Leading Global Postal Operator Benchmarking: Performance, Strategy and Diversification 2018

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Published: Nov 2018
Pages: 89
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Leading Global Postal Operator Benchmarking: Performance, Strategy and Diversification 2018 - infographic

About Leading Global Postal Operator Benchmarking: Performance, Strategy and Diversification 2018

Global postal operators are experiencing major changes in their traditional businesses, in particular:
– Decreases in mail volumes and revenues from ongoing e-substitution leading to more processes and transactions formerly carried out by mail switching to electronic formats.
– Increases in parcels volumes from the growth of online retail

At the same time many operators are facing considerable pressure to reduce the costs of operations, such as by reducing mail delivery service levels or rationalising post office networks by closing lightly-used outlets in rural areas and relocating those in large, expensive urban sites. However, their freedom to reduce costs is typically limited by regulation, which requires them to maintain a certain universal service level.

In response to these challenges – and opportunities – many postal operators are looking to diversify their activities away from dependence on falling mail volumes. However:
– They are all starting from different places regarding their own domestic market conditions, constraints and opportunities
– They are each following their own strategies with varying degrees of success and fortune in execution.

Postal operators are largely still organised along national lines. However, given the need for expansion away from declining letter mail business, an increased level of international consolidation, along the lines of PostNord combining the Swedish and Danish post offices, is a possibility.

 

What does the Global Post Offce Benchmarking report cover?

The report benchmarks the postal operators of the 10 largest global economies:

1. United States Postal Service (USPS)
2. China Post
3. Japan Post
4. Deutsche Post (Germany)
5. Royal Mail Group (UK)
6. La Poste (France)
7. India Post
8. Poste Italiane (Italy)
9. Brazil Post
10. Canada Post

The report contains:
– Analysis of relevant market trends
– The benchmarks, which cover 33 different metrics grouped into the categories of Scale, Performance, Growth, International Diversification and Business Diversification, each accompanied by commentary and interpretation
– Overall rankings, based on the benchmark scores.
– Case studies of seven of the leading operators, reviewing their context, performance and strategy in detail

The global postal operators covered by case studies are:

1. USPS
2. Japan Post
3. Deutsche Post
4. Royal Mail Group
5. La Poste
6. Poste Italiane
7. Canada Post

 

Post Office Benchmarking Research Summary

Market context and trends

Aggregate mail volumes delivered by postal operators included in this study have decreased by approximately 25% since 2004 and continue to fall at around 3% per year.

At the same time, parcels markets are growing at rates from 4-15% per year, driven largely by internet retail growth.

Postal operators

The combined revenue of the 10 postal organisations analysed in this report is over $400bn. They range in size from Japan Post, the largest, with revenues of $118bn, to India Post, at $1.7bn.

The operators differ significantly not just in their size but also in scope and diversity of operations, performance, rates of growth and international diversification.

Postal operators revenue share by activity

Overall post office benchmarking rankings

DPDHL comes top of our overall postal operator ranking index, followed by Japan Post. This is a function of the large size of both organisations, healthy recent performance and their diversity, with their large non-postal businesses: DHL parcels and logistics and Japan Post financial services respectively

 

Benchmarks

Scale:
– While Japan Post has the largest overall revenue and also profit, this is mainly related to its large financial services business.
– USPS ranks top for mail revenue and DPDHL, as a result of its ownership of DHL, for parcels revenue.
– DPDHL has the most employees while India Post the most post offices. Royal Mail has the fewest post offices – zero – being the only operator not to own its national post office network.
Performance:
– China Post has the highest operating margin while that of loss-making India Post is the most negative
– China Post and DPDHL have the highest revenue per item for mail and parcels respectively.
– Japan Post is top on several other measures including revenue and profit per employee and revenue relative to the size of the economy of its home territory. But, once again this is due to its financial services division.
– Taking just mail and parcels revenue vs size of domestic economy, La Poste and DPDHL come top.
– On mail and parcels items per head of home territory population, the leaders are USPS and Royal Mail, which both have lower revenues per item.
Growth:
– India Post has had fastest overall revenue growth
– China Post leads in mail revenue growth and India Post in parcels revenue growth (from a small base).

International Diversification:
– Deutsche Post leads this category conclusively with over three times more revenue from outside its home country than all the other operators combined.

Business Diversification:
Here there are significant differences, the following being the most notable:
– The large financial services businesses of Japan Post (which give it top ranking for non-mail/parcel revenue), Poste Italiane
– The large international parcels businesses of DPDHL, Royal Mail and La Poste (which has also made the most identified acquisitions in the last seven years)
– However there is a very broad range of other activities represented, including significant logistics businesses, such as DHL and Toll Group – Japan Post’s recent strategic acquisition – Royal Mail’s new e-commerce service businesses and La Poste’s healthcare and digital businesses.
– The least diversified postal operators are the American operators, Canada Post, USPS and Brazil Post, with the latter two having no activities of any size outside their core mail and parcels area, and having made no acquisitions

About this report 2
What does the report cover? 3
What are the sources and methodology? 3
Who is it useful for? 4

Summary 5

Market context and trends 5
Postal operators 5
Overall rankings 5
Benchmarks 5

About Apex Insight 7
Company background 7
Consulting services 7
Related research 7
Research subscriptions 8
Contents 9
List of charts and tables 12
Current situation - revenue by segment 15
Key trends – decreasing mail volumes and revenues 16
Key trends – parcels growth driven by online retail 17
E-commerce growth by country 17
Internationalisation of e-commerce 18
Other logistics activities 20
Financial services 20
Other services 21

Postal Operator Benchmarking 22

A. Scale 22

Total Revenue 22
Letter / Mail Revenue 23
Parcel Revenue 24
Market Capitalisation 26
Profit 27
Mail volumes 28
Parcel volumes 29
Employees 30
Number of Post Offices 31
Scale – overall ranking 32

B. Performance 33

Margin 33
Mail revenue per item 34
Parcel revenue per item 35
Revenue per Employee 36
Profit per Employee 37
Revenue as % of home territory GDP 38
Mail revenue as % of home territory GDP 39
Parcel revenue as % of home territory GDP 40
Revenue per Head of Population in home territory 41
Mail Items per Head of Population in home territory 42
Parcels per Head of Population in home territory 43
Inhabitants per Post Office 44
Revenue per Post Office 45
Performance – overall ranking 46

C. Growth 47

Revenue growth 47
Mail revenue growth 48
Parcel revenue growth 49
Share price movements 50
Mail volume growth 51
Parcel volume growth 52
Profit growth 53
Growth – overall ranking 54

D. International diversification 55

International revenue 55
International revenue as a percentage of total 56
International diversification – overall ranking 57

E. Business diversification 58

Non-Mail & Parcels Revenue 58
Non-mail & parcels revenue as % of total revenue 60
Largest acquisitions 61
Number of acquisitions identified (last 6 years) 62
Business diversification – overall ranking 63

F. Overall ranking 64

Case studies: leading postal operators 65

1. Deutsche Post DHL 65

Summary 65
History 65
Change in revenue mix 66
Diversification Strategy 67
Financials 68
Segment Analysis 68
Key acquisitions 70
League table positioning 70

2. Royal Mail (Post Office Ltd) 72

Summary 72
History 72
Change in revenue mix 73
Diversification Strategy 73
Financials 74
Segment Analysis 74
Key acquisitions 76

3. Le Groupe La Poste (La Poste) 78

Summary 78
History 78
Diversification Strategy 78
Financials 79
Segment Analysis 79
Acquisitions 81

4. USPS 86

Summary 86
Diversification Strategy 86
Financials 87
Segment Analysis 87
Acquisitions 88

5. Japan Post 90

Summary 90
History 90
Diversification Strategy 91
Financials 92
Segment Analysis 92
Acquisitions 93

6. Canada Post 95

Summary 95
History 95
Diversification Strategy 95
Financials 96
Segment Analysis 96
Acquisitions 97

7. PostNL 99

Summary 99
History 99
Diversification Strategy 100
Financials 101
Segment Analysis 101
Acquisitions 102

8. Swiss Post 104

Summary 104
History 104
Diversification Strategy 104
Financials 105
Segment Analysis 105
Acquisitions 106

9. PostNord 109

Summary 109
Diversification Strategy 109
History 109
Financials 109
Segment Analysis 110
Change in revenue mix 110
Acquisitions 111

10. Singapore Post 115

Summary 115
Diversification Strategy 115
History 116
Change in revenue mix 116
Financials 117
Segment Analysis 117
Acquisitions 118

11. Poste Italiane 123

Summary 123
Diversification Strategy 123
History 123
Change in revenue by segment 124
Financials 124
Segment Analysis 124
Acquisitions 126

Charts and Tables

Revenue by segment / % 15
Mail revenue by post office 16
Mail revenue growth 16
Mail revenue trend by post office 16
Comparison of Retail E-Commerce Sales in Major Economies, 2013-4 18
Retail E-commerce Market Size by Country, 2013-214 / US$bn 18
Parcel revenue growth by postal operator 19
Parcels revenue growth of postal operators 19
Benchmark 1– Leading Global Postal Operators Ranked by Total Revenue 22
Benchmark 2– Leading Global Postal Operators Ranked by Mail Revenue 23
Letter / mail revenue as % of group revenue, 2014-2015 (%) 23
Benchmark 3– Leading Global Postal Operators Ranked by Parcel Revenue 24
Parcels revenue as % of group revenue, 2014-2015 (%) 24
Benchmark 4– Leading Global Postal Operators Ranked by Market Capitalisation ($m) 26
Benchmark 5– leading global postal operators ranked by operating profit 27
Benchmark 6– Leading Global Postal Operators Ranked by Mail Items (m) 28
Benchmark 7– Leading Global Postal Operators Ranked by Parcel Items (m) 29
Benchmark 8– Leading Global Postal Operators Ranked by Employees 30
Selected Postal Operators by Number of Employees, 2010-2015 30
Benchmark 9– Leading Global Postal Operators Ranked by Number of Post Offices 31
Selected Postal Operators by Number of Post Offices, 2009-2014 31
Composite scale ranking 32
Benchmark 10 – Leading Global Postal Operators Ranked by Operating Margin (%) 33
Selected Postal Operators by Operating Margin, 2011-2015 (%) 33
Benchmark 11– Leading Global Postal Operators Ranked by Revenue per Mail Item ($) 34
Benchmark 12– Leading Global Postal Operators Ranked by Revenue per Parcel ($) 35
Benchmark 13 – Leading Global Postal Operators Ranked by Revenue per Employee ($) 36
Selected Postal Operators by Revenue per Employee, 2011-2015 ($) 36
Benchmark 14– Leading Global Postal Operators Ranked by Profit per Employee ($) 37
Benchmark 15– Leading Global Postal Operators Ranked by Revenue as % of home territory GDP (%) 38
Benchmark 16– Leading Global Postal Operators Ranked by Mail Revenue as % of home territory GDP (%) 39
Benchmark 17– Leading Global Postal Operators Ranked by Parcel Revenue as % of home territory GDP (%) 40
Benchmark 18– Leading Global Postal Operators Ranked by Revenue per head of population in home territory ($) 41
Benchmark 19– Leading Global Postal Operators Ranked by Mail Items per Head of Population in home territory 42
Benchmark 20– Leading Global Postal Operators Ranked by Parcels per Head of Population in home territory 43
Benchmark 21– Leading Global Postal Operators Ranked by Average Number of Inhabitants per Post Office 44
Average Number of Inhabitants per Post Office, 2010-2014 44
Benchmark 22– Leading Global Postal Operators Ranked by Revenue per Post Office ($m) 45
Composite performance ranking 46
Benchmark 23– Leading Global Postal Operators Ranked by Revenue Growth (CAGR %) 47
Benchmark 24– Leading Global Postal Operators Ranked by Mail Revenue Growth (CAGR %) 48
Benchmark 25– Leading Global Postal Operators Ranked by Parcel Revenue Growth (CAGR %) 49
Selected Postal Operators by Parcel Revenue, 2013-2015 ($m) 49
Benchmark 26– Leading Global Postal Operators Ranked by Share Price Change (3 years, CAGR %) 50
Benchmark 27– Leading Global Postal Operators Ranked by Share Price Change (1 year, %) 50
Benchmark 28– Leading Global Postal Operators Ranked by Mail Items Growth (CAGR %) 51
Benchmark 29– Leading Global Postal Operators Ranked by Parcel Items Growth (CAGR %) 52
Benchmark 30– Leading Global Postal Operators Ranked by Profit Growth (CAGR %) 53
Composite growth ranking 54
Benchmark 31– Leading Global Postal Operators Ranked by revenue outside home country ($m) 55
Benchmark 32– Leading Global Postal Operators Ranked by International Revenue as % of Total Revenue (%) 56
Composite international diversification ranking 57
Benchmark 33– Leading Global Postal Operators Ranked by Non-Mail & Parcels Revenue ($m) 58
Selected Postal Operators by Financial Services Revenue, 2013-2015 ($m) 58
Selected Postal Operators by Other Revenue, 2013-2015 ($m) 59
Benchmark 34– Leading Global Postal Operators Ranked by Non-Mail & Parcels Revenue as % of Total Revenue (%) 60
Benchmark 35– Leading Global Postal Operators Ranked by Largest Acquisitions 61
Benchmark 36– Leading Global Postal Operators Ranked by Most Acquisitions Identified (post 2010) 62
Composite business diversification ranking 63
Overall ranking 64
Evolution of Deutsche Post Revenues by Activity, 1997 / 2006 / 2015 (€m) 66
Deutsche Post Group Financials, 2009-2015 (€m) 68
Deutsche Post Group Financials, 2009-2015 (€m) 68
Deutsche Post Group Financials, 2009-2015 ($m) 68
Deutsche Post Revenue by Segment, 2009-2015 (€m) 69
Deutsche Post Revenue by Geography, 2009-2015 (€m) 69
Deutsche Post Overall Ranking by Item 70
Number of UK Post Offices, 2009-2015 72
Evolution of Royal Mail Group Revenues by Activity, 2003 / 2015 (£m) 73
Royal Mail Group Financials, 2009-2016 (£m) 74
Royal Mail Group Financials, 2009-2016 ($m) 74
Royal Mail Group Revenue by Segment, 2013-2016 (£m) 75
Royal Mail Group Revenue by Segment, 2009-2016 (£m) 75
Royal Mail Group Revenue by Geography, 2009-2015 (£m) 75
Royal Mail Overall Ranking by Item 77
La Poste Group Number of Post Offices, 2009-2015 78
La Poste Group Financials, 2009-2015 (€m) 79
La Poste Group Financials, 2009-2015 ($m) 79
La Poste Group Revenue by Segment, 2009-2015 (€m) 80
Le Groupe La Poste: Revenue Growth, 2006 / 2015 80
La Poste Group Revenue by Geography, 2009-2015 (€m) 81
La Poste Group Revenue by Geography, 2009-2015 (€m) 81
Le Groupe La Poste Acquisitions 2004-2016 81
Le Group La Poste Overall Ranking by Item 85
USPS Group Number of Post Offices, 2009-2015 86
USPS Revenue by Source, 2006 / 2015 86
USPS Group Financials, 2009-2015 ($m) 87
USPS Group Revenue by Segment, 2011-2015 ($m) 87
USPS Group Shipping and Packages Revenue Split ($m) 88
USPS Group Revenue by Segment, 2011-2015 88
USPS Overall Ranking by Item 89
Japan Post Group Number of Post Offices, 2009-2015 90
Shareholding Structure of the Government and Japan Post Group Companies 90
Japan Post Group Financials, 2009-2015 (¥bn) 92
Japan Post Group Financials, 2009-2015 ($m) 92
Japan Post Group Revenue by Segment, 2010-2015 (¥bn) 92
Japan Post Group Revenue by Segment, 2010-2015 ($m) 92
Japan Post Group Revenue by Service Type, 2009-2016 (%) 93
Japan Post Overall Ranking by Item 94
Canada Post Group Number of Post Offices, 2009-2015 95
Canada Post Group Financials, 2009-2015 (CA$m) 96
Canada Post Group Financials, 2009-2015 ($m) 96
Canada Post Revenue by Segment, 2009-2015 (CA$m) 96
Canada Post Revenue by Segment, 2009-2015 ($m) 96
Canada Post Group Revenue by Segment, 2009-2016 (C$m) 97
Canada Post Group Revenues by Geography, 2009-2015 (CA$) 97
Canada Post Overall Ranking by Item 98
PostNL Number of Post Offices, 2009-2014 99
PostNL Financials, 2009-2015 (€m) 101
PostNL Financials, 2009-2015 ($m) 101
PostNL Revenue by Segment, 2009-2015 (€m) 101
PostNL Revenue by Segment, 2009-2015 ($m) 101
PostNL Group Revenue by Segment, 2011-2015 (€m) 102
PostNL Overall Ranking by Item 103
Swiss Post Number of Post Offices, 2009-2015 104
Swiss Post Group Financials, 2009-2015 (CHFm) 105
Swiss Post Group Financials, 2009-2015 ($m) 105
Swiss Post Group Revenue by Segment, 2009-2015 (CHFm) 106
Swiss Post Group Revenue by Segment, 2009-2015 ($m) 106
SwissPost Overall Ranking by Item 108
PostNord Group Financials, 2009-2015 (SEK m) 109
PostNord Group Financials, 2009-2015 ($m) 110
PostNord Group Revenue by Segment, 2010-2015 ($m) 110
PostNord Revenue by Segment, 2010 / 2015 ($m) 111
PostNord Group Revenue by Segment, 2010 / 2015 (Share%) 111
PostNord Acquisitions 2011-2015 111
PostNord Overall Ranking by Item 114
Evolution of Singapore Post Revenues by Activity, 2009 / 2016 (S$m) 116
Singapore Post Group Financials, 2009-2016 (S$m) 117
Singapore Post Group Financials, 2009-2016 ($m) 117
Singapore Post Group Revenue by Segment, 2009-2016, Chart (S$m) 118
Singapore Post Group Revenue by Segment, 2009-2016 ($m) 118
Singapore Post Acquisitions 2011-2016 118
Singapore Post Overall Ranking by Item 122
Evolution of Poste Italiane Revenues by Activity, 2009-2015 124
Poste Italiane Group Financials, 2009-2015 (€m) 124
Poste Italiane Group Financials, 2009-2015 ($m) 124
Chart: Poste Italiane Group Revenue by Segment, 2009-2015 (€m) 125
Poste Italiane Group Revenue by Segment, 2009-2015 (€m) 126
Poste Italiane Group Revenue by Segment, 2009-2015 ($m) 126
Poste Italiane Overall Ranking by Item 127

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