International Post Corporation (IPC), a cooperative association of 24 national postal services from major countries in Europe, Asia-Pacific and North America, has released the key findings from this year’s Global Postal Industry Report.
According to IPC, the postal sector recorded 2.6% revenue growth in 2017, with an acceleration in the first half of 2018 with 4.6% revenue growth year-on-year.
Ongoing e-substitution and e-commerce growth continued to widen the performance gap across business units, with revenue down 2.3% for mail and up 11% for parcels. Profitability remained strong for both divisions, with efficiency initiatives, network optimization and capacity investment set to continue in the years ahead.
Holger Winklbauer, CEO of IPC, said, “E-commerce continues to fuel the industry. Posts are delivering more packets and parcels than ever before. While growth rates ranged widely, more than two thirds of posts saw stable or increasing revenues during the year and most cited parcels and express as a key growth driver.
“Digitization remains the key driver of structural mail volume decline across the industry, though growth in small and lightweight e-commerce packets has helped ease the fall. In 2017, the average decline in mail volume slowed to 4.6% compared to 5.2% in 2016.”
Apart from mail, the three main sources of industry revenue are parcels and express, financial services and logistics and freight.
While mail still represents over 40% of industry revenue, posts continue to pursue growth outside the core. Most are diversifying as close to three quarters have seen their share of mail revenue fall since 2012.
Postal operators are also seeking growth opportunities abroad. For posts with international segments, defined as either revenue generated by subsidiaries abroad or from customers outside the domestic market, international revenue has increased over the past five years and, in 2017, represented close to one quarter of total revenue on average, though shares ranged widely across operators. Most posts have grown international revenue since 2012, with five achieving average annual growth above 10%.
E-commerce fuels growth
Around 10% of retail sales worldwide are now made online, almost half of which are done via a mobile device. Apparel and footwear, media products and electronics are among the items most often purchased online, and food and drink sales are growing rapidly.
In 2017, parcel volumes grew by 14.3% on average, up from 8.4% a year earlier. Most posts also saw parcels revenue improve in 2017, with e-commerce-driven growth for both domestic and cross-border B2C deliveries commonly reported as key growth drivers.
“Despite strong competition, posts worldwide continue to leverage their vast physical presence and dense networks as they innovate, improve and expand their B2C services,” added Winklbauer.
“Many are teaming up with integrators, e-retailers and startups to further bolster e-commerce volumes. Others are introducing same-day shipping, offering real-time tracking and trialling drone, robot and car boot (trunk) delivery.”
The above insights are published in IPC’s publicly available Key Findings report, which provides a distillation of data and analysis included in the full IPC Global Postal Industry Report 2018. The full report is available for purchase by stakeholders outside the IPC membership.