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3/23/2015 - THE HUGE GROWTH FOR THE EXPRESS DELIVERY INDUSTRY

THE HUGE GROWTH FOR THE EXPRESS DELIVERY INDUSTRY


Our Association continues to push hard towards attainment of meaningful regulatory IACSSP compliance revisions. Though it’s sometimes like pushing a boulder uphill, we expect Change 6 to soon bring our membership long sought time and cost saving revisions.

We’d like to share with our members some very good news – the state of the express delivery industry is excellent and it’s projected to get even better.

Frontier Economics is a respected London based economic consultancy which was undertook a comprehensive study of all segments and markets of global express delivery. And Frontier’s report provides some striking and positive news that XLA members should be aware of as they plan their future business strategies.

Consider the following:

Jobs:
The global economic footprint of our industry as a whole is astounding. Overall, the express delivery industry facilitated approximately 3 million jobs worldwide. That includes direct employment and jobs servicing the industry. And that is a “conservative” estimate according to the Frontier study.


Overall Global Growth:
International express delivery volumes have grown on average by 7% over the past five years. Volume growth has been strongest in regions outside North America and Europe. Interestingly, Asia is the top destination for North American shipments with 20% of all shipments. From 2011- 2013 total inbound North American shipments grew by 7.4% and outbound by 4.3%. And the study sees continued growth prospects in just about every region of the world in the coming years. It also notes that express delivery is an engine for international trade growth and economic value as a critical global commerce contributor. Manufacturing components and life science and pharmaceuticals will lead in shipment volumes over the next few years.


Ecommerce Fulfillment:
The Frontier study emphasizes the exponential growth and future potential of global ecommerce fulfillment. In Europe alone, the proportion of consumers engaging in ecommerce has grown from 20% in 2004 to 45% in 2012. Overall ecommerce will continue to account for larger share of world trade. For example, the ecommerce share of trade volumes of developed countries could reach 40% in 2025 and up to 30% in emerging markets. In China alone according to a MasterCard study, cross-border online sales reached $2.92 billion in 2012 and their projection for 2015 is $8.11 billion. Finally, total ecommerce global is expected to grow by 20% the next two years and reach $2.3 trillion in 2017.


Customer Perspectives:
It is worthy to note that the Frontier study did research on “why” businesses use and value express delivery for global shipments. Here are the value points for the global customer according to the study:
• Global Reach – ability to send items anywhere
• Reliability – Knowing the items arrive on time
• Transparency – Being able to track the items
• Speed – ability to reach destination quickly
• Security – Knowing the items move in a secure supply chain.

Just about every bit of information contained in this comprehensive study bodes very well for the continued growth of global express delivery. It did note that customs capabilities and terminal issues still must be addressed- however the loosening of present trade restrictions would be a catalyst for even more robust growth. And true, the study did not focus solely on the “courier” segment of global express and did include the large integrators. Still, the exponential growth prospects contained in the study clearly show markets which are and will continue to expand presenting more business opportunities for our industry in both the near and far term perspectives.


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