Postal service intelligence provider International Post Corporation (IPC) has released its Global Postal Industry Report 2021, finding a €19.3bn (US$21.7bn) growth in parcel revenue as a result of the Covid-19 pandemic.
On aggregate, total global postal industry revenue reached €442.6bn (US$499.5bn) in 2020, up €20.5bn (US$23.1bn) on 2019 results. The pandemic drove industry growth away from mail revenue and toward parcels; while parcel revenue rose by €19.3bn (US$21.7bn), mail revenue fell €6.1bn (US$6.8bn). Across the 53 posts analyzed, revenue increased by 1.4% on average, down from 5.5% a year earlier. However, social distancing and other pandemic-related challenges pressured profitability.
In terms of parcels volume, lockdowns drove up demand for B2C delivery worldwide, accelerating growth to 15.3% on average in 2020. Most posts reported growth rates well above 10% for the year, while others, particularly those in emerging markets, saw parcel volumes fall as delivery operations were hampered by the pandemic. Meanwhile, many posts reported increasing competition in their domestic parcel markets. On average, parcel revenue increased by 21.0%, making parcels the majority of total revenue for some operators.
The sharp fall in total mail volume was caused by the national border and non-essential shop closures in 2020, which shifted economic activity into reverse. The average decline in mail volume accelerated to 15.9% in 2020, more than twice as fast as in 2019. Most posts delivered fewer items than in the previous year. Meanwhile, the decline in mail revenue accelerated to 4.9% on average while the average mail EBIT margin shrank to 1.1% in 2020. Despite this, some posts were able to address the crisis through efficiency initiatives; while more than three-quarters of posts saw mail revenue decline, more than half saw their mail divisions generate a profit.
More than 18 months into the pandemic, IPC’s report reveals a promising industry outlook. On average, and across the subset of posts that publish interim reports, group revenue was up 10.4% year on year and margins rose to 4.2% in the first half of 2021. Mail divisions regained some lost ground as mail volume grew 2.5% on average, driving up revenue and margins. Additionally, the sustained uplift in e-commerce bolstered parcel operations, causing parcel volumes to grow strongly alongside both revenue and profitability.
Holger Winklbauer, CEO of IPC, said, “Posts around the world have rapidly responded to the huge increase in e-commerce volumes throughout the pandemic. As a result, the postal industry continued to sustain growth in 2020 despite accelerating mail volume declines. As demand for e-commerce delivery remains strong, preliminary results for 2021 show that posts continue to benefit from higher packet and parcel volumes.”