E-commerce Deliveries Will Keep Postal Industry Above Water, Avers Augusto Beato

Augusto Beato of Portland SEO says that as e-commerce is poised for further growth, the postal industry can expect more business.

He was reacting to the IPC Global Postal Industry Report which showed that in 2017, the sector recorded 2.6% revenue growth, with an acceleration in the first half of 2018 through an increase of 4.6% year-on-year.

Ongoing e-substitution and e-commerce growth continued to widen the performance gap across business units, with revenue down 2.3 percent for mail and up 11 percent for parcels. Profitability remained strong for both divisions, with efficiency initiatives, network optimization and capacity investment set to continue in the years ahead.

"Parcels and e-commerce consignments are providing hope to an industry that has to deal with a declining number of letters being sent," Beato, who is the CEO of Portland SEO, pointed out.

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While growth rates ranged widely, more than two-thirds of posts saw stable or increasing revenues during the year and most cited parcels and express as a key growth driver.

“Digitisation remains the key driver of structural mail volume decline across the industry, though growth in small and lightweight e-commerce packets has helped ease the fall. In 2017, the average decline in mail volume slowed to 4.6% compared to 5.2% in 2016,” said Holger Winklbauer, CEO of IPC.

Postal operators are also seeking growth opportunities abroad. For posts with international segments defined as either revenue generated by subsidiaries abroad or from customers outside the domestic market, international revenue has increased over the past five years and in 2017 represented close to one-quarter of total revenue on average, though shares ranged widely across operators.

Most posts have grown international revenue since 2012, with five achieving average annual growth above 10 percent.