When most people follow the recent headlines about global geopolitical shifts and agreements affecting trade, they imagine big-ticket items – steel, automobiles or agricultural goods – taxed at the border. The changes and associated uncertainty are already impacting commerce goods, manufacturers and merchants, and global supply chains. But the ripple effects go beyond factories and farms.
Postal operators are already facing significant changes due to international mail and parcel volumes. National postal services that have built business models around high volumes of e-commerce shipments are scrambling to adapt. These changes playing out now will force postal agencies to reconsider rate structures, invest in logistics efficiency and potentially shift volume to private couriers outside the Universal Postal Union (UPU) network – the traditional post-to-post model.
Over the past five years, organizations have weathered a cascade of systemic shocks, including a global pandemic, geopolitical conflicts, persistent inflation, fractured supply chains, escalating trade tensions and the generative AI revolution, among others. The new shifts pose even greater disruption to an industry already facing existential threats: fierce competition from non-traditional players, reduced pricing power, shifting parcel characteristics and delivery preferences, volatile volumes, and retailers and marketplaces insourcing more of their own e-commerce deliveries.
Resilience will be the key to navigating global uncertainty. But today, true resilience demands more than traditional risk management; it requires leveraging disruption as a jumping off point for innovative, long-term, profitable growth.
Challenges beyond costs
Managing cost pressures that can come with changes to tariff structures and increased costs in global trade are one part of the challenge, with another being adaptations required on the data and documentation processing side with the Harmonized Tariff Schedule (HTS) codes applying to all countries and postal agents. These data changes can further impact the volume and speed of transfers, as all mail carriers will be required to provide information about the packages to customs and border protection agencies. We are likely to see a switch to third-party logistics (3PLs) and the implementation of more shipping software to automate processes. These shifts in the aggregate pose the potential to in effect equalize data requirements across posts and the commercial integrators.
Additionally, the ‘de minimis’ exemption rules will no longer apply to low-value goods shipped through couriers, freight companies and postal shipments – amplifying volume shifts across all shipping channels, not just for the USA. There are already similar calls across Europe calling for introduction of ‘handling fees’ on foreign e-commerce companies to mitigate a tremendous wave of goods potentially entering EU markets as global shipping lines re-adjust.
Impact on the worldwide postal system
Our Accenture research shows postal and parcel industry total revenues have surprisingly declined by 2.4% since 2022, against a backdrop of 9.4% positive global e-commerce growth. Particularly alarming is the fall in earnings before interest and taxes (EBIT) margin by nearly 50% from over 6% in FY 21 to about 4% in FY 24 due to inflationary, efficiency and cost pressures and a shift toward low-yielding product mix in parcels.
At the center of all of this are small businesses and consumers. E-commerce sellers who built their businesses on global reach and razor-thin margins are watching costs rise and delivery timelines stretch. Buyers, accustomed to competitive prices and free international shipping, are noticing higher checkout fees and slower deliveries.
Major retailers and platforms are increasingly shifting fulfillment centers closer to their customers, accelerating a trend toward regionalized supply chains – and using increasingly non-traditional logistics players. While this may ultimately result in more stable logistics, it raises questions about global accessibility and the viability of small exporters competing with behemoth marketplaces.
UPU national post-to-post shipping is generally cheaper than commercial shipping and offers an affordable, easy way for consumers and small businesses to ship their products without paying duties upfront in what is known as DDU (Delivered Duty Unpaid). Those advantages may now potentially be lost, leveling the field with the commercial carriers, with fee structures imposed and requirements for more documentation and HTS code changes.
For developing countries, cost increases and processing complexity risk could widen the digital trade divide. Many smaller economies rely on affordable international shipping to support micro-exporters and artisans. As trade patterns shift, they might face more challenges in accessing global consumers and markets.
A tipping point for the global postal order?
These changes may mark the beginning of a broader realignment in global postal cooperation. What was once a universal, multilateral system grounded in mutual benefit is now bending under the weight of geopolitical shifts. Postal operators must now act more like commercial logistics firms, adapting to fragmented policies and competitive pressures. Key opportunities include:
- Expanding into value-added services: Posts can go beyond core logistics to offer end-to-end supply chain services, including third-party logistics (3PL) and warehousing. They can also help small exporters adapt by offering bundled services and new trade routes into less restrictive markets.
- Leveraging arbitrage opportunities: Countries with more favorable agreements could become new hubs for exports, benefiting local postal services and entire economies.
- Capturing volume from commercial carriers: As data and documentation requirements level across posts and integrators, postal services could attract shippers seeking cost-effective options.
- Building regional delivery networks: Rising costs create incentives to develop stronger intra-regional networks, where posts can play a leading role.
- Shifting to ocean freight and BSAs: Posts can coordinate ocean freight and block space agreements to lower transportation costs compared to air cargo.
- Acting as new supply chain orchestrators: Posts can position themselves as end-to-end logistics coordinators, helping manage customs, documentation and delivery through a network or platform of multiple parties.
The question is not whether postal networks can adapt – but how the original vision of universal, affordable cross-border mail can be reinvented. For now, disruption has pulled the global postal industry into a new paradigm – one defined less by cooperation and more by competition.
Strengthening resilience
Our recently published Resilience Index, based on proprietary analysis of more than 1,600 of the world’s largest companies across critical dimensions of resilience, found the gap between strong and weak companies is wider than ever. In fact, less than 15% of companies on the index have been shown to consistently achieve long-term profitable growth in today’s difficult business landscape.
To be as successful as this small set of leaders, posts must redefine resilience as being balanced across the four key pillars of technology, commercial, people and operational. Here’s how focusing on these key areas can help companies anticipate and respond to volatility:
- Operational resilience: Focus on infrastructure adaptability, process optimization and supply chain resilience to drive strategic changes in sourcing and procurement. Promote cross-sector collaboration and public-private partnerships.
- Technology resilience: Modernize legacy technology and systems paired with a shift to the cloud. Embed autonomous AI agents across functions to continuously monitor real-time data and optimize decision-making. And accelerate AI and automation efforts to modernize services, reduce manual work and drive organizational productivity paired with cybersecurity.
- Financial resilience: Adopt a mindset shift to view cost management as cost and productivity reinvention, focusing on where technology, data and AI can be a partner for growth. Review fiscal policy and identify and prioritize reinvestment based on value creation.
- People resilience: Reinvent ways of working, operating and serving by implementing innovative workforce recruiting and training architectures for an agile and sustainable workforce. Prioritize upskilling, reskilling and modernizing the workforce.
A glass half full
The recent global shifts upend the cheap and easy cross-border shipping model we have been used to. For some, this competitive and fragmented landscape will mean consolidation and reinvention; for others, it could spell a steep decline in global mail relevance unless they adapt quickly. All postal operators will be forced to modernize to compete.
However, uncertainty also presents a window of opportunity, which will vary significantly depending on the ability to build and maintain resilience. Posts must move quickly, strategically and with strong logistical support to set themselves up for the future.
About the authors
Anita Puri, global public service lead at Accenture, leads a team working in over 30 countries that brings together capabilities from the company’s network of industry strategy, consulting, technology and operations services to help its clients transform, innovate and achieve their objectives.
Mark Briganti, post and parcel industry practice lead at Accenture, has extensive experience spanning 20 years with the company providing strategy and IT consulting services to a wide range of postal clients around the world.