Postal industry heads for dynamic new era, IPC chief predicts
International postal operators will have become parcel-focused businesses with new growth opportunities but also facing strong competition from private rivals, new entrants, retailers and technology firms by 2025, according to IPC chief Holger Winklbauer.
The global Courier, Express and Parcels market is set for strong growth in the coming years, driven primarily by e-commerce and in particular from Asia, he told the POST-EXPO 2018 conference in Hamburg yesterday in a presentation entitled ‘The path towards 2025’.
In general, Posts are well-positioned as they continue to deliver the bulk of the world’s parcels, with a 70% share in 2017 compared to 16% for integrators and 14% for other companies, according to IPC figures. In particular, cross-border parcels are well suited to postal networks, with 84% of such parcels weighing less than 2kgs, and 40% having a value of under $25.
But the picture will change, Winklbauer warned. “In 2025, the market will be fully deregulated with multiple competitors,” he predicted. “The postal industry really has to think about the future.”
Last-mile delivery competition is already intense today as technology eliminates barriers and brings new forms of competitions, he explained. For example, new entrants have no legacy structures, and are lean, entrepreneurial and data-rich compared to traditional postal operators.
Moreover, e-retailers and technology companies are profiting from strong brands, with Amazon setting the overall standard, Winklbauer commented. At the same time, asset-light or asset-free players such as Uber and Alibaba are disrupting their industries.
For its part, the package industry’s traditional sender-focused business model is changing towards a consumer focus, with buyers (recipients) having a choice of delivery options in terms of time, place and price. In parallel, postal operators can take advantage of e-retailers’ deep knowledge of their customers to build consumer-focused businesses, he said.
Citing IPC’s 2018 survey on online buyer wishes, Winklbauer pointed out that consumers want a simple and free delivery process, with more functions to offer choice, but it is less important for them who actually delivers their parcels.
Asked whether the postal industry would in future be a ‘cluster of operators’ or head towards vertical integration, Winklbauer commented that vertical integration offered a “huge opportunity” for operational cooperation between postal companies but any solutions would have to be very flexible to take account of different market and customer needs.
In response to a question from UPS Europe public affairs director Mark van der Horst, the IPC chief said he did not believe consumers would be loyal to postal operators in future, so customer service could be a differentiator. For international shipments it was even possible that specialist customer service providers using global databases could emerge in future.