The express industry facilitates productivity and investment

Firms worldwide are increasingly operating time-sensitive inventory systems, meaning that the rapid and reliable delivery of products or machinery components is very important. The express industry's services can also be highly important in the instance of a breakdown in machinery, which would necessitate the urgent delivery of replacement parts.

The vast majority (86%) of European businesses surveyed stated that their operations would be negatively impacted if the express industry’s services were not available.

Manufacturers would be the hardest hit if express delivery services were not available: 98% expect a negative impact. However, the wholesale and retail sectors are close behind, due to their need for express deliveries to send products to customers.

Source: Oxford Economics Report - The Impact of Express Industry on the EU Economy - October 2020

Breaking these responses down, the largest expected impacts would be on market access. Nearly three quarters of surveyed firms (73%) report that they would expect to lose access to selling in some markets. On average, these businesses estimated that 13% of their sales would be at risk from losing market access. An even greater share, 88%, report that they would lose access to buying inputs from some markets without the use of express delivery services.

The next largest impact is around logistics: approximately 30% responded that the need to increase their own inventory storage and transportation capabilities would very significantly affect their business.

More than a third of all surveyed firms (35%) stated that they would need to increase internal resources related to logistics and customs clearance if they could not use the express delivery sector to provide this specific expertise. Of these businesses, nearly half (46%) report that the ability of the express industry to deal with customs clearances is important to them.

In response to a loss of access to express delivery services, 55% of firms responded that they would invest in acquiring more vehicles, and 50% state that they would invest in inventory storage capacity. Just 23% believed that no investments would be necessary to deal with the change in operating circumstances.

This highlights how the express delivery industry helps to consolidate supply chains, centralising the capital equipment required for logistics into specialised operators, potentially with efficiency benefits.