Revenue growth will be driven by the courier segment, which will benefit from increased business activity
New York, NY (PRWEB) September 25, 2014
The Couriers and Local Delivery Services industry is comprises two segments: large couriers and small local delivery companies. Together these segments cater to a wide variety of consumers, with demand for each segment differing based on the services offered. Specifically, downstream demand for courier services stems from manufacturers, households and retailers across the county, while demand for local delivery services is derived from local businesses and individuals. While the market for these two segments differ, demand tends to be cyclical. Over the five years to 2014, consumer spending increased despite lingering effects from the recession and concerns over a real estate bubble. According to IBISWorld Industry Analyst Daniel Carusotto, “Higher consumer spending led to increased business activity and effectively benefited demand for industry services.” As a result, IBISWorld expects industry revenue to increase at an annualized rate of 1.6% to $9.7 billion over the five-year period, including growth of 1.4% in 2014 alone.
While the rise of the internet and e-commerce has affected many industries, the effect on the Couriers and Local Delivery Services industry has been especially impactful. E-commerce sales have been increasing over the five years to 2014, and are expected to continue doing so in the next five years. Increased sales have led to heightened demand for courier services to deliver products from online businesses to consumers, effectively helping drive industry revenue. On the other hand, digitization of documents and e-mail have greatly reduced the need for local messengers delivering contracts, invoices, magazines and other physical items. As a result, the local deliveries segment is expected to struggle going forward.
In the coming five years, the Couriers and Local Delivery Services industry is expected to perform well. “Revenue growth will largely be driven by the courier segment, which will benefit from increased business activity resulting from an improving global economy,” says Carusotto. In addition, e-commerce and digitization will continue to benefit couriers while reducing demand for most of the local deliveries market. Competition within the courier market will be intense; as a result, couriers such as UPS will look to expand to new markets, such as to the healthcare sector.
For more information, visit IBISWorld’s Couriers and Local Delivery Services in Canada industry report page.
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IBISWorld industry Report Key Topics
This report combines two separate industries: Couriers (NAICS 49211) and Local Messengers and Delivery Services (NAICS 49221). Couriers are establishments that primarily engage in delivery services between urban centres using a network of air and surface transportation systems. In contrast, local messengers provide delivery services within a single urban area and are excluded from courier networks.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
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