Source: Infobase Marketing Courier Market Size Model
Courier industry had been broken down into two major segments – Overnight or Later Delivery and Sameday or Messenger.
a. Overnight or Later Delivery
Shipments that are delivered at least one day after the day they are picked up. This segment of the market includes shipments delivered within Canada, to the United States or other countries around the world.
b. Sameday or Messenger
Shipments that are delivered the same day they are picked up. By definition, these tend to be primarily local and/or regional deliveries.
Source: Infobase Marketing Courier Market Size Model
As we can see from the chart above, overnight or late deliveries represent the majority of the market in year 2000. This is due because of the duration and time needed to deliver which contributes to the different share of revenue and volume.
Market Trends
Pace in the activity had been slowing down in the early 2000. However with the decision made by Federal Express to absorb Roadway Package System (RPS) in their operation, challenge had been increasing from other companies as this type of technology attract a lot of customers. VIA Rail Canada also had been used VIAPAQ courier service which also contributes to the high competition in Courier Industry.
Many services have developed over the past year whose primary purpose is to bring together shippers and transportation companies on the internet. Examples include GoShip.com, GoCargo.com and iLinkGlobal.com. While each of these services do in fact perform physical pickup and delivery, many of the traditional “bricks and mortar” support services and infrastructure are avoided due to the internet. For courier companies, it will be increasingly important to ensure they are listed as an option in these types of services thus increases their customers.
Increasing trade liberalization throughout the world and continued economic development and growth among less-developed nations are creating a need for more and more international shipping. While the major integrators are rushing to be the first into these new market areas and/or increase their capabilities, this also creates an opportunity for domestic players. Specifically, several opportunities may exist to serve as an interline or delivery agent for major domestic players in markets abroad.
Source : Infobase Marketing Courier Market Size Model
Prices in the courier industry have been on an upswing over the past several years and are in fact expected to continue to do so into the foreseeable future.
Source: Transport Canada Policy Group
Internet purchases by businesses in the U.S. are forecast to be $1.5 trillion by 2004. Business to consumer e-commerce is also significant, and forecast to grow from its current level of about $8 billion to $184 billion over the same period.
Using a Canadian conversion factor that assumes Canada represents 10% of U.S. activity, the value of the Canadian business-to-business internet market will be almost $200 billion annually by the year 2004. Using research conducted by Ernst & Young, which suggests the average transaction purchase value on the internet is $92.00 (U.S.), and assuming an average revenue/shipment for these purchases of $6.00 (Journal of Commerce, 2000), this would suggest the size of the courier-related shipping market in the U.S. in 2000 was $3.0 billion.
For courier companies, the shift away from larger shipments, distribution centres and retail locations to direct delivery models of individual purchase shipments has the potential to drive growth to double digit figures for some time to come. The primary implication for couriers will be to develop a method to complete these deliveries to the homes of consumers since many large companies now prohibit the delivery of personal purchases to their premises in a cost-effective manner. Some, such as FedEx, are going to be adopting a strategy that will focus primarily on the business using internet which is expected to be completed online represents even higher growth than personal transactions.
Source: Infobase Marketing Courier Market Size Model
Changes in Courier Industry
Everything around us has been evolving to become more reliable and convenient nowadays including the Courier Industry. A lot of factors had been taken due to the dramatic growth of new markets which contribute to this evolution like safety of the delivering goods, demand of the consumer and technology being used for delivering purpose. How technologies help with today’s Courier Industry? One of the most contributing factors that had been making a lot of changes in Courier Industry is technology. Long ago, whenever people wanted to make delivery of goods or mails, a lot of processes need to be done such as:
1. Write or wrap the letter and items that you want to send
2. Go to the nearest post office
3. Line up to buy stamps or get form for delivery purpose
4. Paste stamps and fill in the forms of your mail
5. Pay the amount needed to do the delivery
6. Inspection of items to the required destination by the workers
7. Delivered the items to the required destination by the workers
The duration for the manual processes involved above normally takes between 3 to 7 days. But now, with the enhancement of technology in the Courier Industry, the processes of delivery become simpler and save time. Although there are some of the processes remain same but there are getting better and simpler. For example the duration of the delivery items have been shorten to 1 day and the process of delivering items become smooth without taking longer time as the need to use counter as medium to send item had been minimizing used.
Advanced technologies and faster types of transportation like jet and airplane had been utilized to realize the demands of the consumer. If long ago Courier Industry used ship or bicycle to make deliveries which took a long time of delivery, now most companies and individuals prefer using airplane or jet which shortens more time to deliver their parcels.
Current ICT/IS Adoption
Some of the famous technology that has been used widely now in the Courier Industry is RFID. RFID is being used for recording delivery, orders online and postal services.
Radio Frequency Identification (RFID) is the reading of information on small devices using radio frequencies or thereabouts. It largely avoids the problems of human error and cost, of disorientation, obscuration and needing to read many at a time that plague barcodes, phosphor dots, print and other alternatives in the postal and courier service. It is an enabling technology of incredibly broad applicability. This is why RFID is already used in the postal and courier service for secure access by people to vehicles and secure areas, secure access of vehicles to yards, location of parcels, conveyances, trailers and much more besides. RFID monitors the performance of the letter post, matches letters to postal boxes to prevent errors and records when and how much a sensitive package has been overheated in transit. In Sweden it is the basis of smart packages that record time of tampering and theft and leads to arrests.
Source: IDTechEx
Reports had been estimated that the global market for using RFID systems will be $3 billion in 2016. It could be much bigger if current efforts to tag individual items gain widespread acceptance. In due course, over one trillion postal items will be tagged yearly, making this the second largest application of RFID in the world after the retail supply chain.
RFID is an idea whose time has come in postal, courier and high volume light logistics. In the past, RFID has been used for little more than the evaluation of postal performance, using tags in a small percentage of letters and the tracking of a small number of conveyances and vehicles. There is even a postal RFID system that completely automates the whole process of mail delivery from accepting the package to classification and dispatching. The current postal package unified information system uses barcodes, thus necessitating human effort at every mail center to input mail numbers into the system. This results in inaccuracies during transfer of duties and it delays the mail dispatches.
The new RFID system which developed by ETRI of Korea, aims to reduce costs, errors and tedious human intervention. It is difficult to estimate when pervasive RFID tagging of most of the courier and letter post will occur but RFID enabled parcels, conveyances, vehicles and trailers are now commonplace, with multiple paybacks often being enjoyed. RFID is enhancing security and safety and removing tedious operations. Swedish Post has a parcel that detects and records tampering using RFID and other innovations abound including RFID cards controlling driver access to postal vehicles and RFID enabled postal sorting equipment. Little wonder that companies as large as Microsoft have entered the fray. The global potential is illustrated by its decision to offer its first postal systems in Taiwan and elsewhere in East Asia.
Benefits of Technology in Courier Industry
With the developing technologies, people no need to wait for a long time just to send items or checking the delivery items. Moreover, customers also can check for their own status of delivery items whether had been sent to the requested destination or not. With the enhancement of technology, everything had become easier and thus gives benefit to the customers. Customer need not to fear that their parcels may not reach requested destination on time.
Reference
IBISWorld (2008). Courier Services in Australia - Industry Report. 5th February 2009. http://www.ibisworld.com.au/industry/retail.aspx?indid=503&chid=1&test=2
Roxana Grigorean (2008). Spree of acquisitions on courier service market. 5th February 2009. http://www.zf.ro/zf-english/spree-of-acquisitions-on-courier-service-market-3095009/
Roxana Grigorean (2007). Courier service companies consider 10% rate hike. 5th February 2009. http://www.zf.ro/zf-english/courier-service-companies-consider-10-rate-hike-3067103/
Transport Canada Policy Group (2006). Canadian Courier Market Size, Structure and Fleet Analysis Study. 5th February 2009. http://www.tc.gc.ca/pol/EN/Report/Courier2001/C2.htm
IDTechEx (2009). RFID in the Postal and Courier Service. 7th February 2009. http://www.idtechex.com/research/articles/rfid_in_the_postal_and_courier_service_00000338.asp
Electronics.ca (2009). RFID for Postal and Courier Service 2008-2018. 7th February 2009. http://www.electronics.ca/reports/rfid/postal_courier.html
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