Royal Mail retains the highest parcel volume of all major UK carriers in 2022, reaching 1.3 billion, but that is a 19% decrease compared to the year before, according to the latest Pitney Bowes Parcel Shipping Index. Their parcel share by volume dropped 5% from 30% market share in 2021 to 25% in 2022.
This is a massive drop and confirms what everybody already knew – Royal Mail are in critical condition and, having boomed through the pandemic years, the strikes have inflicted a heavy toll and competitors have taken advantage. Royal Mail’s 19% volume drop is almost 4 times the overall drop in parcel volumes showing that people and businesses simply turned their back on the company.
Amazon Logistics remain the second largest UK carrier, shipping 0.9 billion parcels (17% share) followed by Evri with 0.7 billion (14% share).
UK Mail (DHL) generated the highest year-over-year growth in parcel volume at 17%, rising to 0.14 billion in 2022 from 0.12 billion in 2021. DPD matched Yodel in parcel volume at 0.3 billion (6%).
5% Decline in UK parcel volume
The UK shipped, received and returned 5.1 billion parcels in 2022, a 5% decline in volumes from 5.4 billion parcels in 2021, attributed to a drop of 7% in ecommerce sales. Physical stores performed markedly better than online stores, and even Amazon experienced its lowest-ever annual growth rate of 5.2% in the country. This is the first time the UK has experienced a parcel volume drop since 2013.
Pitney Bowes forecasts UK parcel volume most likely to reach 5.6 billion by 2028, with a 1% CAGR 2023 – 2028. The latest Index also shows 14 million parcels were shipped in the UK each day in 2022 or around 162 parcels per second. Per capita parcel volume for the UK declined nominally from 80 to 76 with an average of 181 parcels shipped per household during 2022.
The UK parcel market is highly consolidated, with the top five carriers (Royal Mail, Evri , Amazon Logistics, DHL, UPS) accounting for 71% of parcel shipments in the country. In GBP, parcel revenues declined by 2%, from 18.7 billion GBP to 18.3 billion GBP.
A year-on-year drop in deliveries for the first time in a decade is a reminder that the ecommerce industry is not immune to broader economic trends. Customers are tightening their belts amid an ongoing cost-of-living crisis and are therefore placing fewer online orders. With even the major players struggling to sustain revenue in this climate, carriers must ensure they keep up to speed with evolving customer preferences, such as increasing demand for both same-day delivery and services that are environmentally sustainable or short of that Click-and-Collect. Otherwise, shoppers will have their heads turned by competitors in the market or the alternative of shopping in person.
– Georges Berzgal, Chief Revenue Officer & SVP, Global Ecommerce, Pitney Bowes
6 Responses
During the RM strikes, a lot of businesses changed their carrier and never went back. Did they expect everyone was going to sit around waiting for RM to sort their problems out? That’s not how the world works – businesses needed a solution immediately not in 6 months.
As it happens I did go back to RM purely as it is more convenient for me to post with them, but I know many who did not.
Amazon 17% at what point does the uk competitions and markets authority grow a pair ?
Great news!, Royal Mail deserve everything they get, annoying there business customers over parcels that were 5mm too long (even when they were not) and then adding ludicrous surcharges, charging retail customers less than business accounts, account managers that do absolutely nothing and are of no use whatsoever, super complex codes and services, bad billing system, terrible business support. which all leads to less business for them… who could have predicted it!?
Royal Snail announced even more surcharges today, that are coming into effect later this year. a “Green Surcharge” which is 2p per item, and a “Peak surcharge” which will be from November to January every year at 5p per item. Along with the 8% fuel surcharge and price increases to business acount in October, this is not great news. I have calculated that I will be better off taking my mail to my local post office and paying the over the counter price. Plus I won’t have the pay the 20% vat which eats up cash flow for up to 3 months.
Royal Mail Surcharge Link: https://www.royalmail.com/business/mail/surcharges?elqTrackId=7d039bfbadea43ada254d24f9c74ccae&elq=24d8c2ee63dc4fbfb05aa20ce27e6b09&elqaid=4328&elqat=1&elqCampaignId=5166
I am an SFP seller on Amazon and prefer to ship with Royal Mail and have been doing so for many years and apart from strike periods, it has been sufficient, however, a few months ago, Amazon decided the EVRI was the only carrier I am allowed to use for SFP Next Day Orders via Amazon Buy Shipping.
From the seller forum boards, there are plenty of others.
This will distort the market.
Whilst Amazon says that the change is good for the customer, it’s more like EVRI is giving Amazon better rates than Royal Mail are.
Since the way RMG treated my sales last peak especially the large letters I have not sent one single parcel with them. I only use the large letter service for games and fair few off them are going Courier now as they are still slow and STILL can’t scan items and the price difference is not much these days..
Evri is where it is all going. It is also easier I can just drop the packets off ( which is rammed at the parcelshop), without waiting for RMG for the tracked services ( why these cannot just go in with the sacks and get scanned at the depot).
RMG has had appalling business support for years it is like phoning the council.