The delivery of packages in the last mile has become a fierce battlefield in Spain. The competition to offer increasingly fast and economical shipments has unleashed a descending spiral of prices and margins that threatens the viability of the sector.
The parcel operators compete eroding their margins in order to win or not lose customers. This price war has its origin in the rise of e-commerce and in the consumer’s expectation to receive their purchases fast and No extra cost.
Why is it important. Great platforms such as Amazon, Temu or Shein have normalized free and ultra -grape delivery as standard, forcing the entire market to match this value proposition.
Online stores now use shipments as a commercial weapon, especially in promotional periods, even if it implies delivering at zero cost. That is, they assume it as an operational expense or have an impact indirectly. It is another leg of its commercial strategy.
In figures.
- The parcel sector managed 1,014.3 million shipments in 2023.
- Is A 15.4% increase compared to the previous year and 80% more than in 2019.
- However, income only grew by 7.2%, reaching 6,050 million euros.
- This means that the average income per package fell around 7% in a single year.
The pressure of the giants. Behind this crisis are, to a large extent, Marketplaces global and their aggressive strategies. Amazon has built its own cast network in Spain (Amazon Logistics), relying on small collaborating and particular companies that distribute with their cars.
This model has allowed you to offer ultra -grape distributions at low cost, but it has meant a small earthquake for the rest, which have seen how the one who was a client is now competition.
The context. Next to Amazon new Asian actors such as Temu and Shein have broken, whose price policies are changing the market as Aliexpress already advanced. They offer free or very economical shipments despite the fact that their products travel from China thanks to subsidizing the cost thanks to logistics agreements and their enormous volume, in addition to benefiting from certain exemptions now in danger.
At the same time, the operating costs are triggered: the fuel has come to rise more than 25% – although it has fluctuated a lot -, The minimum wage has grown by 32% between 2019 and 2024, and environmental regulations They demand investing in more ecological vehicles.
And now what. The sector is in a dilemma: continue with unsustainable low prices or reinvent your model charging what the service really is worth it. Some operators have already announced Rate ups for 2024 (as DHL Express), while others seek solutions in consolidation by mergers.
Recent experience shows that “delivering everything, to all, the next day and free” is not a lasting business model. The sector is verifying that no more volume means more benefit.
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Outstanding image | Claudio Schwarz in Unspash
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