Courier, Express, and Parcel Services Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

Rate benchmarking plays a crucial role in the highly competitive courier, express, and parcel (cep) industry. It involves a comprehensive process of meticulously comparing the rates charged by different CEP providers for their services to establish industry standards and identify potential outliers. The CEP market is characterized by its diverse range of factors that influence pricing, such as shipment distance, weight, size, delivery speed, and even seasonal fluctuations. For instance,

• A 10-pound DHL shipment from New York City to Los Angeles, with a speedy two-day delivery requirement, may come with a price tag of USD 25. However, by opting for a slightly longer delivery timeframe of three days, the cost could reduce to just USD 15 for the same shipment.

• It can cost CNY 30 to send a 10-pound package with SF Express from Beijing to Shanghai with a strict 24-hour delivery deadline. However, if a delivery window of 48 hours is chosen, the price might drop to just CNY 20 for the identical package.

This dynamic pricing structure highlights the importance of rate benchmarking to help businesses and consumers make informed decisions and navigate the often-complex web of pricing options. By analyzing the rates of various CEP providers, companies can gain valuable insights into prevailing market trends, competitive pricing strategies, and areas where potential cost optimizations can be made. Ultimately, rate benchmarking empowers stakeholders in the CEP industry to make more informed choices and maintain a competitive edge in the market.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, delivery drivers at DHL receive an 18-19% higher base salary compared to the salary received by delivery drivers working in companies such as FedEx and SF Express. However, the year-on-year increment rate in all these companies majorly depends on experience, location and performance.

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the courier, express, and parcel services over the last three years:

• In November 2022, DHL Supply Chain, a global transportation provider, announced the development of a carbon-neutral real estate portfolio of 400,000 square meters. The portfolio is designed to support the growth requirements of DHL's customers across major 6 tier 1 cities as well as meet company's sustainable goals.

• In June 2022, Access USA Shipping LLC (MyUS), a technology-driven platform facilitating cross-border e-commerce, was acquired by Aramex PJSC, a prominent global provider of integrated logistics and transportation solutions. This deal will help Aramex to strengthen its cross-border e-commerce offerings.

• In 2022, UPS partnered with Zipline, a startup focusing on medical drone delivery, to deliver blood to remote areas of Rwanda. The initiative was a success, with Zipline delivering over 11,000 units of blood in the first year. The partnership has opened up opportunities for more similar ventures in Africa and rural areas.