Amazon takes major slice out of UK delivery market

[TrueBlueTerrier]

https://tamebay.com/2017/08/amazon-take ... arket.html" onclick="window.open(this.href);return false;

Capturetame.PNG

Amazon is now one of the biggest couriers in the UK. Amazon Logistics has grabbed a 7% market share of the delivery market by parcel numbers, slightly behind Yodel on 8%. The numbers are pretty staggering with Hermes on 11% and Royal Mail on 47%, all other couriers in the UK share the remaining 27% share of the market.

In revenue terms, Royal Mail (35%), DPD (12%), UPS (8%), DHL (7%), and TNT (6%) are the top 5 players contributing to approximately 68% of the parcel market in UK (obviously no one gets to see Amazon Logistic’s revenues). The numbers were released by Pitney Bowes in their ‘Parcel Shipping Index 2017’.

Amazon Logistics are now a sizeable courier in their own right and no other retailer in the country ships these sort of volumes, although of course Amazon’s volumes are boosted by third party retailer packages going through FBA. When you see numbers like these and realise that Amazon’s 7% of the UK parcel market has been stolen away from Royal Mail and other couriers it does put into perspective the pressure the industry is facing.

The good news for the delivery market is that last year the UK saw an increase in parcel deliveries by 12% to 2.5 billion and spending increased by 8% to £10 billion. Following the 48% increase in global parcel over the past last two years, the Parcel Shipping Index forecasts a 20% increase in parcel volume every year from 2017-2021.

With a £9.7billion spend on parcels in the UK, the sums floating around the delivery market are mind boggling although margins are always razor thin. If Amazon continue to grow their logistics business then that will increase pressure on other carriers as there is less to go around.

It’s worth remembering that UK consumers only started to receive parcels from Amazon Logistics about four years ago. To have taken 7% market share (about 175 million parcels a year) in such a short space of time shows their phenomenal growth.

Amazon are no longer just a retailer. Amazon is no longer just a marketplace. Amazon is now one of the biggest courier companies in the UK. The only question remaining is if they will open up their logistics business to carry parcels for competing retailers, or if Amazon Logistics will remain dedicated to delivering goods sold on Amazon.

[Spedley]

There was quite a big gap left when city Link went bust. Perhaps amazon have just taken their share and the market hasn't changed.