A new study from FedEx has predicted that parcel carriers will collectively distribute 1.29 billion shipments across the UK between October and December 2024, 10.9% more than in the same period in 2023.
The study was conducted by Effigy Consulting, which ‘analysed its courier, express and parcels (CEP) database with 500,000 data points on more than 300 carriers in 41 countries’.
Peak deliveries in the UK are expected to hit almost 1.3 billion this year, in comparison to the c. 1.17 billion deliveries made during 2023 peak season. This 10.9% increase is the biggest expected growth in Europe, with the UK also leading the table in total deliveries expected over this period. The UK is forecast to account for 21% of the total deliveries made in Europe from October to December this year.
Behind the UK sits Germany, which is predicted to see c. 1.1 billion parcel deliveries during peak – up 10.8% on 2023 figures. Next is France, which is set to see over 524.7 million parcel deliveries before the end of the year.
Alun Cornish, operations managing director at FedEx, commented: “Peak season is a critical period for UK businesses, with many relying on transportation and logistics to meet increased demand and deliver for their customers. Online shopping, e-commerce and a shift towards deferred services will continue through this year’s peak, reflecting changing consumer behaviour and ongoing cost-consciousness in the market.
“FedEx’s networks will scale and adapt to meet the UK’s increased demand, with options for air and road transportation, as well as more predictive technologies to manage potential disruptions and make the ‘golden quarter’ a success.”
Logistics Manager sat down with Cornish to understand more about parcel deliveries during peak season. Here’s what he had to say:
First of all, what would you say are the biggest challenges for retailers and logistics companies during peak season?
I think for retailers during peak season, it’s generally the uplift that you see from the normal trading position during the rest of the year. For a lot of particularly e-commerce retailers, it’s the period that determines whether they’re successful or not.
Some of their peaks – particularly some of our customers – they see a significant uplift across that period, some up to 30% of their trading. So I think that’s probably one of the biggest challenges – the amount of volume that they’re trying to distribute within a very short window.
And if you think there’s now three peaks within that peak, if that makes sense. So you have Singles Day, then you’ve got Black Friday and Cyber Monday, and then you’ve got the general lead up to Christmas. All have slight deviations for different businesses. So obviously the first two – Singles Day and Cyber Week – are really focused on e-commerce and those sort of businesses, and then more towards the rest of the Christmas, there is more B2B-type uplift as well.
But it generally flattens out after Cyber Week and becomes more manageable. So I think they’re the real challenges across that Cyber Week period where some of the some of the retailers will have significant uplift in their volume.
FedEx’s latest data shows that parcel carriers in the UK will distribute nearly 11% more shipments from October to December this year than during the same period last year. Why do you think this is?
It’s interesting because I guess it’s on the back of some fairly challenging economic and geopolitical headwinds, which is a little bit strange, but I think what we’re seeing is that it’s recovering to pre-pandemic levels. So I think whilst it is an increase year-over-year, it’s getting us back to more of a neutral position, pre-Covid.
And I think generally there’s some confidence – or greater confidence – in British business. I think if you look from a business and from a consumer perspective, we’re seen as importers, but actually we’re a powerhouse from an export perspective as well.
So what we generally see is a third of all of our volume generally exported. There is still a large percentage that is domestic, but a third generally goes across borders, out of the UK, which I think is sometimes missed. I think that helps as well.
So there is some real strength in exports from a British perspective. And of course, from a FedEx perspective, it’s our area of expertise. For 50 years, we’ve been moving packages or moving shipments across borders. That’s really where our skillset is, to support businesses and help them grow.
I was talking to a business recently that trades in apparel, and it was only when they were starting to look at their online enquiries that they realised that 41% of all enquiries were actually from outside the UK, and that then encouraged them to start thinking about how they can export.
What is FedEx doing to prepare for increased parcel volumes over the festive period?
We’ve got really good experience in dealing with peaks – we’ve got a really strong track record. We’ve been able to anticipate trends in the past. I think what we’ve learned to do is stay really close to our customer base. So we ensure that we’re gathering as much insight as we possibly can around what our customers peaks are going to look like, and then that enables us to plan our resources accordingly.
What role are technologies such as AI, automation and robotics playing in not just predicting but also meeting demand during peak seasons?
We’re in the midst of a digital revolution and we’re really well positioned to be able to facilitate that. We were one of the first businesses that introduced tracking packages around 30 years ago. We’re shifting 16 million packages a day and each package gets scanned somewhere between 20 and 25 times.
One of the things that we’ve introduced this year is is a technology called Surround, which allows us to monitor and intervene based on possible disruptions. So a good example is the weather – we use AI alongside this technology, feeding in information about the weather and it allows us to then modify the route of a package. Obviously that enhances the success and it helps us to be more supportive from a supply chain perspective.
That’s one that’s been introduced this year. We’ve got another one called SenseAware, which is a an RFID that again can be used for specific verticals, that contains information about the location of a package and can provide other information as well. So there’s a number of things that we’re using from a digital perspective to support success this year.
How important is tracking and visibility to the consumers in this modern age?
I think it’s the most important thing, particularly from an e-commerce perspective. Customers want to know where their packages are, but also it gives them an opportunity to redirect a shipment if they know where it is at a particular time. If they know they’re going to be out, then they can use our app or FedEx Manager to redirect a shipment either to an alternative delivery address or to a retail outlet. I think having access to real-time tracking information is critical, especially for this time of year.
