Postal Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The postal services market is estimated to register a CAGR of approximately 1% during the forecast period. The spreading of COVID-19 has forced nations to suspend public activities, changing how governments, corporations, and people see the postal system. When more people are required to stay at home to stop the virus from spreading, posts are becoming more and more recognized as crucial service providers.

Key Highlights

• The COVID-19 outbreak restrained the postal services market in 2020 as governments imposed lockdowns and restricted the movement of people and goods to contain the transmission. The pandemic drove industry growth away from mail revenue and toward parcels. According to the International Post Corporation (IPC), the parcel revenue rose by EUR 19.3 billion (USD 21.7 billion), while mail revenue fell by EUR 6.1 billion (USD 6.8 billion) in 2020.
• Over recent years, the postal service industry has suffered disruptions from the internet and digital industries. The traditional core mail delivery business is declining as communications move online. Meanwhile, the industry also faces fierce competition in the rapidly growing e-commerce parcel market. As a result, postal and mailing businesses are shifting from state-owned monopolies to commercial companies with diversified portfolios.
• Currently, some of the top postal service companies across the world include the US Postal Service (USPS), Deutsche Post DHL (Germany), La Poste (France), and Japan Post.
• The demand for postal and mailing services depends on transaction volume and corporate spending on direct marketing. The profitability of individual companies depends on the efficiency of their operations.
• Some of the largest postal and mailing markets are China, the United States, the United Kingdom, France, Germany, and Italy. High-growth markets include Canada, India, Portugal, and Singapore.
• In 2021, the leading markets for postal and courier activities worldwide were Germany, the United Kingdom, France, Italy, and the Netherlands. In the future, the adoption of data analytics, technology development, and the use of automated and electric vehicles may positively impact the market. Factors that could hinder the growth of the postal services market in the future include workforce shortage, etc.

Postal Services Market Trends

E-commerce Opens Opportunities for Postal Services

E-commerce represents a tremendous opportunity for postal services as consumers become increasingly comfortable ordering items online from emerging e-commerce platforms, and traditional brick-and-mortar outlets are also transitioning to digital environments. As the volume of online sales increases, e-commerce providers are seeking cost-effective channels for the delivery and collection of purchased items. Postal services, with their long-established national networks and experience in last-mile delivery, are emerging as effective partners in this regard. In Kenya, for example, a partnership between online marketplace Jumia and the Postal Corporation of Kenya enables online shoppers to collect items they purchase on Jumia from their nearest post office.

However, many global postal services organizations are not equipped to take advantage of this growth in e-commerce. While B2C eCommerce is growing at a global rate of 17%, parcel volumes among postal services organizations have been growing at less than 5%. Part of the issue is the low adoption of digital technologies as core business and innovation drivers among low-performing postal services organizations. Where digital adoption is high, innovations inevitably emerge. The launch of mPost by Kenya’s postal services, for example, has turned every mobile phone into a formal postal address, enabling people to access letters and parcels from anywhere in the country.

United Kingdom Boost the Postal Delivery Service by Drones

The COVID-19 epidemic is redefining how much the post and parcel sector needs autonomous delivery systems.

United Kindom: In the coming three years, Royal Mail will establish 50 new "postal drone routes" as part of its increased usage of drones for delivery. The move, which is subject to Civil Aviation Authority permission, would give rural communities speedier and more practical services thanks to cooperation with the logistics drone business Windracers. The Isles of Scilly, Shetland Islands, Orkney Islands, and the Hebrides are among the initial destinations for the new service. For the next three years, Royal Mail said it plans to utilize up to 200 drones, and eventually more than 500, to service every part of the UK. Four drone tests have been carried out by Royal Mail over the past 18 months, including flights over the Scottish Isle of Mull, the Isles of Scilly off the coast of Cornwall, and the Orkney Islands' Kirkwall and North Ronaldsay. Between Tingwall Airport in Lerwick and Unst, a 50-mile journey each way, test flights for the new service have been conducted. Letters and packages are subsequently carried by the neighborhood postman or lady using the drones employed in the study, which can carry up to 100kg of mail for two daily return trips between the islands.

Postal Services Industry Overview

The industry is moderately fragmented. Large companies have advantages in widespread infrastructure and diversity of services. Small companies compete by specializing. Most nations have a government-owned postal service that controls a major portion of the market there. These Government-owned postal agencies typically have a monopoly on mail delivery but face heavy competition from private package delivery companies. The competing entities form partnerships to capitalize on each other’s strengths. For instance, major express delivery companies Federal Express (FedEx) and United Parcel Service (UPS) contract certain residential deliveries to the US Postal Service (USPS), while the USPS contracts air transportation out to FedEx and UPS.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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