New data from Pitney Bowes has revealed that UK parcel volumes have declined for the first time in more than a decade. This latest Parcel Shipping Index from Pitney Bowes, featuring ‘22 data from 13 major countries, also found that coming off two years of pandemic-fuelled growth, global parcel volumes increased only 1 per cent in 22, impacted largely due to the lockdowns in China.
The UK shipped, received and returned 5.1 billion parcels in ‘22, a 5 per cent decline in volumes from 5.4 billion parcels in ‘21, attributed to a drop of 7 per cent in eCommerce sales. Physical stores performed markedly better than online stores, and even Amazon experienced its lowest-ever annual growth rate of 5.2 per cent in the country. This is the first time the UK has experienced a parcel volume drop since ‘13.
Pitney Bowes forecasts UK parcel volume most likely to reach 5.6 billion by ‘28, with a 1 per cent CAGR ‘23 – ‘28. The latest Index also shows 14 million parcels were shipped in the UK each day in ‘22 or around 162 parcels per second. Per capita parcel volume for the UK declined nominally from 80 to 76 with an average of 181 parcels shipped per household during ‘22. The UK parcel market is highly consolidated, with the top five carriers (Royal Mail, Hermes, Amazon Logistics, DHL, UPS) accounting for 71 per cent of parcel shipments in the country. In GBP, parcel revenues declined by 2 per cent, from £18.7 billion to £18.3 billion.
“A year-on-year drop in deliveries for the first time in a decade is a reminder that the eCommerce industry is not immune to broader economic trends. Customers are tightening their belts amid an ongoing cost-of-living crisis and are therefore placing fewer online orders”, stated Georges Berzgal, chief revenue officer & SVP, global eCommerce at Pitney Bowes. “With even the major players struggling to sustain revenue in this climate, carriers must ensure they keep up to speed with evolving customer preferences, such as increasing demand for both same-day delivery and services that are environmentally sustainable or short of that Click-and-Collect. Otherwise, shoppers will have their heads turned by competitors in the market or the alternative of shopping in person.”
This year’s Index found a direct alignment between parcels per person and GDP per capita in the US, Germany, Brazil, and India. Parcels in China, Japan, and the UK exceed GDP per capita, suggesting significant share of exports and deep penetration of eCommerce. Norway, Sweden, and Australia, meanwhile, saw parcels per person lag behind GDP per capita, suggesting a fairly low penetration of eCommerce.
China parcels grew at the slowest rate in Index history, hitting 110.6 billion parcels in ‘22, marking only a 2 per cent growth due to lockdowns and COVID outbreaks. China’s parcel volume had grown at a CAGR of 23 per cent in ‘17- ‘22. Pre-pandemic China parcel volume forecast was 25 % CAGR ‘18-’22 and actual volume growth was lower, at 22% CAGR ‘18-’22.
Key takeaways from the latest UK Index include:
Key Trends for UK:
- A study found that the demand for same day delivery is on the rise, with 56 per cent of online shoppers now prioritising it, compared to 33 per cent in ‘21.
- More carriers are focusing on zero emission deliveries, with electric vehicle (EV) fleets growing in the UK.
- In January ‘23, Royal Mail deployed its 4,000th EV van from its Blackpool office as part of its goal to become net zero by ‘24 and plans to operate all delivery and collections in the area using electric vehicles.
- Investments in smart parcel lockers are expected make the UK one of the largest parcel locker networks in Europe.
- Parcel volume reached 5.1 billion in ‘22, down 5 per cent from 5.4 billion in ‘21.
- Per capita, the UK generated 76 parcels down from 80 parcels in 2021, the second highest, behind only China at 78.
- 162 parcels were generated every second, equating to around 14 million parcels per day.
- Around 181 parcels were shipped per household in ‘22, down from 192 in ‘21.
By revenue, all major carriers except Amazon Logistics reported decline when measured in USD. Royal Mail generated the highest revenue of all major carriers at US$5.1 billion, a decline of 26 per cent from ‘21. Amazon Logistics is the only carrier that had parcel revenue increase in ‘22, at 7 per cent higher than in ‘21. Amazon Logistics also generated the highest CAGR in revenue growth during ‘16-’22 with 28 per cent, followed by Hermes (27 per cent).
Royal Mail shipped 1.3 billion parcels, a 19 per cent decline from 1.6 billion in ‘21; UPS’s volume declined by 15 per cent. DHL, Hermes, Yodel had single digit increases in parcel volumes; UK Mail (DHL) increased parcel volume by 17 per cent. While Amazon Logistics experienced an increase in parcel revenue, its volume declined by 5 per cent in parcel volume from 0.92 billion in ‘21 to 0.87 billion in ‘22.
Over the last seven years, Amazon Logistics generated the biggest increase in market share by revenue at 9 per cent CAGR ‘16-’22, followed by Hermes at 8 per cent) and DPD at 3 per cent. Royal Mail declined in revenue share by 9 per cent CAGR ‘16-’22.
In ‘22, market share by revenue remained roughly the same for UPS, Hermes, DPD, DHL and UK Mail (DHL), while Amazon increased from 12 per cent share to 15 per cent and Royal Mail lost 4 percentage points, from 27 per cent share in ‘21 to 23 per cent share in ’22. Amazon Logistics generated the biggest increase in market share by volume at 11 per cent CAGR ‘16-’22, followed by Hermes at 5 per cent, DHL at 2 per cent, and DPD at 2 per cent. Royal Mail experienced a 14 per cent decline in volume share CAGR ‘16-’22, the highest drop among carriers.
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