IPC: the postal industry continued to sustain growth in 2020
Pandemic-driven uplift in e-commerce volume continues to drive postal industry growth, according to the IPC Global Postal Industry Report 2021 Key Findings, published today.
Holger Winklbauer, CEO of IPC states: “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”.
Uplift in e-commerce drives industry growth in 2020
On aggregate, total postal industry revenue reached €442.6bn in 2020, up €20.5bn on 2019 results. The pandemic-driven uplift in e-commerce was the engine of industry growth as rocketing volumes saw parcel revenue rise €19.3bn. In contrast, mail revenue fell €6.1bn as lockdowns saw business activity slow and e-substitution accelerate. Across the 53 posts analysed, revenue increased by 1.4% on average, down from 5.5% a year earlier. But social distancing and other pandemic-related challenges pressured profitability.
Parcels volume and revenue increase strongly
With lockdowns driving up demand for B2C delivery worldwide, parcels volume growth accelerated 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 report increasing competition in their domestic parcel markets. Parcels revenue was up 21.0% on average and parcels now represent the majority of total revenue for some operators.
COVID-19 further accelerates mail decline
As government-imposed lockdowns shuttered all but essential stores, closed national borders and shifted economic activity into reverse, total mail volume fell sharply in 2020. 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. But amid a crisis, ongoing efficiency initiatives helped many posts control costs: while more than three quarters of posts saw mail revenue decline, more than half saw their mail divisions generate a profit.
Revenue growth and margins improve in H1 2021
More than 18 months into the pandemic, the industry outlook looks promising. 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: mail volume grew 2.5% on average, driving up revenue and margins. And the sustained uplift in e-commerce bolstered parcel operations: parcel volumes grew strongly and both revenue and profitability improved in the period.