Postal sector growth fuelled by parcels

The “IPC Global Postal Industry Report – 2017 Key Findings” has indicated that despite ongoing mail volume decline, industry revenue and profitability remain “robust” as posts continue to focus on growth, diversification and efficiency.

Released today (30 November), the Key Findings demonstrate “continued though slightly slowing growth for the postal industry”.

In a statement sent to Post&Parcel today, the International Post Corporation (IPC) said: “After reporting 2% revenue growth in 2016, the industry recorded 1.4% growth in the first half of 2017. The performance gap between business units widened in H1 2017 compared to H1 2016: on average, mail revenue declined 1.3% while parcels revenue increased by 11.4%. Operating margins remain solid for both divisions.”

The IPC also noted that a steady growth in cross-border online retail has continued to boost demand for parcel delivery services worldwide.

Over the full year 2016, parcels and express revenue increased by 6.5% on average, against a 7.8% volume increase year-on-year.  Furthermore, while international items currently represent less than one fifth of total parcel volumes on average, many operators report increases in cross-border deliveries and expect strong growth in the future.

Holger Winklbauer, CEO of IPC, commented: “Fuelled by the rise in e-commerce volume, the parcels and express segment remains the postal industry’s key growth area. Increasing demands from online shoppers for faster, cheaper and more convenient deliveries as well as returns remain important challenges for the industry, as does growing competition in the delivery market. But at the same time, it offers many opportunities. Though mail remains the industry’s core revenue source, posts continue to diversify, either by investing in other business areas or by acquisitions, joint ventures or partnerships, both domestically and abroad.”

Winklbauer added: “As the mail share of industry revenue continues to decline, posts are strengthening their positions in other segments. Posts are increasingly investing in new and existing assets to foster future growth: from modernising mail operations to buying innovative start-ups. Many posts have looked to acquisitions to gain firmer footholds in new business areas and international markets. Within the parcel delivery market, posts are leveraging their trusted brands, strong expertise and nationwide networks and are looking to grow their share of both domestic and cross–border markets.”

The Key Findings report provides a “distillation” of data and analysis included in the full IPC Global Postal Industry Report 2017.