Best and worst firms revealed as UK parcel sector soars

The continued rise of online retail services is driving up parcel volumes and boosting competition in the UK parcel delivery market, with measured parcels across the UK increasing by 8.3% to 3.9 billion items in 2023-24, close to the 4 billion pandemic peak in 2020-21.

However, this increase in volumes is also proving challenging for some, with Evri and Yodel customers the least satisfied with their experience when it comes to contacting firms for help and Amazon and DHL the best performers.

Meanwhile, Royal Mail has clawed back some of the business it lost during last year’s industrial action but concerns about the company’s ability to operate the Universal Service refuse to die down.

That is according to Ofcom’s annual Post Monitoring Report 2024, which sets out data and trends in the postal sector, including people’s experiences of sending and receiving post.

UK addressed letter volumes fell by 9.0% to 6.6 billion items in 2023-24. Despite this continued trend, this year’s research shows that around two thirds (64%) of people say post is important to them for staying in touch with friends and family. Eight in 10 (82%) say there are things they will always need to send by post.

The report also finds that, while on average eight in 10 parcel recipients (78%) are satisfied with parcel firms, two thirds (67%) have had a delivery issue in the past six months. The most common issues experienced are delivery delays (27%), parcels being left in an inappropriate location (23%), the delivery driver not knocking loudly enough (20%), and not being given sufficient time to answer the door (19%).

If someone buys something online and their parcel is damaged or does not arrive, the most common way to seek redress is from the online retailer under consumer law. The sender may then seek redress from the parcel firm, and sometimes a recipient may need to contact the parcel operator.

When comparing individual parcel companies’ performance in handling contacts and complaints from parcel recipients, Amazon (56%) and DHL (55%) secure the highest levels of satisfaction with this process this year. FedEx has slipped to third place, with its proportion of satisfied parcel recipients falling from 58% in 2023 to 52% in 2024.

Yodel performs below average on some aspects of its customer contact processes, contributing to a satisfaction score of 38%, Evri, once again, has the lowest levels of satisfaction. The company has, however, improved on its 2023 performance, closing the gap at the bottom of the table with its satisfaction score increasing from 26% to 32% during the last year.

There are also other signs of improvement from parcels companies in some areas of their customer experience, Ofcom states.

Customers’ satisfaction with the process of contacting the parcel company to discuss an issue or complaint increased from 41% in 2023 to 44% in 2024. Customers also had less cause to complain about a delayed parcel (19% in 2024 vs 23% in 2023) or a parcel not being delivered (16% in 2024 vs 20% in 2023) than they did a year ago.

Ofcom has strengthened regulations to make sure people are treated fairly by parcel companies, and is speaking to companies to understand how they are improving their service.

Parcel operators have made a number of improvements to complaints handling, including better information on their websites; improvements to phone lines and live chat; and introducing options for customers to request an email or call back.

Ofcom said it expects further, sustained and continued improvement, although it remains particularly concerned that disabled consumers and those with limiting conditions are still more likely to encounter difficulties with the delivery process (71%) compared to other people (63%).

The report also looks at Royal Mail’s financial and efficiency performance as the Universal Service provider.

Last year, Royal Mail won back some of the parcel volumes and revenues it lost the previous year because of industrial action. However, the company continues to make a loss; and, while it has made productivity improvements, these are behind expectations.

Ofcom says it continues to have concerns about the longer-term sustainability of the Universal Service, and is progressing work on the future of the service, as well as an investigation into Royal Mail’s delivery performance.