Is the parcels market up or down as a result of COVID-19?

[TrueBlueTerrier]

https://apex-insight.com/parcels-market-covid/" onclick="window.open(this.href);return false;

It is clear that the COVID-19 pandemic and associated shutdown is having a major impact on the parcels industry in Europe and worldwide.

But it is less clear exactly what the overall impact is, with some segments seeing volumes decrease significantly while others have seen substantial increases versus pre-COVID expectations.

Carriers who have suffered are those that mainly serve B2B customers – many of whom will have shut down their operations – while those with significant exposure to B2C have seen increases as a far greater proportion of shopping has shifted on line. There have also been differences in parcels volume performance between countries according to the severity and duration of shutdown and the ability of the online retail sector to scale up to meet a surge in demand.

Carriers who mainly focus on B2B and hence are likely to have seen their volumes decrease include Dachser, Trans-o-flex, Tuffnells, DX, Fedex/TNT UK and GLS. In a COVID-19 update by its parent, Royal Mail, at the end of March, the latter reported significant disruption in Italy, France and Spain with increases in B2C volumes not being large enough to offset B2C decreases.

Carriers reporting increased volumes due to B2C growth include Amazon, DHL, Hermes and DPD:
– Amazon is apparently experiencing a mini-peak as it gains overall retail share, building on its as its Q1 growth of 26%.
– DHL reported domestic parcels growth in Germany from the last two weeks of March. It is currently operating at similar levels to pre-Christmas peak at over 8 million parcels per day, compared to average levels of 5.2 million.
– Similarly, Hermes UK recently stated that it was handling ‘exceptionally high’ volumes
– DPD UK is now delivering significant additional parcels as a result of the pandemic. This includes 60,000 donations to hospitals and 200,000 Morrisons food boxes per week.

The overall picture is further compliacted because increases in online retail orders have not necessarily fed directly through to an increase in parcels volumes. This is because carriers have encountered problems in scaling up their capacity at a time when they have also had to deal with an increase in employee sickness levels. In this context, there have been widespread reports of collections being delayed and deliveries taking longer than expected.

The true picture won’t be clear until carrier financials are released in many months time.

[chocolatesaltyballs]

Carriers who have suffered are those that mainly serve B2B customers – many of whom will have shut down their operations – while those with significant exposure to B2C have seen increases as a far greater proportion of shopping has shifted on line.

What are B2B and B2C ?

[SpacePhoenix]

Carriers who have suffered are those that mainly serve B2B customers – many of whom will have shut down their operations – while those with significant exposure to B2C have seen increases as a far greater proportion of shopping has shifted on line.

What are B2B and B2C ?

Probably Business to Business and Business to Consumer

[chocolatesaltyballs]

That makes sense, cheers.

[hero22]

is that saying royal mail have reported a drop ?

[rambo1]

is that saying royal mail have reported a drop ?

Doesn't really say, but what I have seen in our office, it certainly has not had a drop. There's probably 30-50% more packets than normal for time of year. What is also relevant to royal mail with regards to profit is that GLS is not doing well out of the current situation and they essentially prop up our profits quite substantially. It may, and does, look busy on our walks but it won't necessarily translate into good news in the bigger picture for Royal Mail.

[denhamhoop]

is that saying royal mail have reported a drop ?

Doesn't really say, but what I have seen in our office, it certainly has not had a drop. There's probably 30-50% more packets than normal for time of year. What is also relevant to royal mail with regards to profit is that GLS is not doing well out of the current situation and they essentially prop up our profits quite substantially. It may, and does, look busy on our walks but it won't necessarily translate into good news in the bigger picture for Royal Mail.

I can categorically state that Packets and Tracked Packets in my Mail Centre are at higher than Xmas Levels and to catch up on the backlog people are working Saturday Nights to clear it so there is some room for next week