This year has seen many companies in the parcels sector thrive as carriers move record volumes and consumers continue to do more of their shopping online. But while this has encouraged some parcel carriers to invest heavily in their networks and offer more services to their customers, 2013 has also bought with it more challenges for many operators who have struggled to keep apace with the rapidly changing industry. Motortransport.co.uk has compiled a list of the biggest stories in that have shaken up the parcels sector this year.
Royal Mail is privatised
Arguably one of the biggest and most controversial stories in the sector this year, Royal Mail has now become one of the largest private fleet operators in the UK.
But while it posted 147% growth in pre-tax profit for the first half of 2013-14, this hasn’t come without some troubles. The threat of industrial action by members of the Communication Workers Union, the loss of some work to competitors, and a potential new rival final-mile service provider, will all no doubt leave the company with some more challenges going into 2014.
City Link sold for £1
After five years in the red, City Link was sold to turnaround investment firm Better Capital for just £1 earlier this year. Despite narrowing its losses, former parent Rentokil Initial believed that it had “turned the corner”.
Since the sale, City Link has launched a number of new services aimed at small businesses and consumers, trying to shake its predominantly b2b carrier image.
Amazon.co.uk launches its own delivery network
In the past, Amazon has used a series of third parties to carry out deliveries on its behalf, but 2013 gave these carriers a new challenge as the online retailer launched its own delivery brand.
With four sites currently in operation and plans to open another four in 2014, could Amazon be gearing-up to take all of its deliveries in-house? Although it said the current Amazon Logistics operation is used to “compliment the work of [its] existing carrier partners”, only time will tell whether it will decide to take on more of its own deliveries and reduce its reliance on other networks.
UPS pulls out of TNT acquisition
Almost a year since it first entered into talks with its rival carrier about a multi-million Euro takeover, UPS backed out of the deal in January.
The European Commission planned to formerly prohibit the merger from taking place, fearing that it would restrict competition in Europe, but analysts suggested that carriers would have in fact gained from a new player in the market.
Analysts also suggested that UPS is likely to look for another carrier to acquire, but Motortransport.co.uk has since heard of no such plans.
TNT Express reveals profit improvement plan
Shortly after UPS pulled out of its takeover bid, TNT revealed plans to target higher margin business, including palletised freight and larger, bulkier parcels. However, the significant amount of restructuring at TNT’s UK business to create shared service centres hasn’t come without its consequences. Some 237 jobs were later lost in a finance and admin office shake-up last month, plus restructuring its sales and operations divisions earlier in the year cost around 15 managerial positions.
Rico Logistics buys DHL Express’ same-day business
Three years after DHL Express sold its domestic b2c business to create Yodel, DHL disposed of its domestic same-day operation to parts distributor Rico Logistics for an undisclosed sum.
Rico’s sales and marketing director Martin Cheeseman said the deal allowed it to “leap-frog [its] forecasts by around 12 months” and continue on its path to grow in the same-day courier business. Market analysts believe Rico is preparing to create a network that will rival that of CitySprint, while DHL Express is continuing to focus on its international activities.
