The 2024 edition of the UPU’s flagship report on the development of the postal sector provides a scrutinizing analysis of the sector’s past and present, providing an optimistic vision for its successful future.
As the Universal Postal Union celebrates its 150th anniversary, the international postal network is facing an existential question: Is it able and willing to pivot its mission, policies, and ways of working to embrace the latest technological revolution, or will it maintain the status quo? The answer will determine whether the institution will reach its 200th anniversary.
This stark question, derived from an analysis of nearly 150 years of postal trends, is explored in the 2024 State of the Postal Sector report. One of its key findings shows that despite the sector’s massively expanded reach since the 19th century, it has erased almost all its gains in the share of cross-border postal volumes.
UPU economist José Anson, who conducted the study, said if the global postal network maintains the status quo, it will almost certainly lead to the UPU’s extinction. And yet, there is reason to hope.
“Our member countries, government regulators, designated operators, I think, are conscious that they are living through a critical juncture now,” Anson said, “and that if they are not able to introduce more bold changes in how the organization operates and how it supports our facilities, digital trade, and the internationalization of the economy in the coming decades, there is very little grounds for survival by 2074.”
Such a “Regression” to obsolescence, however, is just one possibility explored in the report. It also charted two other scenarios: “Resilience,” in which some changes are made at the periphery, such as remaining focused on logistics yet forgoing integrated financial and digital services, which would keep internationalization rates low.
The best-case scenario, with a dramatic transformation of systems and regulations, however, could usher in a “Renaissance,” with internationalization rates rebounding to peak levels within a couple of decades and the postal sector emerging as the leader in cross-border services, the report said.
In pure numbers, the global population served by the international postal network has surged to 7.3 billion in 2024, from 600 million in 1874. With this growth, international letter volumes surged approximately 35-fold by its peak in 1991, with international parcel volumes continuing to climb until pre-COVID-19 pandemic 2019, when volume was nearly 80 times that of the start of the UPU.
Such postal services continue to provide value to member countries, as a previous UPU study found that without postal services, a country’s GDP would fall by a median of 7 percent, the report said.
Still, the rate of cross-border volumes as a factor of total postal volumes, the internationalization rate, has continued to decline since both letter- and parcel-post peaked in 1913, just before World War I with the peak of the first wave of globalization. Letter-post has since fallen to 0.5 percent from its peak of 5.5 percent and parcel-post has plunged to 0.7 percent from 7.3 percent.
The report also highlights how the international postal service has never reached its full potential. While the rate of international postal delivery has tended to mirror trends in globalization, there has always been a gap. In 1913, at the peak of internationalization rates, letter- and parcel-post were significantly lower than global trade flows of about 14 percent of GDP. And that gap has only widened.
For example, post-World War II, trade globalization led to expansive growth that, into the 2000s, saw trade as a percentage of global GDP surpass 20 percent, the second wave of globalization. Yet postal internationalization rates continued a decline that had begun after World War I, nearly a century before.
Postal services continued to lose ground through several advances in communication technologies, from telephones and fax machines to email and digital platforms. Additionally, global express companies arrived in the 1980s and implemented track-and-trace systems with faster, more reliable cross-border services.
“This divergence raises important questions about how international postal exchanges are governed by the UPU and whether the current structures and policies are sufficient to adapt to the rapidly changing global trade and communication landscape,” the report said.
Still, a need exists for international mail, the report notes, such as for legal documents and niche markets. The report even noted that a resurgence in popularity of postal mail could appear with younger generations who may experience digital fatigue. However, the challenges remain clear. Demand for international parcels and small packets saw a nearly 60 percent drop by 2024 from the 2019 peak as domestic demand increased and international deliveries faced regulatory, taxation and security issues, among other challenges.
With this backdrop, the sector must commit to large-scale change, the report said. It must embrace technological innovations, such as automation and real-time tracking systems to improve efficiency; strengthen international collaboration and policy coordination, such as with the UPU’s efforts to harmonize postal regulations and foster hyper-collaboration among postal operators, governments, and private sector players; and invest in infrastructure in least developed countries to expand international connectivity and improve service delivery to foster greater economic participation and development.
Such steps could allow for a resurgence in internationalization after 2025 with letter-post potentially climbing back up to 1 percent and parcel-post surging to 15 percent by 2074.
There are encouraging signs that the sector could begin to make changes more collaboratively and quickly. For example, the reinvigorated UPU Consultative Committee is welcoming more of the wider postal players into collaboration, Anson said.
“This is a clear sign that the need for collaboration goes in both directions,” he said. “This could eventually lead to this Renaissance scenario because … in the single framework you have all relevant parties to cross-border e-commerce logistics in the world, all relevant parties will be there having found a balanced governance of the respective interests.”
This article first appeared in Union Postale Autumn/Winter 2024.