According to preliminary results published by International Post Corporation (IPC), postal operators worldwide saw revenue increase by 3.8% on average in 2021(1) up from 1.4% in 2020.
As the pandemic evolved throughout the year, postal industry growth was driven by strong demand for B2C e-commerce logistics as posts delivered more packets and parcels to online shoppers across the globe.
Following the surge in e-commerce as the pandemic struck in 2020, parcels growth continued in 2021 with some posts reporting that volumes rose by more than a third compared to the prior year.
Holger Winklbauer, CEO of IPC, commented on the results: “The 2021 results show the resilience of the postal sector and its capacity to build on the e-commerce surge. However, cost pressure in the parcel delivery market remains high, in part due to rising fuel prices and labour shortages. Nevertheless, some posts in Europe reported declines in inbound international e-commerce packet volumes in the second half of 2021 as VAT exemptions for low-value goods were removed in the EU in July. The economic crisis and the war in Ukraine are likely to further affect volumes”.
Driven by the growth in e-commerce, some posts now report that parcels account for more than half of total revenue. Posts continued to invest in expanding sorting capacity and automation to meet the growth in e-commerce delivery volumes and further improve delivery times. Many posts have also expanded their parcel pick-up and drop-off solutions, such as parcel lockers, to provide more convenient delivery options for consumers and improve last-mile efficiency.
Competition remained very strong in the dynamic B2C parcel market as delivery companies continued to compete to win new contracts, large e-retailers increasingly invested in their logistics networks, and new players looked to grow their share of the last-mile delivery market.
In the mail segment, e-substitution was the key driver of the structural decline in traditional letter volumes. Many posts reported a decline in total mail volumes in 2021, though some noted a partial recovery in advertising mail as business activity picked up after governments eased COVID-19 restrictions during the year. Other posts reported that declines were in part offset by elections and pandemic-related communications, including vaccination notices.
Throughout the year, posts focused on improving the efficiency of mail operations and adjusted letter rates to sustain their affordable, reliable, one-price-goes-anywhere postal services.
Looking ahead, e-substitution is expected to drive the ongoing decline in mail volume worldwide. Meanwhile, the structural shift from mail to parcels is set to continue as posts look to meet the ever-evolving needs of consumers through providing fast, reliable, convenient, and competitively priced delivery services.
The complete 2021 results as well as results for the first half of 2022 will be presented in the IPC Global Postal Industry Report, which will be published in November 2022. The report will include a comprehensive and detailed review of the postal industry, covering over 50 postal operators worldwide and analysing key market trends. A publicly available summary, the IPC GPIR Key Findings, will also be published in November.
For more information on the IPC Global Postal Industry Report, please visit: http://www.ipc.be/services/markets-and-regulations/market-intelligence/global-postal-industry-report.
(1) Averages for 2019 and 2020 sourced from the IPC Global Postal Industry Report 2021 and based on 53 posts. Averages for 2021 based on an unweighted mean of results of the following 37 posts: An Post, bpost, Canada Post, China Post, Correios Brasil, Correos, Correos de Chile, Correos de México, Croatian Post, CTT Portugal Post, Deutsche Post DHL, Eesti Post, Hellenic Post-ELTA, Hongkong Post*, Iceland Post, India Post*, Israel Post, Japan Post, Latvian Post, Le Groupe La Poste, Lithuania Post, Magyar Posta, Österreichische Post, Pos Indonesia, Pos Malaysia, POST Luxembourg, Posta Romana, Poste Italiane, Posten Norge, Posti, PostNL, PostNord, Royal Mail, Singapore Post, Swiss Post, Thailand Post, United States Postal Service. Posts marked with an asterisk (*) are not expected to publish annual results until after publication of the IPC Global Postal Industry Report 2022 in November; analyses for these posts have been based on the latest periods for which data exists.