Letter post, parcel and express mail traffic and revenues are showing the signs of a healthy recovery.
Data gathered by the Universal Postal Union from 20 of the world’s largest Posts and express carriers suggests that business is picking up after hitting its lowest slump since the Great Depression, mid-way through 2009.
The Posts and express companies surveyed generate up to 80% of global mail volumes (more than 350 billion pieces out of an estimated 438 billion worldwide), and 60% of global postal revenues (324 billion USD in 2008).
The parcel and express segments are showing the best signs of recovery, both displaying positive growth in a comparison of similar quarters in 2010 and 2009.
“The parcel and express mail segments are doing very well,” says José Ansón, the UPU economist who led the research. “There was a very strong rebound of express mail since the end of 2009 due to the growth in international trade.”
Throughout the crisis, the parcel business was the most resilient, especially in the international arena. The healthy state of e-commerce is likely to have contributed to this.
After experiencing drops in 2008 and most of 2009, domestic and international express mail volumes started on an upward swing at the end of 2009 and were still growing to mid-2010.
Letter post
The decline of global domestic mail volumes has slowed down since the end of 2009. By the middle of this year, they had reached the same levels as before the crisis, when volumes were declining at an annual rate of about 2%.
At the height of the crisis, global domestic mail volumes were down 12%, or about 13 billion pieces, in the second quarter of 2009 compared to the same period in 2008. That number is just slightly less than the annual volume processed by a country like France, which processes some 17 billion pieces of mail a year.
The letter-post product, which includes mail items up to 2 kilograms, still accounts for 40 to 60 per cent of an average Post’s revenues.
But letter-post volumes aren’t declining everywhere in the world. In some developing countries and countries with emerging economies, Ansón says letter-post volumes are resisting better than in industrialized countries and even continue to grow.
“This seems to be the case in countries that effectively integrate the physical, electronic and financial facets of their postal network as well as use new technologies to improve existing services or create new ones,” says Ansón.
Revenues
In terms of revenues, the domestic and international express mail segment is showing strong positive growth. Figures for the second quarter of 2010 showed that international express mail revenues was up 27% compared to the same quarter in 2009, while domestic figures were up 8% for the same period.
International parcel revenues are consistently growing more than domestic ones. During the last quarter of 2009 and the first two quarters of 2010, there were respectively 15%, 12% and 6% variations with the same periods last year.
While international letter-post volumes continue a downward spiral (volumes were down 16.8% in a year-over-year comparison of 2010 and 2009 second quarters), the revenues remain fairly positive. Ansón explains this by the fact that there appears to be a consumer move to sending heavier items, for which the shipping cost is higher.
“Today we find that there are 12.48 mail items per kilo instead of 14.64 items just a few years ago,” he says. “There is a sudden shift in mail content. It needs further research, but it could be due to the fact that there is more e-commerce, less transactional mail such as bills and invoices, and more direct marketing initiatives through catalogues, for example.”