” increases and Datamonitor expects this will likely to continue as the major players expand operations in Eastern Europe, particularly in the new EU countries.
Germany represents the largest share of the European express and parcels market, followed by the U.K., which has been growing at a faster pace than Germany and France, and has consequently closed the gap with the largest European market. The central and Eastern region accounts for a small share of express revenues in Europe but is the fastest growing market within it as it is poised to experience double-digit rate figures for the next five years.
The structures of the respective regional express and parcels markets vary widely, but most European countries share one commonality: the market leader is usually the incumbent national postal operator and its express subsidiary. In the majority of EU countries, the national postal operator is followed by an integrator (usually DHL) as the second biggest player in terms of market share.
With a value of $34 billion, Asia-Pacific is the fastest-growth express and parcels delivery region, globally, and according to Datamonitor has experienced growth rates of between 15-20% over the past few years. Japan is the largest and most developed express market in Asia-Pacific, which helps to explain why the key domestic Japanese parcel operators – Yamato Transport, Sagawa and Nittsu – appear as the top players in the region.
Globally, China is a strategic growth market for the express industry. Among the key reasons for this given by Datamonitor’s Emilio Pedrinaci are “the role of China as key country in terms of global supply chains and the significant GDP growth maintained in the last four years, which have made China the second EU trading partner after the U.S. In addition, the country is experiencing a significant expansion of transportation infrastructure.”
