COVID-19: B2B down, B2C up, but then down – what is the overall impact on parcel delivery?

It’s clear that the COVID-19 pandemic has had a major impact on the parcels industry, but what exactly has the impact been?  In the last couple of weeks, views of what effect the virus will have on the global economy and on online retail have changed rapidly.

Current expectations from a range of forecasters (banks and international organisations such as OECD) who have released new predictions are that global GDP will fall significantly in Q1 and Q2 (by c.10% and c.30% respectively vs the equivalent quarter in 2019), and that there will be a significant recovery in Q3.  The net result of this is that they expect global GDP growth will be close to zero for the full year, with better performance in developing countries than in the major industrial nations.

The best data available on the parcels market specifically is from China, which was impacted earliest by the outbreak. The most up to date market figures show that it saw overall market volume fall by 11% and revenue by 13% in January 2020 vs January 2019.  China Post, but not other carriers, have released figures for February which show that it performed better in February, with parcel volumes being flat and revenues being 4% up vs February 2019

Our own research suggests that parcels volumes in Europe are holding up relatively well.  B2B volumes are falling while B2C – in particular, Amazon – is enjoying a mini-boom from substitution away from physical stores, many of which are now closed, as well as additional deliveries of medical equipment and supplies.  We expect this B2C boom to subside as consumers reduce levels of non-essential purchases as lockdowns continue.  The market is likely to return to more normal conditions only when the general economy recovers, possibly with some lag as some manufacturing operations may take longer to resume.

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