The UPU works to develop and improve traditional postal products to ensure high quality, reliable and modern postal products for customers worldwide.
Though letter volumes have declined in the past decade, these postal products still represent a large share of postal revenues. According to UPU data, letter-post still represents about 40 percent of postal income globally, with 313 billion letter-post items exchanged during 2017 alone.
The face of letter-post is also changing with the growth of e-commerce. An estimated 80% of mail items generated by e-commerce today weigh under 2 kilogrammes and are processed in the letter-post stream. Increasing the value of the letter-post service will help respond to customers' need for a strong international service, and sustain the growth of the e-commerce business.
To help ensure a high quality of service in line with customers’ needs, the UPU creates rules and regulations on the exchange of letters, determines common delivery standards for international mail and operates letter-post development programmes to stimulate the market.
The international parcels market is experiencing rapid growth. The potential for continued expansion is promising, given the opportunities now afforded by the development of e-commerce. Reduced trade barriers and the general globalization of business and manufacturing are also driving the increased demand for international parcel products.
As part of the UPU's objective of helping its designated operators respond effectively to the ever-changing needs and expectations of their posting customers, it is undertaking a number of projects aimed at improving the quality of service worldwide and raising the image and profile of the international postal parcel. These projects have been specifically designed to stimulate the growth of developing Posts' share of the overall international parcels market.
UPU activities in the parcels sector are focusing on the provision of full service international parcel products, with consistent end-to-end delivery times and strong customer and product support.
Integrating Postal Products
With the introduction of its Integrated Product Plan (IPP), adopted in 2018, the UPU is for the very first time taking a fully integrated approach to product development and ensuring speedier decision making on products in response to market needs.
Posts worldwide are confronted with the same challenges of declining letter volumes accompanied by an exponential increase in postal items containing goods. The cross-border mail and parcel-post market is mature, highly competitive, and highly fragmented. The market space has changed dramatically in the last two decades.
One of the challenges faced by the UPU in relation to customer needs and product features is to find ways of satisfying market requirements by rationalizing, modernizing and integrating the existing framework of products. However, as part of an industry sector involved in the cross-border exchange of goods, it will also need to be mindful of how its products fit in with emerging customs, security and regulatory requirements.
Furthermore, with expected worldwide growth of over 10% per year, cross-border e-commerce is a source of potential for the postal sector. However, a primary barrier to postal market growth is the complexity of the postal product portfolio, which is preventing Posts from fully exploiting the burgeoning opportunities offered by the e-commerce market.
The UPU's Integrated Product Plan (IPP) is designed to break down this barrier.
The main aim of the IPP is to develop a fully integrated portfolio of postal products and adequate, competitive remuneration systems that cover the costs of delivery. This, in turn, will ensure that the opportunities created by e-commerce can be taken up by the whole UPU membership.