Amazon started as online book store and has grown to be the worlds largest online retailer.
Amazon takes major slice out of UK delivery market
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.
Am not surprised anymore. We will be naming the country after Amazon soon. It was not that long ago DPD brought every Amazon parcel here, now it is a stressed out underpaid 0 hour contract Amazon logistics driver (who all drive far to fast)
While the likes of RMG and eBay go backwards and Amazon machine marches on and on, mind you at least RMG have to pay some of their older staff reasonable wages and even the new ones have some rights.
Definitely agree that nothing about Amazon statistics surprise me much anymore. We will soon have “Amazon Brexit”, Amazon toll roads, maybe a new political party looking to take government? Perhaps they will take over UKIP? Scary really.
Amazon are marching along the path of putting everyone else out of business, and whilst we know their plan it is unlikely that anyone will put a stop to it until it is too late.
One of the managers delivered a parcel himself a couple months ago, he said there are a lot of new exciting changes happening with Amazon Logistics in the next 18 months. Don’t quote me but I believe he said they’d be offering delivery for others. He’s been struggling to get enough vans for the job.
They are ramping up in a big way, i have filled out many service questionnaires and also Director Level Seller fulfilled Prime staff from Seattle visit our FC recently to look at exploring bigger sizing of parcels. Currently the cost and size requirements for Amazon Logistics are not competitive against others, but they are fact finding and will hit Yodel, Hermes and DPD even harder in 2018!
I notice Amazon have dropped Collect+ from their Buy Shipping service. If they make Amazon Logistics open to marketplace sellers, how long before we are told we MUST ship everything through them, and can no longer use other shippers ?
Hopefully before that happens, they’ll improve the quality of service – I don’t know what it’s like in other parts of the country, but around here (Hampshire), Amazon are reckoned less reliable than even Yodell ! Our poor local driver is a nice guy, but on a fixed daily rate; they just increased his daily target from 120 to 150 drops per day. That’s a drop every 3.21 minutes if he does an 8 hour day with no breaks of any kind.
I think the Courier companies need to step up on pay and conditions for thier Drivers, before the Goverment step in with a tachograph.
The problem is that the buyer ultimately decides how courier companies operate. The market wants fast/ next day/ same day service yet the costs of providing this are exponential, meaning harder costs, thinner top lines and less profit.
Amazon spreading its stock across multiple FC’s in its network is reducing a lot of these costs where the main couriers are still sourcing from one central location.