IPC – parcel growth offsets plummeting mail

According to the International Post Corporation (IPC), despite decline in letter mail volumes, parcels are making industry revenue and profitability ‘robust’ as postal companies focus on growth, efficiency and diversification.

Released yesterday (30 November), the “IPC Global Postal Industry Report – 2017 Key Findings” showed “continued though slightly slowing growth for the postal industry”.

The IPC said in a statement: “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.”

Steady growth in demand for online cross-border retail has continued boosting demand for worldwide parcel deliveries.

In the full year 2016, global parcels and express revenues grew by an average of 6.5%. Volumes grew by 7.8% in the same period. While international items currently amount to less than 20% of total parcel volumes, many operators around the world expect strong growth in this segment in the near 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.”
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