Postal Economics

The postal sector plays an important role in promoting socio-economic development. Affordable, efficient and universal postal services substantially reduce transaction costs between economic agents, granting them access to a vast communications and infrastructure network. Postal economics studies the supply and demand of postal services and the role of the postal sector within the overall economy.

Every year, the UPU’s Postal Economic Outlook provides a snapshot of the state of the postal sector in juxtaposition with the evolution of the global economy. This year’s edition takes stock of accelerated economic transformations more than one year into the COVID-19 pandemic. Following the grim economic performance of 2020, most economic projections indicated a partial recovery in 2021, especially in countries that succeeded in adapting their economic activities to the sanitary constraints in place. As the inoculation campaign progresses in most countries, governments face a dilemma between completely reopening their economies and keeping the number of infections and the new variants at bay.

In this context, postal operators have suffered from an increase in costs and have had to adjust to a new normality. However, increased demand for postal and courier services resulted in a surprising increase in revenue (6.8%) in 2020, in nominal terms, as parcels and logistics began to overtake letter post as the main source of revenue for designated operators, especially in high-income economies. Despite this evolution, operating expenditure grew even faster (7.9%) and many (large) postal operators posted negative net results. This raises the question of whether the trend of parcel-driven growth in the sector will be marked by relatively lower profitability in future, or whether postal operators will be able to benefit from this new segment without further endangering their financial sustainability.

In order to determine the how COVID-19 is affecting the postal sector and the overall economy, the UPU has been regularly monitoring economic and postal aggregates in close collaboration with partner international organizations. The reports in this section attempt to provide a global picture of the latest developments.