The global economic and financial crisis: further …...The global economic and financial crisis:...

The global economic and financial crisis: further insights into its impacton the postal sector

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

II. PostalTrafficandExpressVolumes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1. Trendsindomesticmarkets–aggregateestimates 2. Performancevariationindomesticmarkets 3. Trendsininternationalmarkets–aggregateestimates 4. Performancevariationininternationalmarkets

III. PostalTrafficandExpressRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

IV. PostalFinancialServices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

V. Furtherinsights–Measuresadoptedtomitigatetheimpactofthecrisis . . . . 19 1. Postalnetwork 2. Financialindicators 3. Servicesoffered 4. Otherareas

VI. Conclusion:avenuesforfurtheranalysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Contents

The global economic and financial crisis: further insights into its impact on the postal sector 5

I. Introduction

ItwasthereforedecidedtocontinuetheworkinthisareaandfollowuptheAprilstudywithanassessmentofthesituationinthefirsthalfof 2009, to be presented at the 2009 CA.Thepresentanalysis isbasedonthe follow-upsurveyconductedintheautumnof2009and takes into account the views expressedbyparticipants.

Thestudy isorganizedas follows:Section IIbelow analyses the impact on postal trafficandexpressmailvolumesduringthefirsthalfof 2009, followed by an analysis of postalandexpressmailrevenuesinsectionIII.Post-alfinancialservices(sectionIV)andmeasurestakentolimittheimpactofthecrisis(sectionV)arealsodiscussed.

On the occasion of a high-level debate atthePostalOperationsCouncil (POC) inApril2009, the International Bureau of the Uni-versalPostalUnion (UPU)carriedoutanas-sessmentoftheimpactoftheglobalfinancialandeconomiccrisisonthepostalsector.1TheanalysiswasbasedonasurveythattheInter-nationalBureauhadconductedofthe15oftheworld’s largestPostsandprivatecouriercompanies inMarch2009.Theanalysiswasconsidered valuable information, contribut-ingtoabetterunderstandingofthe impactof the crisison the sectorandproviding in-dicatorsthatcontributenewperspectivestothe decision-making and crisis-managementprocesses.

Methodology

Thepresentsurveyisafollow-uptothesurveyconductedinMarch2009.TomaintaincomparabilitywiththeresultsoftheMarchsurvey,thisfollow-upsurveyisbasedonthesamestructureasthepreviousone,withanadditionalsectiononqualitativeissues.

Inviewofthekeeninterestshownbymembercountries,thenumberofparticipantsinthefollow-upsurveyhadincreased.Thissecondsurveyontheimpactofthefinancialandeconomiccrisisonthepostalsectorwassenttoalargeraudiencemadeupof22oftheworld’slargestpostaloperatorsandprivatecouriercompanies.Thequestionnairesenttooperatorscomprisedthreeparts:«Impactonvolumes»,«Impactonrevenues»and«Supplementaryinformationonqualitativeissuesregardingotherservicesofferedandonmeasuresimplementedtolimittheimpactofthecrisis».Toestimateoperatorperformanceinthefirstandsecondquarterof2009,resultsob-tainedfromthefirstandsecondpartsofthesurveywereweightedaccordingtotheop-erator’ssize,estimatedbyitscontributiontoworldtotalvolumesineachmarketsegmenttoobtain aggregate estimates; individual countrydatawere kept confidential. Surveyparticipants representedapanel consistingofdesignatedpostaloperatorsaccounting

1 Acopyofthestudy”Theglobalfinancialandeconomiccrisis:Initialinsightsintoitsimpactonthepostalsector”, is availableon the InternationalBureauwebsite athttp://www.upu.int/postal_economics/en/the_global_economic_and_financial_crisis_en.pdf

6 The global economic and financial crisis: further insights into its impact on the postal sector

forsome69%ofworldtotalletterpostvolumesinthedomesticservice,57%inthepar-celssegmentand78%intheexpressmarketsegment(basedon2006-2008average).Theexpressmailsegmentincludedtwoprivateoperators.Similarly,intheinternationalservice(dispatch),surveyparticipantsrepresented45%,13%,and56%respectivelyoftotal volumesof the letter-post,parcels andexpressmailmarket segments (includingtwoprivateoperators).

Inrevenues,surveyparticipantsaccountedforsome64%oftheworld’stotalletterpostvolumesinthedomesticservice,about20%ofparcelsandsome80%oftheexpressmailmarket(includingtwoprivateoperators).Intheinternationalservice(dispatch),participantsrepresented43%,9%,and55%res-pectively of revenues from the letter-post, parcels and expressmailmarket segments(includingtwoprivateoperators).

Dueto the lowrepresentativityof thesample for internationalparcels, theirfiguresmustbetakenwithsomecautionandwillbefurtherupdatedandsub-mittedtodatacompletioninforthcomingIB-UPUquarterlysurveys.


II. Postal traffic and express volumes1 Trends in domestic markets – aggre-gateestimates

Figure 1 shows the quarterly variations inworldwide volumes of letter post, parcelsandexpressitems(includingtwoprivateop-erators)inthedomesticservicefor2008andforthefirsttwoquartersof2009(comparedwiththesamequartersofthepreviousyear).

Continued decline in letter-post volumes…Thedomesticletter-postsegmentincreasinglyfelttheeffectsofthefinancialandeconomiccrisis:quarterlyvariationsshowedincreasing-lynegativegrowthratesthrough2008,drop-pingevenfurtherto-11.7%and-12%inthefirstandsecondquartersof2009(Figure1).However,thiswaslargelyduetotheperform-anceofoneindustrializedcountry’soperatorwhich,ifnottakenintoaccount,wouldhaveresulted in amoderate, though still increas-inglynegative, trend.All surveyparticipantsshoweddecliningratesinthefirstandsecondquartersof2009(morethan6%declinesforamajorityofthemcomparedwiththesamequartersofthepreviousyear).Declining direct marketing volumes seemedtoaccountformanyoftheobservedchang-es,althoughstructuralchanges,suchasthetrendtowardselectronicsubstitutionoftradi-tionalmail,alsoplayedarolehere.Overthreequarters of the survey respondents (78%)confirmed steeply or moderately decliningnumbersofadvertisingitems,while11%re-portedanincrease(Figure2).

… parcels stable and even growing…Similarly, worldwide parcel volumes werelargely affected by another industrializedcountry’s operator whose volumes were al-readyrecoveringinlate2008.Thus,aturna-roundtopositivegrowth intheparcelsseg-ment tookplace in the lastquarterof2008(1.1% compared with the same quarter in2007), followed by 0.7% and 8.1% in first

and second quarters of 2009. Half of theoperatorsreplyingtothesurveysawpositivegrowthratesinthefirsthalfof2009.Evidencefrommanycountriesshowsthate-commercewasresilientintheeconomicenvironmentinlate 2008 and the first half of 2009 and insomecasesevensawgrowth,thusbenefitingparcelvolumes.AsshowninFigure2,about43% of survey participants saw moderateor large increases ine-commerce shipmentsduringthefirsthalfof2009.Bythattime,theeconomies of some industrialized countries,such as Germany and France, were alreadycomingoutoftherecession.

… express volumes with signs of stabiliza-tion?Inthedomesticexpressmailsegment,theac-celeratingdecline slowed in thefirsthalfof2009,with lessdramatic, though still nega-tive,performanceof-4.4%and-5.1%inthefirstandsecondquartersof2009(Figure1).This couldbedue to customers’ attempt tocut costs by switching to more economicalservices, aswas seen in a number of coun-tries.


Figure1:Worldgrowthratesinvolumesofpostaltraffic(DPOs)andexpressmail(DPOsandothers)–domesticservice

- 2.3- 2.9

- 4.4- 5.9

- 11.7 - 12.0

- 0.5- 1.5

- 3.4

1.1 0.7

8.1

0.5

-1.8-2.6

-4.9 -4.4-5.1

- 13.0

- 8.0

- 3.0

2.0

7.0

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)

letters parcels express

0%

25%

50%

75%

100%

- Advertising items (number of) - Electronic commerce (numberof shipments)

service not of fered(NA)strong increase

moderate increase

no change

moderate decrease

strong decrease

Source: UPU.

Figure2:Otherpostaltransactions

Source:UPU


-15-10

-505

1015

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)

Source: UPU.

2 Performance variations in domesticmarkets

Tobetterunderstandhowtheimpactofeco-nomic climate is distributed, it is interestingto compare the variations in performanceamong survey participants and across seg-ments.WhiletheAprilsurveyhadshownin-creasingvariationinperformance,withevensomeoperatorsexperiencingpositivegrowthin2008(thoughdecliningtowardstheendof2008,asseeninFigure3),variationsbecameincreasinglysimilar.

Smaller variations between operators for let-ter post…Theaggregategrowthratessince2008werenegative and continue to be, but in 2009therewasnotasingleoperatorwithpositiveresults. The results ranged between -2.4%and -16.2% (first quarter) and -5.8% and-4.6% (second quarter), thus giving muchworseresultsthanin2008.Furtherinvestiga-tionisneededtodeterminewhetherthiswasactuallytheresultofa“timelag”intheim-

pacton letter-post volumes in thedomesticsegment,orsimplyan“overlap”ofstructuraleffects (increasing substitution) and the ef-fectsofthecrisis.

… Larger variations for parcels and, in par-ticular, express itemsFortheparcelssegment,thelargevariationsin2008surprisinglyledtofewervariationsingrowth performance in late 2008 and early2009 (Figure 4) and, most importantly, lessvariationinthenegativefigures.Thiswasnotthe case for thedomestic expressmail seg-ment,whereperformancevariationsseemedtoincreasein2008,comparedwiththefirsthalf of 2009, when only three operatorsshowedpositivegrowthrates(Figure5).

Figure3:Best/worstperformersforletterpost–domesticservice(DPOvolumesonly)


-40

-20

0

20

40

60

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)

Source: UPU.

-50

-20

10

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09year

-on-

year

var

iatio

n (in

%)

Source: UPU.

Figure4:Best/worstperformersforparcels–domesticservice(DPOvolumesonly)

Figure5:Best/worstperformersforexpressitems–domesticservice(volumes)

Source:UPU

Source:UPU


3 Trends in international markets – ag-gregateestimates

International postal markets seemed moreresilientintheAprilstudyandindeed,exceptfortheexpressmailsegment,positivegrowthrateswereachievedinthefirsthalfof2009(Figure6).Nevertheless,forvolumeperform-ance, international markets also seemedmorevolatilethandomesticmarkets.

International letter-post and parcel volumes show signs of recovery… Duringthefirsttwoquartersof2009, inter-nationalletter-postandparcelvolumesseemto recover. In the international lettermarketsegment(dispatch),thedecliningtrendseenin 2008 worsened (-3.6%) during the firstquarter of 2009 (though significantly moremoderate than in the domestic market).This was followed by a turnaround to posi-tivegrowth(5.0%)inthesecondquarterof2009. With only a few operators providingthird-quarterdatafor2009, itmightstillbetooearlytotalkaboutanendinthedeclineof international letter-postvolumes,particu-larly since the trend in 2008 was not thatclear.Itremainstobeseenwhetherpositivegrowthratesareheretostay.

Parcels in the internationalsegmentseemedtorecovermorequickly,asseeninthesurveyresults2 (from a -4.5% decline end 2008 to0.9%and8.5%growthinthefirstandsec-ondquartersof2009).

… international worldwide express volumes continue their declineIncontrasttowhatwasobservedforthelet-ter-post andparcels segments, internationalexpress mail volumes continued their dropwith three consecutive quarters of declinebetween the last quarter of 2008 and the

secondquarterof2009.Thedeclinealreadyseeninthefourthquarterof2008hadaccel-erated,reaching-6.4%and-7.7%inthefirstand secondquartersof2009.Thesefiguresmightbedue,asinthedomesticsegment,tocustomers adopting more economical solu-tionsandtothesharpdeclineininternationaltradeseenduringthisperiod.

2 It should be remembered, however, that the survey respondents that provided data on parcels in theinternationalservice(dispatch)representonaverageonly13%(during2006-2008)oftotalparcelvolumesdispatchedinthismarketsegment(forfurtherinformation,see“Methodology”boxonpage1).


Figure6:Worldgrowthratesinvolumesofpostaltraffic(DPOs)andexpressmail(DPOsandothers)–internationalservice(dispatch)

1.3

- 1.4

3.7

- 3.6

5.0

14.5

11.9

- 4.5

0.9

8.56.8 7.1

4.3

- 2.2

- 6.4- 7.7

- 2.8

4.6

- 10.0

- 5.0

0.0

5.0

10.0

15.0

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)


Source: UPU. Source:UPU

4Performancevariationsininternationalmarkets

Incontrasttothemoreuniformperformanceobserved in thedomesticmarket segments,the international service showed increasingperformance variations among operators,withtheexceptionoftheparcelssegment:

Increasing performance variations among op-erators in letter post…In contrast to the more uniform perform-ance observed in the domestic letter-postsegment, results for the international serv-ice paint a more diverse picture, hinting atlargervariationsamongoperators(Figure7).Performance ranged between -12.2% and15.2%inlate2008andbetween-24.1%and10.9% and -33.7% and 26.5% in the firstand second quarters of 2009. These varia-tionrevealedbigdifferences in thebusiness

modelsofoperators:someoperatorsseemedtohave theability to recover fromthecrisismore quickly. Overall, only three operatorsshowedpositiveresultsinthesecondquarterof2009.

… more homogeneity seen for parcels…Performance variations in the parcels seg-ment (Figure8),withyear-on-yearquarterlygrowth ratesofbetween -7.9%and15.4%(firstquarterof2009)and-4.3%and14.8%(secondquarterof2009),aremuchmoreho-mogeneous than those for the internationalexpressmailsegment.

… and a wide gap opening between opera-tors in the express mail segmentIn the express mail segment (Figure 9), thegapbetweentheworstandbestperformerswas80.9percentagepointsinthefirstquar-terof2009(-13.1%to67.8%)and56.5per-


centagepointsinthesecondquarter(-26.3%to30.2%).Moreover,whiletheperformancegapnarrowed,feweroperatorsshowedposi-

tiveperformance in thesecondquarter, fur-therevidenceoftheextenttowhichthecrisishadspreadacrossoperators.

Figure7:Best/worstperformers–letter-postitems,internationalservice(DPOvolumesonly)

Figure8:Best/worstperformers–parcels,internationalservice(DPOvolumesonly)

-40-30-20-10

010203040

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)

Source: UPU.

-20-10

010

203040

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09year

-on-

year

var

iatio

n (in

%)

Source: UPU.

Source:UPU

Source:UPU


Figure9:Best/worstperformers–expressitems,internationalservice(volumes)

-50

-30

-10

10

30

50

70

Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)



III. Postal traffic and express revenuesAs regards postal revenue, almost all seg-mentswereaffectedbythedownturn,withtheexceptionofparcels in the internationalservice,whereaquickerrecoveryseemedtohave begun in late 2008. Interestingly, thesectorseemedtohaverespondedtothecri-siswithasignificanttimelag,withrevenuesgraduallyfallingin2008andcontinuingtheirdeclinefurther inearly2009(exceptfor let-ter-postandparcelsintheinternationalserv-ice).Thedevelopmentofpostalandexpressrevenuesinthefirsthalfof2009ispresentedinFigure10.Sinceitwasnotpossible,inthecase of the 2008 data, to present develop-mentsinthedomesticandinternationalserv-iceseparately,theyarepresentedasdistinctfigures(Figure11).

Letter-post revenues greatly affected by the downturn…The very rapid decline observed for letter-postrevenuesinthedomesticserviceduring2008 seemed even more dramatic in 2009,thoughitmayhavestabilized:forbothquar-tersinthefirsthalfof2009,a-9.1%declinewasobserved.Onlythreeoperatorsreportedpositive revenues. Things look brighter forthe international service: the -8.4% declineinthefirstquarterof2009slowedto-1.8%inthesecondquarter.

… parcel revenues more resistant to the crisis, with a positive picture for the international service…The decline in revenues seen for parcels in2008 was much smaller than in the othersegments. Inthedomesticservice,however,negative growth rates were seen in early2009 (-0.5% in first quarter and -1.5% insecondquarter),whichcouldbeanindication

of stiffer competition in this segment. Datafrom several operators for the third quarterof2009seemtoindicatethattheworstmaybeoverandthatrecoveryisabouttobegin,although it is still tooearly fora fullassess-ment.Intheinternationalservice,parcelrev-enuesgrowthrateswere18.3%and16%.3

… express mail revenues plunging Revenuesfortheexpressmailsegmenthavebeeninfreefallsincelate2008.Figureswereevenworseinthefirsthalfof2009forboththedomesticand internationalservices.Thedropwas-8.4%and-12.1%inthedomesticserviceand-17.7%and-23.4%inthe inter-national service in the first and the secondquarters of 2009. The variation in perform-anceacrossoperatorswasnowhereaslargeas in theexpressmail segment. In this con-nection, the impact of fuel surcharges andthe dispatch of fewer and less heavy itemsmightalsobeafactor.

3 Anoteofcautionhere:surveydatafortheinternationalparcelssegmentrepresentlessthan10%oftheaverage2006-2008worldwideparcelvolumes(seeMethodology,page1).Comparabilityisalsolimited,sincethe2008estimatescannotbedisaggregatedtoisolateinternationalserviceperformance.


Figure10:Worldgrowth rates of postal traffic (DPOs) and expressmail (DPOs andothers)revenues,2009

Figure11:Worldgrowthratesofpostaltraffic(DPOsonly)andexpressmail(DPOsandothers)revenues(domestic+internationalservice),2008

- 9.1 - 9.1

- 0.5- 1.5

- 8.4

- 12.1- 14.0

- 12.0

- 10.0

- 8.0

- 6.0

- 4.0

- 2.0

0.0

2.0

Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)

letters parcels express 18.3

- 25.0

- 20.0

- 15.0

- 10.0

- 5.0

0.0

5.0

10.0

15.0

20.0

Q1/09 Q2/09

year

-on-

year

var

iatio

n (in

%)


Source: UPU.

Domestic service International service

- 8.4

- 1.8

16.0

- 23.4

- 17.7

2.0 1.8

- 1.8

- 6.0

6.06.6

1.42.1

7.88.4

6.7

-7.9

- 10.0

- 8.0

- 6.0

- 4.0

- 2.0

0.0

2.0

4.0

6.0

8.0

10.0

80/4Q80/3Q80/2Q80/1Q

year

-on-

year

var

iatio

n (in

%)


Source: UPU.

Source:UPU

Source:UPU


IV. Postal financial servicesPostal operators providing financial servic-es, or offering these services in partnershipwith other institutions, continued to see aninfluxofcustomersanddeposits.Thistrend,already observed in 2008, was partly dueto customers’ perception of postal financialservicesasa“safehaven”.Thirtypercentofsurveyparticipantsnotedan increase in thenumberofnewaccountsduringthefirsthalfof2009,while12%notednochange;abouthalfofsurveyparticipantsdidnotofferpost-al financial services (Figure 13).An increasein remittance transactions was reported by14%,while28%reportednochangeandthesamepercentagereportedadecrease.

Somefiguresfromselectedoperators:

• PostFinance,thefinancialbranchofSwissPost,continuedthepreviousyear’sprom-ising performance in 2009. In the firstthreequartersof2009, itwasmainlyfi-nancial services that accounted for the11.5%netprofitgrowth thatSwissPostsawoverthesameperiodinthepreviousyear:– Thenumberofnewcustomersinthe

firstthreequartersof2009increasedby4%overthesameperiodin2008;

– The number of new accounts in-creased by 5% during the same pe-riod;

– Theamountsindepositsincreasedby36%;

– Thefirst threequartersof2009out-performedthepreviousyearby75%.

• Germany’sPostbankalsoreportedhigherfigures:– Total volumeof savings increasedby

21%inthefirsttwoquartersof2009;– Marketshareincreasedby10.3%;– Thenumberofprivategiro accounts

remainedconstant;

– Depositsingiroaccountsincreasedby5.4%;

– The number of new accounts(222,700) showed a rate of growth11.7%lowerthanthepreviousyears’growth.

• TheBancoPostaofPosteItalianereport-edanotherfirsthalfofgrowth:– Financial services were an important

driver of Poste Italiane’s overall rev-enue growth, with the market seg-ment reporting8.6%growthduringthefirsthalfof2009comparedwiththesameperiodin2008;

– The number of Banco Posta currentaccounts increased by 2.6% over2008.

• France’s Banque Postale also posted thepositivefigures:– The number of active customers has

increasedby3.8%sinceJune2009;– In the first half of 2009, there were

more than 380,000 new giro ac-counts,a13%increaseoverthesameperiodin2008;

– Theoperatingresultincreasedbyover30%.

• South Africa’s Postbank will be corpo-ratizedasa stand-alonecompany in theSouth African Post Office Group from2010. Its deposits increased by 14% in2009 (fiscal yearending inMarch) com-paredwith2008.


Figure12:Postalfinancialservices

0%

25%

50%

75%

100%

- New accounts opened - Money transfer (remittancesoperations)

service notoffered (NA)

increase

no change

decrease



0%

25%

50%

75%

100%

- Opening hours - Number of permanentpost offices

- Number of distributionsper week

- Number of sortingcenters

increase

no change

decrease

Source: UPU.

Source:UPU

V. Further insights –Measures adopted to mitigate the impact of the crisisMany operators adopted measures duringthefirst half of2009 to limit the impactofthe financial and economic crisis, measuresaimed at offsetting declining revenues bycutting costs in different areas of businessactivity.

1PostalnetworkAmong themeasuresmost frequentlymen-tioned in the survey, relating to the postalnetwork, were reduced business hours andfewer sorting centres in operation (11%),followed by an increase or decrease in thenumber of permanent post offices (10%)(Figure13).Whileanoverwhelmingmajoritydidnotreportintroducinganycrisismeasuresrelating to thepostalnetwork, this facthastobeviewedinthecontextoftheregulatoryframework (provision of the universal serv-ice).Furthermore,suchmeasuresmayalsobeintroducedwitha time lagand thusnotbefeltuntilthesecondhalfof2009.

Figure13:Measuresadopted–postalnetwork


0%

25%

50%

75%

100%

- Number of hoursworked

- Wages paid(hourly/monthly

wages and salaries)

- Profits - Postal servicepricing (20g domestic

letter tariff)

- Investmentsundertaken (amount)

- Number ofnew/ongoing projects

increase

no change

decrease

Source: UPU.

0%

25%

50%

75%

1 00%

- Diversif ication ofpostal services

- Automation - Outsourcing ofservices

increaseno changedecrease

Source: UPU.

Source:UPU

Source:UPU

Figure14:Measuresadopted–financialindicators

Figure15:Measuresadopted–servicesoffered

2FinancialindicatorsAsameasuretodealwiththecrisis,asmanyastwothirdsofsurveyrespondentsreportedareductioninthenumberofneworongoingprojects (Figure14).At thesame time,over16% increased new or ongoing projects tomanage the crisis, indicative of the varietyof strategies that were adopted. Similarly,the amount of investment being made wasreduced by some respondents (29%) andincreased by others (57%). An increase inwagesandhigherpostalpricing(20gdomes-ticlettertariff)werealsoobservedinthefirst

halfof2009(33%and22%ofrespondentsrespectively).Togetherwithnumberofhoursworked,thesearetheareaswherethe leastchangewas reported,whichagaincouldberelatedtotheregulatoryframeworkasmuchas to the sector employment situation. Sev-eral operators had introduced measures intheseareasbythethirdquarterof2009.Per-hapslessameasuretaken,andmorearesultof the crisis, as many as 83% of survey re-spondents reported declining profits duringthefirsthalfof2009.

3ServicesofferedInthecurrenteconomicandfinancialenviron-ment, automation and outsourcing of serv-ices, often viewed as “classical” cost-savingmeasures, have been stepped up by 37.5%and14.3%ofrespondentsrespectively(Figure15).Atthesametime,14.3%ofrespondentsreported having decreased their outsourcingofservices.Thediversificationofpostalservic-

eswasreportedasunchangedbyallsurveyre-spondents,indicatingthatdecisionsaffectingtheservicesportfoliowerenotseenasprimarycrisis-relatedmeasures.Thediversificationthatwastakingplacewasaimedinsteadatimprov-ing customer service, introducing innovativeproductsoroffsettingtherevenuedeclinesin“traditional”areas (mailvolumesaffectedbyelectronicsubstitution).


4OtherareasIn the category “Other areas”, as much as57%ofsurveyrespondentsreportedthatthelevel of competition had increased (Figure16).However,itisnotquitecleartowhatex-tentthisisdirectlyrelatedtothecrisis.Whileinternationalization (entry of foreign opera-torsintomarketsotherthantheirhomemar-kets)canalsobeseenasastrategyforweath-ering thecrisis, therearecasesofoperatorsforcedtoretreatfromforeignmarketstolimittheirlossesandthusgivebackmarketshareto their competitors. It should also be keptinmind that the levelof competition in thenationalmarketiscloselyrelatedtotheregu-

latory framework, although, because of theeconomic crisis, plans to open up the mar-ketwereputonholdorabandonedinsomecountries.An increasingnumberofpartner-ships,asreportedbyonethirdofsurveypar-ticipants, fall into theareaof strategicdeci-sions for improving thecompany’s responseto the crisis and benefit from synergies tobetter position the company in the future.A totalof38%of respondents reportedanincreasingnumberoffranchisedpostofficesoragenciesduringthefirstquarterof2009,thus helping to cut costs while maintainingtheservicenetwork.

Figure16:Measuresadopted–otherareas

0%

25%

50%

75%

100%

- Level of competition(national market)

- Number of partnerships - Number of franchised postoffices or agencies

increase

no change

decrease



VI. Conclusion:avenues for further analysisThepresentanalysis reveals that the impactofthefinancialandeconomiccrisis is felt inallmarketsegmentsofthepostalsector,al-though in some segments results are morepositive than in the first assessment under-takeninMarch2009.Incertainmarketseg-mentsandforcertainoperators,performanceseemstohaveimprovedcomparedtotheear-lier assessment. However, it is probably tooearly todeterminewhether this canalreadybe consideredasfirst stepsoutof the crisisforthesector,atatimewhenonlyfewopera-torshavereleasedresultsforthethirdquarterof2009.Anassessmentofthesituationuntiltheendof2009willcontributemoreinsightandrevealfurtherhintsastowhetherapos-siblereboundcanalreadybeanticipated.

Furthermore, a more thorough assessment,coveringanincreasingnumberofpostalop-erators4 and increasingnumberof countries

andregions,andalsotakingintoaccountanincreasingnumberofoperatorsfromthede-velopingworld,wouldhelpdrawingamorecomprehensive and more differentiated pic-tureoftheextentofthecrisisanditsimpacton the postal sector in different regions ofthe world. Continued analysis would there-fore provide additional insight and furtherindicators that would help gauging tenden-ciesanddrawinglessonsfromtheGreatDe-pressionastoeventuallyleadingtoanassess-ment of 2010 tendencies. As the evolutionof franking revenues in selected countriesduring1924-1938demonstrates, the impactof the recessionwas feltby the sectorwitha slight time-lag. Disparity across regionsmay exist even though a general trend canbeidentified.Recoverywasmuchlessabrupt(softslope)thanthearrivalofthefirstsignsoftheimpactoftheGreatDepressiononthepostalsector.

4 Afurtherchallengeconsistsinthefactthatmanyoperatorsconsiderquarterlydataonvolumetrendsasconfidentialandthereforedonotsharesuchdata(despitefullconfidentialityensuredinthepresentstudy)orsimplydonotcompilesuchdata.

Figure17:Evolutionofpostalfrankingrevenuesinthe1920’sand1930’s(1924=100)



Developments in the third quarterand outlook – views from the pressOperators’results“SwissPostsaidtoday it increasednetprof-its by 11.5% over the first three quartersof 2009 after a half-year decline, thanksto strong growth in its financial services.”Source: Swiss Post www.laposte.ch.

“Thecore letterbusiness,PostMail, sawthevolume decline continue unabated over thefirstninemonthsof2009,with4.9%feweraddressedlettersthanforthesameperiodin2008.Theeconomiccrisishasreinforcedthedeclineresultingfromelectronicsubstitutionand volume consolidation by customers. (..)Asa resultof thesedevelopments,PostMailrevenuesdropped3.8%(...).”Source: Swiss Post www.laposte.ch

“The volumes of mail delivered by Itella fellsignificantly. First-class letter volumes de-creasedby8%andparcelsby13%.Thevol-umeofaddressedlettershasbeenfallingforaperiodoffiveyears.”Source: Itella

“Theeconomic conditions reflectdifferentlyon Itella’s various services. On the whole,volumesarenot showingany tangible signsof the expected upswing, which means thefull-yearnetsalesandoperatingprofitwillbeweakerthanayearearlier.ItellaMailCommu-nicationhasbeenabletopartlycompensatefor the decline in delivery volumes throughproductivity-boostingmeasures, but the fullimpactofthesemeasureswillbeseenonlyintheupcomingyears.”Source: Itella

“Despite tough economic conditions, Aus-traliaPost’srevenuegrewby$26.1million(or0.5%) in 2008–2009 to reach $5.0 billion,withgrowthinallthreecorebusinessareas.(..) Inrecentyears,wehave investedheavilyinbroadeningourrevenuebaseandcutting

ouroperational costs. So those strategic in-vestmentsmeantthatwewerewell-preparedforthetoughereconomicconditionsexperi-encedthisyear.”Source: Australia Post

“A stabilizing economic environment led toimproved volume trends during the (third)quarter, while UPS’s international businesscontinuedtoincreasemarketshare(..)Oper-atingprofitdecreasedto$929million,asthebenefits of substantial cost reductions andproductivitygainsweremorethanoffsetbythe economic impact of lower volumes andchangesinproductmix.”Source: UPS


“Developments during the first three quar-tersofthe2009financialyearshowthattheeconomicdownturnhasalsohadtheexpect-ednegativeimpactontheregionsandmar-ketsinwhichAustrianPostoperates.Source: Austria Post, www.post.at.

BusinessoutlookMoreover, regardless of general economictrends, we must prepare for a fall in lettervolumesinthefuture”.Source: Itella.

Theeconomicdownturnwillcontinuetohaveanegativeimpactonthelettermailandpar-cel delivery volumesofAustrian Post. Largecompaniesareexpectedtocontinuethecost-cuttingmeasurestheyhaveinitiated,leadingto ongoing pressure on prices and deliveryvolumes. Furthergeneral economic risksex-ist, suchas increasedcompetitive instability,price pressure, declining consumer spend-ing and potential loss of customers alongwiththerelatednegativeeffectsonAustrianPost’s letter mail and parcels business. Ac-cordingly, the downward trend in revenues

isexpectedtocontinue.Source: Austria Post, www.post.at.

“I’mencouragedbythesignsofeconomicre-coverythatarebecomingapparent,althoughwe still have a long way to go,” said ScottDavis,ChairmanandCEO.Source: UPS.

“...Wehaverevisedourforecastsforglobaladexpendituregrowthdownwardsthisyearto-9.9%fromthe-8.5%figurepublishedinJuly (..). We are still confident that the sec-ondhalfoftheyearwillbemuchlesspainfulfortheadmarketthanthefirsthalf,andweexpect themarket tohitbottombefore theendof2009.(...)Wenowforecastameagre0.5%recovery in2010,downfrom1.6%inJuly. Thisfigure showsa sharpdisparitybe-tweendevelopedmarkets,whichweexpecttoshrinkanother2.9%,anddevelopingmar-kets,whichweexpecttoseegrowbyaveryhealthy 7.8%.” Zenith Optimedia, Press Re-lease, 19 October 2009.

UPU

UNIVERSALPOSTALUNION

UNIVERSALPOSTALUNION

Contact

InternationalBureauoftheUniversalPostalUnionEconomicsandRegulatoryAffairsDirectorate(DER)3000BERNE15SWITZERLANDInternet:www.upu.int

Date post:	28-May-2020
Category:	Documents
Upload:	others
View:	3 times
Download:	0 times

The global economic and financial crisis: further …...The global economic and financial crisis:...

Documents