The parcel delivery industry — the sector that deals with the transportation of packages to consumers — is booming thanks to e-commerce growth. The global shipping market, including ocean, air, and truck and courier freight, is now a $2.1 trillion market, according to the World Bank.
Legacy delivery companies have seen a boom in parcel delivery as e-commerce spending has risen but the new generation of 3PL companies is nipping at their heels. Twenty different partners currently share the duties of shipping Amazon’s 600 million packages a year, with FedEx, USPS, and UPS moving the most. Amazon, Alibaba, and Walmart have so far focused on building out their last-mile delivery and logistics services but are increasingly looking at the middle and first mile of the shipping chain, but canny 3PL suppliers such as Diamond Logistics offer a more bespoke carrier-optimised service and are in a prime position to take advantage of this boom.
London is the largest and most mature eCommerce market in Europe with a current urban logistics space requirement of 870,000 sq m. This total is expected to exceed 1.2 million sq m in 2021, an increase of 42%. London has by far the largest European space requirement (870,000 sq m) and this is expected to grow to more than 1,200,000 sq m by 2021. According to the report, “Urban logistics is set to be one of the most significant growth markets of the next few years as eCommerce continues to grow across Europe. Every additional mile adds to the cost and speed of delivery. There is no doubt that demand is there.”
The UK logistics sector is booming. In the UK, there are 178,295 logistics enterprises, with an annual turnover of £1 trillion. The logistics sector contributes over £124 billion Gross Value Added (GVA) to the UK economy, equating to 11 per cent of the UK non-financial business economy, and in 2016 the number of individuals working in logistics was around 2.54 million, which equates to approximately 8 per cent of the UK workforce. The UK remains a leader in logistics at a global level, and was ranked in the top 10 of the global logistics performance index of the World Bank for 2016.
The export outlook for logistics businesses with international ambitions such as Diamond Logistics is attractive. The falling value of the pound and a supportive environment for UK exporters – including increased backing from the British Government – saw exports of goods from UK companies to both the EU and to non-EU countries rise during 2016. Data from the Office of National Statistics shows UK sales to the EU in the fourth quarter of 2016 reached £38.3 billion, up from £32.7 billion in the same quarter of 2015, while non-EU exports were £43.8 billion, up from £38.3 billion a year previously. Logistics businesses such as Diamond Logistics are in a strong position to capitalise as this growth continues. Not only are they well-placed to expand their own activities in overseas markets, but they will also play a crucial role in facilitating the export activities of other UK companies selling increasing volumes of products in international markets.
Online shopping also continues to grow. In December 2016, online retail volumes (excluding automotive fuel) increased year-on-year by 27.9 per cent. Online sales accounted for approximately 14.6 per cent of all retail spending in 2016. Click & Collect has become increasingly popular allowing consumers the flexibility of collecting their goods when convenient and reducing the number of failed deliveries. Click & Collect’s popularity has also led to an increase in demand for same day delivery.
All in all, logistics might not be the most glamorous sector in the UK, but in terms of a business proposition the stats show that it’s great bet in terms of a long-term career. The need to deliver parcels to people and to hold customers parcels in a fulfilment warehouse is one that will always be there, and will only increase in the years to come as consumers and sellers both expect higher service levels from their parcel delivery companies. Become a Diamond Logistics franchisee, and you’re in the perfect position to take advantage of this boom!
