Development of physical postal services to better reflect e‑commerce customer needs in both the “below 2 kg” and “above 2 kg” markets

The UPU Convention and Regulations categorize postal items into those containing documents and those containing goods. Postal items containing goods make up a large portion of cross-border e‑commerce sales. Designated operators (DOs) are important actors in the cross-border market for e-commerce items under 2 kg, delivering about 70% of all cross-border shipments in this segment. However, DOs have little presence in the market for items over 2 kg, and their involvement is likely to decrease significantly without changes to their current products and business models. Parcel volumes are growing through e-commerce and business-to-business (B2B) exchanges; however, DOs' market share remains lower than that of other sector players.

Parcel volumes have increased as a result of more e-commerce and B2B shipments; however, DOs tend to have a smaller market share than other parcel providers. The main business-to-consumer (B2C) e-commerce model used by operators to transport cross-border postal items containing goods was severely affected by the COVID-19 pandemic, which reduced interregional transport and labour movement. While some cargo channels continued moving items, commercial flights were grounded for a long period. The situation was exacerbated by new regional trade and security rules (including new tax systems and customs requirements). UPU statistics and data indicate that developing regions are not taking full advantage of the opportunities for postal growth from increased international e-commerce. Moreover, large online sellers are using their own delivery networks, such as pick-up points, smart lockers and local hubs, which reduce cross-border delivery volumes through the postal network. All of these factors have accelerated the long-term decline of letter-post volumes, and increased the long-term rise in volumes of postal items containing goods.
Development of physical postal services to better reflect e‑commerce customer needs in both the “below 2 kg” and “above 2 kg” markets