LONDON--(BUSINESS WIRE)--Technavio analysts expect the same-day delivery market in the US for the period 2015-2019 to exceed USD 987 million, growing at a CAGR of over 90%, according to their latest report.
Same-day delivery services are on the rise and are expected to continue growing. The growth of the e-commerce market in the US is expected to push the same-day delivery market to a new high. The revenue from the e-commerce segment has been growing by 40% annually. The growth of smaller players such as Ontrac and Eastern Connection focusing on specific regions are capturing the market share from Amazon, NewEgg, and many other high-volume e-commerce companies. Same-day delivery and customer satisfaction are the key performance indicators for these carriers in some of the major metropolitan cities.
According to Sharan Raj, lead analyst at Technavio for transportation and distribution research, “In addition, the demand for priority e-commerce trade is also increasing, owing to the overall growth of the market. This growth in the economy will also drive the growth in the same-day delivery market.”
Technavio’s lead transportation and logistics market research analysts have identified the following three factors that will drive the same-day delivery market in the US:
- Growth in e-commerce market
- Growth in economy
- Increased value-added services
Growth in e-commerce market
Growth in urbanization and increased disposable income of consumers have had a direct impact on the retail sector, which is witnessing the expansion of well-organized retail spaces. This is especially true for e-commerce, which is growing rapidly in most of the regions because of the increased adoption of the Internet and mobile services. Global B2C e-commerce sales are expected to witness an increase of 11.4% annually.
The e-commerce market is a high-volume-based sector, and sales are expected to exceed USD 2 trillion by 2018. The growth in the e-commerce industry is expected to fuel the growth of the market during the forecast period. “It will also fuel intense competition in the same-day delivery services market as the pricing pressure increases,” says Sharan.
Growth in economy
The US is the world's largest economy in terms of GDP. In addition, its GDP in purchasing power parity is among the highest across the world. The high economic growth is a result of the growth in industries in the US such as clothing, manufacturing, FMCG, IT and electronics, and food and retail.
These industries are also providing online services, which have become a major source for vendors to increase their customer bases and, hence, make more revenue. Thus, growth in these industries will increase the demand for same-day delivery services, thereby driving the growth of the market during the forecast period.
Increased value-added services
Currently, the vendors in the same-day delivery market in the US focus on providing different types of value-added service such as the assortment and grading of products, packaging, MIS services in the logistics supply chain, online tracking of parcels, mobile tracking applications, message and e-mail alerts, hub-to-spoke collection centers, and other legal formalities necessary in the process.
There are very few players in the market that provide one-stop solutions. The market is witnessing a trend by which shippers prefer third party logistics (3PL) providers that provide a one-stop shipping solution and avoid the tediousness associated with outsourcing different tasks to different vendors. Hence, this factor is expected to drive the market during the forecast period.
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