Courier and Messenger Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 10,400 courier and messenger services in the US provide express delivery, by air or ground, of documents and parcels within and between cities. Messenger services provide local delivery of documents and parcels as well as groceries, alcoholic beverages, and restaurant meals.

Volatile Fuel Costs

Firms with a fleet of delivery vehicles incur fuel costs that can fluctuate significantly from year to year.

Stiff Competition

The courier segment is dominated by FedEx, UPS and DHL, which have strong brand recognition, national delivery networks, and are easy to contract.

Industry size & Structure

A typical courier firm operates from 1-2 locations, employs 190 workers, and generates about $25-26 million annually. The average messenger firm operates from a single location, employs 42 workers and generates $2-3 million per year.

    • The courier and messenger services industry consists of about 10,400 companies that employ about 1.1 million workers and generate about $144 billion annually.
    • The courier segment is highly concentrated with the four largest firms representing 91% of revenue. The messenger segment is highly fragmented with the 50 largest firms representing 45% of revenue.
    • Large courier companies include FedEx, UPS, and DHL. Document and parcel messenger services, which operate locally, include Western Messenger (San Francisco), NY Minute (New York City) and Pro Messenger (Dallas). Grubhub and DoorDash are technology firms that use an app and contracted drivers to order food from client restaurants and deliver it to local customers.
    • About 13% of establishments are franchises. Over 70% of franchised establishments are franchisee-owned.
                                Industry Forecast
                                Courier and Messenger Services Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Nov 7, 2024 - Industry Has High Injury Rate
                                • Musculoskeletal disorders are the leading cause of injuries among warehousing and “last-mile delivery” workers, according to the US Government Accountability Office. The transportation and warehousing industry had the highest serious injury and illness rate (3.8 cases per 100 workers) among the 19 sectors analyzed in 2022. The top cause of ailments among workers in the industry was “overexertion and bodily reaction,” which can lead to issues such as back pain. Contact with objects or equipment and slips, trips, and falls were the other two major causes of injuries.
                                • Some city governments are cracking down on food delivery companies due to complaints about scooter, motorcycle, and moped drivers who weave in and out of traffic and move onto pedestrian-filled sidewalks as they race to drop off meals, according to the Associated Press. Officials in Boston, New York, and Washington, DC, are issuing warning letters, seizing illegally registered or driven vehicles, and launching special street patrols to enforce speed limits. Delivery companies have pledged to work with city officials to ensure that all of their drivers operate both legally and safely. Food delivery services had a major resurgence during the COVID-19 pandemic. Most drivers used cars then but that led to increased traffic congestion, prompting a shift to motorcycles and other two-wheeled modes of transportation.
                                • The Biden administration is proposing new climate regulations for heavy-duty vehicles including delivery trucks and school buses. The proposals would cut 10 billion tons of carbon dioxide emissions through 2055, according to the Environmental Protection Agency (EPA). The avoided emissions would be equivalent to more than twice the total amount of US carbon dioxide emissions in 2022. The EPA is also proposing to target other pollutants coming from these vehicles that form soot and smog and can be harmful to peoples’ health. EPA Administrator Michael Regan described the proposed regulations as the “strongest ever” federal pollution standards.
                                • Courier and messenger service industry revenue increased 1.7% year over year and 2.0% quarter over quarter during the second quarter of 2024, according to the US Census Bureau. Courier and messenger service industry employment increased 2.6% year over year in October, according to the US Bureau of Labor Statistics (BLS). Courier services typically reduce staffing levels during the first half of the year after increasing them during the holiday season. Average wages for nonsupervisory employees were unchanged during the first nine months of 2024, according to the BLS. Courier and messenger services kept prices unchanged during the first seven months of 2024, according to the BLS.
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