Pitney Bowes Parcel Shipping Index points to major parcel volume and revenue gains

As more consumers remain hunkered down at home, due to the COVID-19 pandemic, the parcel sector continues to reap the benefits, in the form of increasing volumes. It is fair to say that was a key finding in the Parcel Shipping Index, which was issued this week by Stamford, Ct.-based Pitney Bowes, a global technology services provider of commerce solutions powering billions of transactions.

The Pitney Bowes Parcel Shipping Index measures parcel volume and spend for business-to-business, business-to-consumer, consumer-to-business and consumer consigned shipments with weight up to 31.5kg (70 pounds) across Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Norway, Sweden, the United Kingdom and the United States. And it added that population data points were sourced from the International Monetary Fund, World Economic Outlook Database published in October 2018. The Pitney Bowes Parcel Shipping Index spans 13 countries and represents the parcel shipping activity of 3.7 billion people, it also noted.

For calendar year 2019, the report said that global parcel volume came in at 103 billion, with myriad related data points, including:

• three out of every five parcels shipped in the world’s major markets were generated by China; and
• 3,248 parcels were shipped every second, on average, in 2019 in the top 13 global markets, for an average of 27 parcels per person; and
• global parcel volume is expected to more than double, to 220-263 billion by 2026, with a 14.8% CAGR for 2020-2024, with the caveat that due to increased uncertainty related to the pandemic, the report said there is a range showing volumes could be as low as 200 billion or as high as 316 billion over the next six years 

What’s more, the report said that the 103 billion parcels shipped globally in 2019 represented a 17% annual gain, which, it said, matches up with the growth range of 17%-to-28% it has previously estimated. And it also observed that 63.5 billion parcels were shipped out of China, for a 26% annual increase, adding that when removing China, global parcel volume saw a 6.7% annual increase, from 2018’s 37 billion, which includes Amazon Logistics, to 2019’s 39 billion. On the revenue side, that represented a 9% annual gain, from 2018’s $323 billion to 2019’s $351 billion, with a CAGR of 11% from 2013-2019.

While China led the way for total volume, the United States set the pace for parcel revenue—at $130 billion—which marked an 11% annual increase and the highest of the 13 nations featured in the report. And the U.S. shipped 14.7 billion parcels in 2019, topping 2018’s 13.2 billion.

When asked what are the key growth drivers for the gains in global parcel volumes, Jason Dies, Executive Vice President and President of Sending Technology Solutions at Pitney Bowes, explained that it is fueled by consumers’ continuing shift to e-commerce.  

“Over the past few months, e-commerce has accelerated with consumers buying everyday products online they may have struggled to find in-store,” he said. “This behavior is likely to continue as retailers offer faster, cheaper shipping, making online shopping convenient for the consumer and cost-effective for the retailer.

And he also noted that non-retailers are shipping more parcels too, with more than one-fifth of U.S. SMB (small- and medium-sized businesses) polled recently by Pitney Bowes said their parcel sending had increased significantly between March and August of this year, due to employees working from home. This was driven by items that they couldn’t collect from the workplace that were shipped to employees instead, from legal documents to IT equipment and care packages.

What’s more, he said that underlying all of these behaviors is carriers’ ability to deliver.

“As e-commerce firms expand their own in-house delivery networks with innovative last-mile delivery solutions, carriers are shifting their business models up a gear, investing in the skills, technology and infrastructure they need to power up and ship high volumes of parcels at scale,” said Dies.

With the Parcel Shipping Index pointing to U.S. revenues seeing the highest growth across all 13 countries, at $130 billion, Dies that that is an ongoing trend, as the U.S. has led that category for the last six years, while adding that this year comes with a caveat.

“What’s different this year is that the Index highlights the emerging influence of Amazon Logistics which showed 155% parcel volume growth in 2019, delivering 1.9 billion parcels in the U.S. alone,” he said. “Competition drives value and accelerates innovation, and it will be fascinating to see the influence of this relatively new market player, how carriers respond and the impact this will have on consumers.  

Although current uncertainty makes forecasting challenging, we expect to see carriers continue to extend their networks, invest in last mile technology and focus on the customer experience to differentiate themselves.”