E-commerce, logistics drive postal growth, IPC report finds

E-commerce and diversification into areas such as logistics are helping postal operatorsovercome the mail business decline and achieve moderate growth, a new in-depth report from the

The international postal industry increased revenues by 1.6% to €422.6 billion in 2012 from€415.9 billion in 2011, according to the IPC Global Postal Industry Report, which analysed theresults of 39 major postal operators around the world.

Herbert-Michael Zapf, President and CEO, IPC said: “Despite falling mail volumes, global postaloperators have experienced overall revenue growth. This is a result of rapid growth in domestic andinternational e-commerce, but also of increased diversification and process optimisation.”

At a global level, mail revenue fell by €1.59 billion last year as volumes declined by 4.3% onaverage, reducing the business segment’s share of industry revenue from 51% in 2010 to 47% lastyear.

In contrast, parcels & express revenues grew 6.4% in 2012 thanks to an overall 1.7% rise involumes. This followed revenue growth of 6% in 2011 and 5.2% in 2010. Growth was mainly due to theboom in online retail e-commerce, and the business area now represents about 17% of industryrevenues. However, the postal industry’s operating profit margin for parcel/express activitiesdropped back to 4.6% in 2012 from 6.2% in 2011 and 6.6% in 2012. 

Postal financial services and logistics/freight were the other two main growth areas for postaloperators last year. Financial services now account for over 17% of postal revenues whilelogistics/freight contributes nearly 11%. Postal retail sales represent 7%.

At a regional level, the postal industry’s revenue growth was strongest in BRIC states and AsiaPacific while average revenue declined in Europe and North America. As a result, Europe’s revenueshare is stable at nearly 35% but North America has declined to 20%.

In Europe, postal revenues declined by a fractional 0.1% last year as regional GDP dropped 0.2%.Mail volumes declined by 4.6% while parcel volumes grew by 1.9%. In North America, revenuesdeclined 1.3% despite 2.7% GDP growth. Mail volumes dropped 3.9% and parcel volumes grew 2.3%. Inboth Asia Pacific and BRICs, postal revenues grew at strong double-digit rates with parcel growthcompensating for lower mail volumes.

While greater internet penetration increased the rate of e-substitution of letter mail through,for example, the digitisation of consumer invoices, it has also had a positive effect on theshipment of physical goods stemming from e-commerce transactions. In addition, a strong correlationremains between the economy and mail and parcel volumes, IPC said.

Moreover, diversification increased significantly between 2010 and 2012, IPC pointed out.Parcels and express, logistics and freight and postal financial services now account for 45.1% ofrevenues, representing an increase of 4.7% since 2010.

Corporate performance was strongly influenced by economic conditions, the degree of internetpenetration and the degree of diversification of postal operators, IPC explained. While organicgrowth was responsible for much of the growth in revenue, merger and acquisition activity alsoplayed an important role: 43 acquisitions were completed in 2012, up from 33 in 2011.

The report also showed that the industry has a high proportion of older workers, with 35% aged50 or older. Women comprise 39% of the total workforce, and hold just over 29% of managementpositions, although the male/female split varies very widely between companies and regions.

Zapf concluded: “Covering 39 postal operators worldwide as well as the major integrators, thenew report provides a review of corporate performance and letter mail and parcel volumes and coversimportant trends such as digitisation, sustainability, acquisitions and divestments, employeeprofile and business diversification.”