ESCHER: PARCEL SECTOR CARRYING THE HEAVY LOAD IN 2022
Just as things seemed to be getting back to normal and our industry could finally take a breath, the military conflict in Eastern Europe has again brought certain levels of uncertainty as it is still not entirely known how it will affect the CEP (Courier, Express and Parcel) sector, or how long this new ‘transitional’ period may last. All this is covered in Escher’s Future of Posts Survey 2022.
Despite all the negativity of the last two years, on a positive note, some segments have flourished. 2020 and 2021 were particularly positive for most parcel businesses. People were stuck at home, and online purchasing went through the roof. In 2022 said level of growth has either slowed down or plateaued but is still the main source of revenue for the majority of Posts.
This is the fifth year of Escher’s Future of Posts survey and in some ways confirms the previous years’ trend in that most Posts rely on parcels to remain profitable and that all strategies are starting to fortify around an agile but predominantly e-commerce first customer.
A total of 284 respondents from 91 national post operators from around the world participated this year.
This survey identifies a balance as some Posts aimed to go back to pre-pandemic strategic and services, yet maintain some of the new implementations helping them deal with deal with high parcel volumes, declining letter volumes, and changing customer demands
Escher’s Future of Posts Survey 2022 highlights
- Profitability and revenue growth have improved for the majority of Posts in the last 12 months.
- We have reached the tipping point where many posts have more revenue from parcels than from their mail business.
- Posts are rethinking their retail network expansion strategies and accelerating their delivery network strategies.
- Workforce management is a key focus area for cost reduction in retail and delivery. Improving customer experience will feature heavily in future infrastructure investments.
- The importance of last-mile route optimization is growing and becoming a crucial strategy to reduce costs.
- Posts are investing in infrastructure to overcome their capacity issues.
- Last-mile delivery and digital transformation (similar to last year) are where the Posts plan to make the most significant investments in the coming years.
- While countertop retail is the most common point of sale channel, smart lockers are where most future investments will fall.
- Last year a significant number of Posts said they were not planning to expand reverse logistics capabilities; this year, only a small minority said they did not offer reverse logistics.
Between February and March 2022, Escher’s research partner, Triangle Management Services, conducted an online survey of Postal leaders worldwide. Responses were analysed to identify the re-focussed intentions of postal operators’ strategic and operational plans, post pandemic.
Although certain pressures from last year have relented, current unexpected conflicts have again brought forth a level uncertainty and complexity to the industry and Posts are trying to balance between old and new strategies aiming to satisfy current conditions and demands.
In Escher’s fifth annual edition of the Future of Posts report, 91 national post offices from around the world have provided insights into their operating methods, including key areas of investment, automation strategies, point-of-sale channel selections, and future network plans.