Parcel shipping volume is to grow annually at 5% to 7% between now and 2018, for a total increase of 20%, with the biggest gains coming in cross-border shipping, according to a new study from Pitney Bowes.
The 2016 Parcel Shipping Index looked at B2B, B2C, C2B and consumer-consigned shipments weighing up to 70 lbs. in 12 major markets (U.S., Canada, Brazil, Germany, France, Italy, Norway, Sweden, Japan, Australia and India).
“With the growth we’ve witnessed over the last several years in ecommerce, it is no surprise the global parcel shipping market continues to expand at a strong pace,” said Lila Snyder, President of Global Ecommerce for Pitney Bowes. “That growth in parcel shipping is having a profound effect on businesses. Increased demand has led to greater service options from an expanding number of global, national and regional carriers. However, managing multiple carriers and shipping goods across borders also creates new challenges and raises complexity.”
As ecommerce is growing at about 15% per year compared to 5%-7% for global parcel volume, Snyder said she expects the share of parcels being generated by ecommerce to increase. “This highlights the challenges retailers face, including the complexity of managing the seasonality of volume and continued pressure on the shipping market,” she said.
In the Pitney Bowes survey, 42% of respondents said they experienced some type of issue last holiday season, such as the wrong item in a box, a bad tracking number, a late arrival or a no show. For the U.S., the figure was somewhat better, at 33%.
“We were surprised by the sheer number of those affected last holiday,” Snyder said. “Those numbers along with the parcel growth puts the problem in context. Consumers have high expectations, and this will only get more challenging as the parcel market grows.”
Adding to the complexity of parcel shipping, Snyder said, is the increasing use of drop shipping and ship-from-store by retailers, as they tap their vendor network to speed up fulfillment and meet customer expectations. But this adds more complexity into supply chains and logistics, with multiple networks and facilities in play.
“For an individual order with three items you might have multiple parcels from different locations,” Snyder said. “That phenomenon is growing as retailers optimize their supply chains to put inventory closer to consumers. It’s an interesting trend that’s only going to continue to escalate as these demands and expectations rise.”
Some other takeaways from the Pitney Bowes index:
- There were 31 billion parcels shipped globally in 2015, up 2.9% from 2014
- Not surprisingly, the U.S. is the largest market for parcel shipping out of the 12 surveyed, with more than 11.7 billion parcels shipped and $85 billion spent in 2015
- The global parcel shipping market is being driven primarily by growth in ecommerce as the number of online shoppers increase around the world
- After the U.S., the top countries in terms of annual parcel volume are Japan (9.4 billion), Germany (3 billion), the UK (2.2 billion) and France (1.5 billion)