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Postal Development Report 2020

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Postal Development Report 2020 Postal Development Report 2020 Achieving higher performance amid a major crisis October 2020 Postal Development Report 2020 Achieving higher performance amid a major crisis International Bureau Executive Office (DIRCAB), Research and Strategy Programme October 2020 POSTAL DEVELOPMENT REPORT About this report This report benchmarks the situation of postal development around the world in 2020 – a crucial topic owing to the important role played by the postal sector in promoting socio-economic development. The analysis is based on the Integrated Index for Postal Development (2IPD), which draws on a wide range of postal (big) data from numerous sources to provide a composite picture of postal development in 170 countries. Switzerland tops the list, followed by Austria, Germany, the Netherlands and Japan, with the top 10 mostly made up of advanced economies. There are also encouraging results among regional leaders, such as Poland, Singapore, Tunisia, Brazil and Ghana. The report discusses the considerable impact of COVID-19 on the postal sector through the lens of the 2IPD. The analysis reveals that the reliability of the international postal supply chain has been re-established, after considerable disruptions in March and April 2020. Nevertheless, a major consequence of the pandemic is that the postal network is still less connected and far-reaching than it was a year ago. While the operators of most advanced economies appear to be resilient to the economic shock, in most developing countries the battle for the relevance of the sector is gathering pace. Authors: Mauro Boffa, Fernão De Borba and Lukasz Piotrowski. Copyright © 2020 Universal Postal Union. All rights reserved Except as otherwise indicated, the copyright in this publication is owned by the Universal Postal Union (UPU). Reproduction is authorized for non-commercial purposes, subject to proper acknowledgement of the source. This authorization does not extend to any material identified in this publication as being the copyright of a third party. Authorization to reproduce such third-party materials must be obtained from the copyright holders concerned. Disclaimer: This publication by the UPU constitutes research in progress of an informational character for which no guarantees or assurances are provided; in this regard, it shall not be deemed to represent the official position or opinions of the UPU or its staff members, or of UPU member countries. Moreover, the depiction and use of boundaries, geographic names and related data shown on maps and included in lists, tables, documents, and databases are not warranted to be error-free, nor do they necessarily imply official endorsement or acceptance by the UPU. 2 UNIVERSAL POSTAL UNION, 2020 Contents Introduction 5 1. The 2IPD 7 2. The 2020 2IPD ranking 9 3. The COVID-19 crisis and postal development 15 4. Conclusion 19 Appendix 1: Regional classification and list of countries 20 Appendix 2: Economic classification of postal development 21 Appendix 3: Methodology for calculating the 2IPD index 22 Endnotes 28 List of figures Figure 1 Cumulative distribution, 2020 2IPD 8 Figure 2 2020 2IPD 9 Figure 3 Continued dispersion in the 2IPD ranking 9 Figure 4 Within-region dispersion (2020 scores) 10 Figure 5 Overview: Industrialized countries 10 Figure 6 Overview: Europe and CIS 11 Figure 7 Overview: Asia-Pacific 11 Figure 8 Overview: Arab region 12 Figure 9 Overview: Latin America and the Caribbean 12 Figure 10 Overview: Africa 12 Figure 11 Postal development and economic development 15 Figure 12 Stranded mail ratio 16 Figure 13 Evolution of network breadth and depth 16 Figure 14 Median monthly network losses 17 Figure 15 Median spread with respect to wealthy performers 18 List of tables Table 1 2020 2IPD ranking 13 Table 2 Key differences in resilience 18 3 POSTAL DEVELOPMENT REPORT Glossary 2IPD Integrated Index for Postal Development COVID-19 Coronavirus disease 2019 DO Designated operator GDP Gross domestic product EDI Electronic data interchange EMS Express Mail Service EMSEVT EMS item event PREDES Pre-advice of dispatch PTC Postal Technology Centre SDGs Sustainable Development Goals SDR Special Drawing Rights USD United States dollar WDI World Development Indicators 4 UNIVERSAL POSTAL UNION, 2020 Introduction The COVID-19 crisis and postal development Postal development matters The report discusses the impact of the COVID- 19 pandemic through the lens of the four The postal sector plays an important role in dimensions of the 2IPD. promoting socio-economic development.i Affordable, efficient and universal postal At first, major logistical challenges faced services substantially reduce transaction costs throughout the world during the height of the between economic agents, granting them access “great lockdown” rapidly affected postal to a vast communications and infrastructure reliability. The worldwide drop in air travel network. In this sense, the postal sector actively coupled with a shortage of labour supply caused contributes to the achievement of the United many mail items to become “stranded”, dilating Nations Sustainable Development Goals international delivery times. As the necessary (SDGs). sanitary measures were progressively eased, the logistics supply chain started returning to more Postal development can be defined as reflecting “normal” levels. the ability of a country’s postal network to perform across a wide range of factors that However, the medium-to-long-term effects on enable socio-economic development. In this postal operators cannot be underestimated. At regard, postal networks can be considered as the time of writing this report, the connectivity high performing if they offer a reliable service of the international network has not yet been and have good connectivity, a high level of fully restored. Currently, fewer items are being demand from citizens, and operations that are sent internationally and to fewer destinations resilient to external shocks. than in 2019. Some countries will struggle to regain the volumes generated prior to the crisis. The Integrated Index for Postal Development (2IPD) embodies this definition and provides The crisis will put to test the relevance of the policymakers, regulators and operators with sector as the world still has to bridge the so- tools to assess a country’s level of postal called “postal development divide”. While in development. most advanced economies postal services are at the heart of everyday business needs, many By drawing on a wide range of (big) data from developing countries are currently witnessing numerous sources, the 2IPD provides a low levels of demand for letter post as well as composite picture of postal development in 170 parcels and logistics. countries, with a ranking that focuses on the performance of traditional postal operators. In this context, the operators that already had Historically, these operators have primarily been the most resilient business models prior to the considered as vehicles for delivering socio- crisis will fare better, but they will also remain economic development, representing one of the highly dependent on the growth of e-commerce largest physical networks in the world, with and on wider economic circumstances in their some 656,000 post offices and 5.23 million countries. employees.ii The new road(s) to postal development Top performers in 2020 As a rising number of postal operators increase This year, Switzerland continues to top the their reliance on parcels and logistics in order to ranking, followed by Austria, Germany, the reap the benefits of e-commerce growth, they Netherlands and Japan, with the top 10 mostly are also de facto increasing their dependence on a made up of advanced economies. highly competitive segment in which reliability and reach are pre-conditions for success. In As in previous years, there are, of course, such an environment, the only way for postal encouraging results among regional leaders, such operators to boost relevance in the long term is as Poland, Singapore, Tunisia, Brazil and Ghana. to attract and retain customers that order goods online and value timeliness and predictability in delivery, regardless of whether the item is 5 POSTAL DEVELOPMENT REPORT purchased domestically or imported. As the starting conditions are not the same everywhere, there will be different roads to postal development, heightening the importance of international cooperation in areas such as knowledge sharing, common standards and technology. As a forum, a provider of technical solutions and a knowledge centre for the postal sector, the UPU can certainly contribute to this endeavour. Structure of this report This report is structured in four sections. Section 1 discusses the methodology behind the 2IPD. Section 2 presents the latest 2IPD ranking. Section 3 discusses the consequences of COVID- 19 on postal development. Section 4 concludes the report. 6 UNIVERSAL POSTAL UNION, 2020 1. The 2IPD in all key segments, and in particular the potential to generate higher volumes. Countries possessing a relatively denser network and a Four pillars of postal development high level of postal consumption per capita will The 2IPD is a comparative indicator of postal show good performance in this area. iii development around the world. It is a Regarding the resilience pillar, the intent is to composite index that summarizes information assess the ability of postal services to withstand about the performance of postal operators in external shocks through adaptable business 170 countries. As such, the 2IPD is a unique
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