Q4 2025. The global delivery sector is maturing and that's actually good news

As the fourth quarter flies by, looking back over the past year reveals a clear pattern: the parcel delivery industry has fundamentally shifted. The age of hypergrowth and expansion-at-all-costs is over. What's replacing it is something more sustainable: discipline, data, and a relentless focus on operational efficiency. For e-commerce businesses and logistics providers, this pivot changes everything about how to compete.

Parcel growth still outpacing retail

The numbers tell a striking story about how retail has transformed. In the UK, looking at 2025 projections, B2C+C2X parcel delivery revenue is forecast to grow 6.8%, while parcel volumes are expected to rise 5.7%, with B2C volumes up 6.4%. This builds on 2024's momentum, when e-commerce revenue grew 4.2-4.5% yet parcel volumes surged 6.3%, creating a gap that reveals deeper structural shifts in consumer behavior.

This disconnect isn't a fluke; it reflects how smaller baskets, recommerce, subscription models, and impulse purchases (particularly TikTok-fueled) are driving more individual shipments even as transaction values remain flat. In plain English, customers are shopping more often but buying less each time, so parcel volumes are booming even though total spending isn't.

The trend intensifies across Europe. According to IMARC Group, the European Courier, Express, and Parcel (CEP) market reached $94.6 billion in 2024 and is projected to grow steadily through 2025 and beyond. B2C parcel volumes remain the fastest-growing segment, driven by continued e-commerce expansion across the continent. In the UK, e-commerce now accounts for 30.4% of total retail sales.

Europe has found cruise control

After the post-pandemic correction, European logistics is entering a sustainable phase. Neither boom nor bust, but measured expansion. The continent’s CEP (Courier, Express, and Parcel) market is forecast to grow steadily, with revenue CAGRs of 2–3.8% through 2030 according to IMARC Group and Mordor Intelligence. Recent analyses from Effigy Consulting and industry news describe a period of steady, manageable growth driven by omnichannel retail, expanding cross-border e-commerce, and greater last-mile and parcel locker infrastructure rather than the unpredictable volatility seen in pandemic years.

The UK stands out as Europe’s digital leader. E-commerce now captures 30.4% of total UK retail sales, with 87% of internet users shopping online. Both the highest rates in Europe compared to an EU average of 77%, according to PromoCode and Eurostat. This marketplace maturity means the UK is highly competitive, with logistics and retail providers innovating in service quality, delivery speed, and flexibility rather than simply expanding.

AI and automation go mainstream

The shift from testing to deployment is unmistakable. Across the continent, major logistics operators are moving AI from pilots to production.

For example, FedEx deployed an AI-powered robotic sorting arm in Cologne, Germany, at the company’s largest German air facility, employing more than 900 people. The robotic arm, manufactured by Hellebrekers B.V., can process up to 1,000 parcels per hour, handling documents and small packages up to 4 kg and routing them to approximately 90 destinations across the network. It’s specifically designed to ensure every label is properly scanned, dramatically reducing human error and allowing staff to focus on more complex tasks. This is the first such AI-powered sorting system in FedEx’s European network and signals a broader rollout strategy.

Maersk has deployed predictive AI analytics that optimize shipping routes and anticipate port congestion, helping improve fuel efficiency and delivery speed

Swiss Post has introduced extensive digital automation. Most notably, robotic process automation (RPA) is used to streamline routine customs clearance workflows. More than 80 RPA processes support the "customs chain," including automated outreach to customers for missing import documentation, digital collection and attachment of customs forms, and online submission of data for customs declarations. For e-commerce and parcel imports, Swiss Post leverages AI models trained on millions of imported consignments to flag whether a shipment is potentially subject to duty, assisting both staff and customers in expedited preparation. While this speeds up data gathering and initial processing, final customs clearance decisions remain under human oversight, ensuring compliance with regulatory standards. These blended digital and human workflows have reduced turnaround times and improved transparency for international shippers and recipients Swiss Post annual report.

Prime Vision and Dell Technologies make sorting parcels faster and cheaper by combining smart AI and local data processing in parcel centers. Their partnership uses the Dell APEX Cloud Platform, which processes parcel and label data right where it arrives, so sorting machines recognize and route parcels instantly without delays from cloud servers. This keeps sensitive data on-site for better security, cuts costs, and makes it easy to roll out updates or new features worldwide. For parcel companies, this setup means fewer errors, less downtime, and a simple upgrade path without having to replace all their current equipment. Read more in the official Dell Technologies case study (PDF)

These deployments reflect a clear industry consensus: AI isn't a future opportunity. It's an operational necessity today.

Structural consolidation is reshaping the market

Several major deals have fundamentally altered the UK and European logistics landscape:

Evri and DHL eCommerce merged in 2025, making Evri the UK’s top parcel delivery company outside Royal Mail. The new Evri Group delivers over 1 billion parcels and 1 billion business letters a year, combining Evri’s courier network with DHL’s premium van delivery (now called Evri Premium). DHL’s minority stake brings international reach and more out-of-home access, cementing Evri as the UK’s leading independent B2C and C2X operator.

In April 2025, InPost bought Yodel for £106 million, becoming the UK’s third largest parcel network. 

Meanwhile, DHL is investing €2 billion by 2030 to expand its global healthcare logistics capabilities. The company is focusing half of this investment on the Americas, with a quarter each for Asia-Pacific and EMEA. The funding is aimed at expanding cold chain capacity, building new Pharma Hubs, upgrading packaging, and commissioning more temperature-controlled vehicles. DHL’s goal is to grow its life sciences and healthcare logistics business from €5 billion to €10 billion in annual revenue by 2030, in response to growing demand for pharmaceuticals, biopharma, and advanced therapies.

Finally, Posti Group (Finland) completed its IPO on Nasdaq Helsinki in October 2025, debuting at a market value of about €303 million. As one of the leading parcel, fulfillment, and logistics providers serving Finland, Sweden, and the Baltic region, Posti's public listing marks a key step as it expands its reach and competes for more cross-border and e-commerce business.

Disruptions and challenges persist

Despite the positive momentum, real headwinds persist:

Canada Post workers launched a nationwide strike on September 25, 2025, halting almost all mail and parcel delivery across the country. This was their second major strike in two years, caused by disputes over pay and government plans to cut door-to-door delivery and close post offices. As a result, many retailers and shippers had to quickly switch to UPS, FedEx, DHL, or Purolator to keep orders moving.

European last-mile delivery faces ongoing challenges. Wages, fuel, and energy costs are rising, while a driver shortage. Over 426,000 unfilled HGV driver positions continue to put pressure on carriers, with vacancies projected to exceed 745,000 by 2028 without significant recruitment efforts.

For EU and UK businesses, air freight remains unpredictable. Demand for Asia–Europe shipments is rising, as carriers move capacity away from the US and toward Europe, driven by new US tariffs and changes to import rules. The result: higher rates, shifting schedules, and more uncertainty for European importers relying on fast flows from Asia.

Out-of-Home delivery gains traction fast

The rise of out-of-home (OOH) delivery represents one of the most significant structural shifts in e-commerce logistics:

Geopost reached 140,000 out-of-home points across Europe in October 2025, operating 100,000 parcel shops and 40,000 lockers across 28 countries. Today, 94% of Europeans live within 10 minutes of a pickup point. Out-of-home volumes grew by 26% year-over-year, and cross-border OOH parcel flows jumped 44%, all pointing to the surging demand for flexible, convenient delivery options.

Out-of-home (OOH) delivery remains a small but fast-growing share of Europe’s B2C parcel market. According to Geopost’s 2025 E-Shopper Barometer, 46% of regular online shoppers in Europe now prefer OOH options, up 15 points since 2019. This shift reflects consumers’ need for convenience and flexibility, choosing lockers and pickup points that fit their schedule. Expanding parcel lockers and PUDOs helps carriers lower last-mile delivery costs and emissions, while giving retailers and shoppers more delivery choice.

Category growth stories. Digital driving demand

The UK e-commerce landscape reveals winners and losers shaped by digital consumption trends:

Beauty is the fastest-growing category in UK e-commerce. TikTok Shop is now the UK’s fourth-largest beauty retailer. This growth, fueled by creator-led videos and viral trends, has helped new beauty brands reach Gen Z shoppers at scale. Social commerce as a whole is set to more than double in the UK from £7.4 billion in 2024 to £15.7 billion by 2028, with beauty accounting for the biggest share.

Sports and DIY are growing faster than the wider market in the UK, thanks to strong and steady demand for home improvement and outdoor activities; see Volo Commerce’s product category review and Search Hog market summary. Fashion, after a stretch of volatility, has stabilized as retailers sharpened multichannel strategies and inventory management, as covered by Wonderful’s ecommerce update. Electronics and grocery sales remain high, but nowadays beauty, sports, and home-focused products set the pace for growth, a sign that digital retail keeps evolving around consumer lifestyle shifts.

Global air and cross-border logistics rebound

Despite headwinds, international logistics is recovering with strategic capacity investments:

UPS has added more flights and bigger planes across Asia Pacific, with new and expanded routes linking Southeast Asia and India to Australia and China. Now, for example, UPS flies five times a week between Shenzhen and Sydney, and has doubled cargo space between Hanoi and Shenzhen by deploying larger aircraft. These improvements directly support high-growth sectors like healthcare, tech, and manufacturing, giving businesses across Asia better speed and reliability. Read the UPS press release or this FreightWaves summary.

Air cargo demand has bounced back across Asia Pacific, even amid tariff uncertainty, with sectors like healthcare and electronics leading the growth (Cargo Facts Asia 2025). Carriers are reshuffling their networks and investing in new routes and fleet upgrades to keep up with shifting global trade policies (Metro Global analysis). This shows how the industry is building flexibility, even when regulations and tariffs are in flux.

A mindset shift. Efficiency over expansion

Growth has normalized, not vanished: Europe’s parcel market is set for steady ~3–4% annual growth rather than hypergrowth.

Carriers are winning by making networks leaner and smarter. Out-of-home (OOH) delivery keeps surging, with 140,000 pickup points live and 94% of Europeans within 10 minutes of one; 46% of regular online shoppers now prefer OOH.

The market is consolidating into full-service platforms, prioritizing reliability, coverage, and cost per stop over raw footprint. 

In short, the winners are those who lower cost-per-shipment and raise delivery certainty, not those who add the most trucks.

The takeaway: Maturity creates opportunity

Europe and the wider parcel market have moved from hypergrowth to low-to-mid single-digit, steady expansion, signaling a shift from footprint grabs to disciplined operations.

• Operators are prioritising capability over capacity. AI and automation are moving from pilots to production (FedEx’s robotic sorting; Maersk’s predictive routing; Swiss Post’s RPA/AI) to reduce errors, cut costs, and improve service quality.
• Consumer behaviour and network design are converging around out-of-home delivery (140k access points; 94% of Europeans within 10 minutes; 46% of regular e-shoppers preferring OOH), which supports reliability and cost control.
• Market consolidation (Evri + DHL eCommerce; InPost + Yodel) favours integrated, full-service models that blend home delivery, lockers, and cross-border capabilities.
• Net result: winners invest in integration, data, and automation to raise delivery certainty and lower cost-per-shipment. Efficiency over expansion

The global delivery sector has matured. Growth rates have normalized, competition has intensified, and the easy gains are behind us. But maturity is not stagnation; it's the foundation for sustainable, profitable business models.

Consumers empowered with better tools (real-time tracking, flexible delivery options, carbon footprint visibility), AI-optimized operations, and new cross-border solutions are reshaping what "growth" really means. Instead of volume-driven expansion, the winners are those who deliver superior service, transparent operations, and integrated experiences across channels.

For e-commerce businesses and logistics providers, one might suggest: invest in capability, not just capacity. Focus on integration and data. Embrace automation to improve margins, not just speed. And recognize that the industry's next chapter - built on efficiency, trust, and sustainability, may be less dramatic than the last, but far more durable.

The delivery sector isn't slowing down. It's just getting smarter about how it grows.