In a May of 2012 a report titled Focus on the Future published by the International Post Corporation and The Boston Consulting Group there is strong support for the USPS and international Posts to shift focus towards consumer demand for parcel delivery.
The report illustrates the decoupling of GDP growth from mail volume growth in the year 2000 combined with over-capacity found within the USPS that the posts must act quickly to create new product offerings to fill the void.
The IPC report states, “The growing parcel market will soon be larger than the declining mail market. In some markets (International Posts) this point has already been passed: in most others it will happen in the next ten years.” The report goes says that Posts should drive towards this tipping point to capture market dominance as parcel mail margins are typically higher than those associated with mail.
Much of the rapid growth of the parcel market can be attributed to e-Commerce. The IPC report states that internationally, “eCommerce parcel revenue (is) projected to grow at 7% per year”. USPS mail has declined at a faster rate.
As I have noted in previous blogs, the USPS has been moving surprisingly quickly to capture market share launching a myriad of new small parcel product including Package Return Service, Lightweight Parcels, and Commercial Base Plus Cube Rates. Time will tell if they can take business away from FedEx and USP.
-Bob Makofsky at email@example.com