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  November 17th, 2016 | Written by

Global Small Parcel Market Growing

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  • 4.3-percent growth in the global small parcel market.
  • North America saw a 5.3-percent in small parcels in 2015.
  • Technology, the rise of ecommerce, and changing consumer preferences are changing the global small parcel market.

Spend Management Experts, a transportation consultancy, released its “First Annual Global Small Parcel Report” last week. The report examines the 2015 global small parcel market to help shippers identify developing trends and the growth of e-commerce.

Spend Management Experts sized the global small parcel market by analyzing key economic and small parcel data. The report cites a 4.3-percent growth in the global small parcel market, with North America leading the way, growing 5.3 percent in 2015.

Technology, the rise of ecommerce, and changing consumer preferences are some of the trends tracked in the report. All of these are disrupting a market that traditionally had high barriers to entry.

“With the rapidly changing dynamic of the small parcel landscape due primarily to ecommerce, our market sizing analysis of the global small parcel market will assist shippers in making more educated decisions when it comes to their small parcel spend,” said John Haber, founder and CEO of Spend Management Experts.

Spend Management Experts developed the report to inform shippers of changes in the small parcel market that directly impact their supply chains. The data highlighted in the report will help shippers to better understand different options and services available to them on a regional and global level, and make more informed decisions.

Now these barriers to entry to the parcel business are breaking down the status quo is being challenged.

While the small parcel market undergoes transformation, the volume of parcels continues to rise. As a result, small parcel providers are facing pressured margins.

“How to compete in such a market profitably is the big question,” the report noted. “However, one can only tweak operations so much. “Eventually, it will require more than that to grow profits.”

The rise of Amazon may be the biggest disruptive factor in the market, contributing to a loosening of the grip on the market by giants like FedEx and UPS. Besides Amazon, competitive threats from startups and post offices are also making their presences felt.

The report also identifies trends such as alternative delivery locations and how fulfillment requirements are changing.

“The outlook for small parcel growth is bright for all regions,” the report oncluded. “Ecommerce will continue to drive much of the volume growth despite uncertain economies and will likely further result in new services and mergers and acquisitions opportunities as competitors look to expand their reach into new regions and new service offerings.”

For shippers, “options continue to grow,” the report noted, “and it is important to consider these options such as delivery provider, service level, and fulfillment capabilities and how they relate to shippers’ strategic goals.”