Consultant Insight: Express market soared in Q1

First - quarter earnings reports from DHL and UPS , a nd FedEx’s recent earnings report for the period ending Feb . 29 , show that the e xpress market continues to grow at a faster rate than the overall air cargo market. Growth for the three leading e xpress providers was primarily related to increased e-commerce demand and COVID-19 relief shipments . Indeed, the three e xpress providers responded quickly to changing demand due to COVID-19 but , despite aiding relief agencies, DHL noted that its express and freight forwarding businesses in February were particularly affected by a decline in cross-border trade flows into and from China. Meanwhile, FedEx was active in delivering items into China. For example, the company noted in a press release that , as of Feb . 20, it had delivered eight shipments consisting of 197 pallets of humanitarian aid to China on behalf of Direct Relief. UPS, a lso worked with non profit organizations to ship items to China. On Feb . 2 , m ore than 2 million respirator masks, 11,000 protective suits and 280,000 pairs of nitrile gloves donated by MAP International and MedShare were delivered in Shanghai on behalf of Project Hope. As COVID-19 spread outside China , the three providers continued relief efforts to support impacted regions. In April, FedEx and UPS added flights and planes in participation with Project Airbridge to support U.S. government relief efforts. DHL ’s efforts have also been commendable ; t he provider announced that its inbound volume from Asia to the U.S. ha d increased by approximately 200 to 300 ton ne s in March and April , due to shipments of personal protective equipment and other critical materials. In addition, DHL Express sent about 10,000 shipments with aid to the Americas region via Miami, with more than 180,000 tests kits going to Central America in March . The company added a Brussels (BRU) -Miami (MIA) flight to its Miami g ateway, increasing capacity to 225 ton ne s per week. E-commerce was another contributor to express revenues and volumes for DHL, FedEx and UPS . Even though none of the providers has provide d great insight into how much e-commerce contributes to revenue or volume, DHL has at least provided a bit . According to its first - quarter investor presentation, B2C shipment share represented 30% in 2019 compared to 10% in 2013 while B2C shipments represented 12% of EBIT margin in 2019 compared to 9% in 2013. DHL’s eCommerce Solutions group recently highlighted volume growth of over 36% in domestic volume and 28% in cross - border volume compared to the daily averages seen in February. In terms of volumes, average daily domestic volume growth was greater for UPS versus international volumes. UPS’ Next Day A ir product , for example, grew more than 20% for the second consecutive quarter and d eferred volumes increased almost 8.0% , while i nternational average daily volumes declined 1.8%. FedEx Express domestic volumes slipped 1.5% for the quarter ending Feb . 29 , while international export volumes increased 2.0%. DHL’s Time Definite International (TDI) and Time Definite Domestic (TDU) each saw volumes increase 0.6% for the quarter ending March 31. By region, the Americas noted the greatest per-day TDI volume increase, up 8.3% , while Europe per-day TDI increased 1.5% and APAC and MEA were down 0.8% and 16.8% , respectively. According to Cargo Facts Consulting’s report “ Air Express Market Outlook 2020-2024 , ” e xpress accounts for almost 17% of international air cargo traffic. Analysis from the consulting firm further indicates that DHL has the largest market share , with 32% of the total e xpress market in terms of volumes , followed by UPS at 33%, FedEx at 24% , and other express providers with 11%. It is likely that express will increase its share of the total air cargo market as e-commerce volumes continue to grow and the COVID pandemic continues . Meanwhile, Chinese express providers , such as SF Express and ZTO Express , could upset market share rankings as they continue to expand their international presence.

Consultant Insight: Express market soared in Q1

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