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 9,400 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 9,400 companies that employ about 1.1 million workers and generate about $139 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

                                Mar 19, 2024 - Prices Reduced
                                • Courier and messenger services reduced their prices slightly during 2023, according to the US Bureau of Labor Statistics. Employment followed the typical industry cycle during the period, with employment decreasing from January through June followed by significant increases from July through December, according to US Bureau of Labor Statistics (BLS) data. Average wages for nonsupervisory employees increased slightly during 2023, according to the BLS.
                                • The average retail price of diesel decreased about 5 cents per gallon during the seven-day period ending on February 26 according to the US Department of Energy/Energy Information Administration. The small movement in recent weeks, except for a 21-cent increase in mid-February, contrasts sharply with the volatility of the weeks prior to that, according to FreightWaves. Since a 2 cents-per-gallon increase on December 25, 2023, the changes up or down, besides the 21-cent increase, have ranged from negative 4.8 to positive 3.5 cents a gallon. The 5.1-cent move during the seven-day period ending on February 26 was larger than those other recent changes.
                                • US Securities and Exchange Commission (SEC) officials said in late 2023 that the agency's long-anticipated climate rules may scale back some of the most demanding greenhouse gas emissions disclosure requirements that it had initially proposed, according to Reuters news service. Courier and messenger services may benefit if less time and fewer resources need to be committed to meeting reporting requirements. The SEC has proposed requiring publicly listed companies to disclose climate risks, including their Scope 3 emissions when they are "material" and when companies have set reduction targets for them. Scope 3 emissions include greenhouse gases released in the atmosphere from a company's supply chain and the consumption of its products by customers. The SEC says that such information is important for investors' due diligence. Companies pushed back, arguing the data would be hard to produce and legally contentious.
                                • 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.
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