Apex Insight Postal Operator Benchmarking study reviews and ranks the world’s top post offices

The latest report from Apex Insight finds that postal operators worldwide are seeing major changes in their businesses. In particular, falling mail volumes as a result of e-substitution as paper mail switches to electronic format, and increases in parcels volumes from the growth of e-commerce.  Total mail volumes delivered by the postal operators in this study have decreased by 25% since 2004 and continue to fall at 2.6% per year, while parcels grow at 5-20+% per year.  Also, post offices are having to cut the costs of post office networks while continuing to provide services for rural users. Given this context, many postal operators are diversifying away from dependence on mail.

Global Postal Operators 2016 – Benchmarking of Performance, Strategy and Diversification, benchmarks the postal operators of the 20 largest global economies: United States Postal Service (USPS), China Post, Japan Post, Deutsche Post (Germany), Royal Mail Group (UK), La Poste (France), India Post, Poste Italiane (Italy), Brazil Post, Canada Post, Korea Post, Russia Post, Australia Post, Correos (Spain), Correos de Mexico, Pos Indonesia, PostNL (Netherlands), PTT Turkey, Swiss Post and PostNord (Sweden and Denmark).  Singapore Post, also included via a wildcard, comes from a smaller, dynamic economy and has followed an interesting strategy with several entrepreneurial moves.

The post office benchmarking report contains extensive analysis of market trends, benchmarks covering 36 metrics grouped into the categories of Scale, Performance, Growth, International Diversification and Business Diversification, accompanied by our commentary and interpretation, overall rankings, based on the benchmark scores and case studies on 11 of the leading operators, reviewing their context, performance and strategy in detail.

Deutsche Post comes top of the rankings, from Japan Post. This is because of the large size of both organisations, strong recent performance and diversity, with Deutsche Post having the global DHL parcels and logistics operation and Japan Post owning a major financial services wing.

In the scale category, Japan Post has the largest overall revenue and also profit however, this is mainly related to its large financial services business: USPS is top for mail revenue and Deutsche Post, as a result of its ownership of DHL, for parcels revenue.  China Post has the most employees while India Post has most post offices. Royal Mail has the fewest post offices – zerp – as the only major operator to have been split from its post office network, in the run-up to its privatisation.

In performance, Singapore Post has the highest operating margin while that of USPS is the most negative.  Swiss Post and Australia Post have the highest revenue per item for mail and parcels respectively.  Japan Post is top on several other measures including revenue and profit per employee and revenue as a proportion of its home territory GDP. Once again, this is due to its financial services activities.  When mail and parcels revenues alone are compared to GDP, Australia Post and Deutsche Post, respectively, come top. On the related measure of mail and parcels items per head of home territory population, the leaders are USPS and Royal Mail, which both have lower revenues per item.

Singapore Post also has had the fastest overall revenue growth, but Japan Post leads in mail and PTT Turkey in parcels revenue growth. Surprisingly, despite ongoing e-substitution, a handful of other post offices have grown their mail revenues in the last couple of years although all but one (Pos Indonesia) has seen its number of mail items decrease.

In international diversification, Deutsche Post leads conclusively with over three times more revenue from outside its home country than all the other operators combined.

In business diversification, highlights are the large financial services businesses of Japan Post (which give it top ranking for non-mail / parcel revenue), Poste Italiane and Swiss Post; and the large international parcels businesses of Deutsche Post, Royal Mail and La Poste (which has also made the most acquisitions in the last five years).  But there is a very broad range of other activities represented, including significant logistics businesses, such as DHL and Toll Group – Japan Post’s recent strategic acquisition – Royal Mail’s new e-commerce service businesses and passenger transport at Swiss Post.

Global postal operators are largely still organised along national lines. But there are some exceptions with PostNord combining the Swedish and Danish post offices and PostNL potentially an acquisition target for bpost, or another suitor. In the long run, significant international consolidation of the global postal operator market is a possibility.

About Apex Insight

Apex Insight is an independent provider of research and consulting services covering business and financial services markets in the UK and Europe. It publishes insightful market reports and carries out commercial due diligence and other bespoke consulting exercises to support managers, investors and advisers in making better business decisions.