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Global eCommerce Gains Mean Big Parcel Volumes

Date: February, 2012 --

One of the big stories doing the rounds at the recent Triangle World Mail and Express Americas Conference in Miami were the domestic and international parcel numbers, and their impact on postal operations. Those parcel numbers are also a warning for anyone doing cross-border mailing and shipping: the address is getting more valuable as the parcel’s contents similarly increase.

Volumes of parcels in the pre-Christmas and Christmas gift giving countries of Europe and the Americas hit new records, all apparently driven by e-commerce sales increases.  In the UK the company NetDespatch, an e-commerce software company that offers warehouse dispatch tools, noted a 50% increase in online traffic over a year ago.

That would serve to support the claim of Hermes, a private courier in the UK, of a 40% increase in parcel traffic year on year, with new records set on 16 of the first 20 days of December 2011.

The German catalog association reports that 2011 e-commerce and catalog sales at Christmas reached €6.8 billion, up nearly 14%.   Of that amount, some 65% of sales (€4.4 billion) were made online, an increase of 22%.

This increase in primarily e-commerce-based traffic was encouraged by two more widespread offerings, primarily but not exclusively, in the US.  According to the National Retail Federation, in the US between Thanksgiving and Christmas, 92 percent of e-commerce sites offered free shipping. And more companies were also offering free returns. UPS expected to receive over half a million returns on the Tuesday after Christmas, an increase of nearly 8% over the prior year.

This is not just seasonal. USPS data for the year ending in November discloses that inbound international parcel volume was up 88% in the last fiscal year.  And it’s not just about the US and Europe.  As long ago as 2010, the CEO of Japan Post was telling the industry in PostExpo in Copenhagen that e-commerce shipments accounted for 13% of all internationally bound express products from Japan. In fact 73% of Japan Post's top 30 customers were mail-order and e-commerce merchants.

What are we seeing in the international postal market?  Data Services’ sources at the Global Address Data Association (GADA), which tracks work at the Universal Postal Union for us, have disclosed that the UPU is studying establishing a rate for prepaid parcel returns services between countries.  The USPS already has this as a domestic service. It is only available, however, to large shippers.

Whether the posts of the world will offer the service only to big shippers remains to be seen, but we certainly believe it will encourage more international parcel traffic.  GADA tells us that research in Europe consistently shows “ease of returning an order” ranks with “Customs” and “certainty of delivery” as consumer reasons not to order across borders.

More international traffic on your part will mean a need to be even more careful with your database. The address on your parcel increases in value with its contents, and of course delivery will impact the loyalty of your customer.  In short, the addresses of your customers are more valuable than ever. Be sure to utilize Data Services full suite of Global Data Processing Services to help you get them correct.