The Postal Evolution

 

The Postal Evolution 

Bruhaspati Samal

General Secretary

Confederation of Central Govt. Employees and Workers

Odisha State Coordination Committee

As the Universal Postal Union (UPU) celebrates 150 years of existence on October 9, 2024, its Director General, Masahiko Metoki, emphasized the organization’s enduring mission: connecting people through reliable postal services. Despite significant transformations in communication and logistics, postal networks continue to play a vital role, but face unprecedented challenges in today’s digital world. From the first letter that travelled across borders to today’s complex global logistics network, the postal systems worldwide are striving hard to stay relevant in an era dominated by digital technology and rapid e-commerce growth. It is clear that traditional postal services are at a turning point. Physical mail volumes, once the foundation of postal revenue, have plummeted across the globe. The decline in letter mail—accelerated by the rise of digital communication technologies like email and instant messaging—has led to a fundamental shift in how postal networks operate. According to UPU reports, global mail volumes have dropped by over 45% since 2007, as consumers and businesses move away from paper communication. Yet, as Metoki pointed out in his anniversary address, postal networks are not obsolete; they are evolving. The challenge now lies in reimagining their role to meet modern needs.  

Illustratively, India Post, the largest postal network in the world having its extensive network of over 1.65 lakh post offices, has experienced this decline firsthand. In the early 2000s, India Post handled nearly 16 billion pieces of mail annually. By 2021, that number had fallen below 3 billion, a stark reflection of the digital age. Recognizing the need to adapt, India Post has embraced digital banking, e-commerce partnerships, and online service platforms. Its India Post Payments Bank (IPPB) offers digital financial services, reaching even the remotest parts of the country. With introduction of Core Banking Solution having eBanking, Mobile Banking, ATM, ePass Book, ECS facility and Inter-operability through NEFT, India Post has digitized the Post Office Small Savings Scheme. India Post has also launched parcel tracking systems and online platforms like Dak Mitra, enabling customers to book parcels, track shipments, and access postal services from their mobile devices. Facilities like Real Time Delivery Updation, electronic clearance of letter boxes, Automated Mail Processing Centres, Radio Frequency Identification, Click N Book etc have accelerated the digital movement of mail services of India Post. In India, the growth of platforms like Flipkart and Amazon has been a boon for India Post, which has become a vital partner in last-mile delivery, particularly in rural and semi-urban areas. As a result, parcel volumes at India Post have surged, increasing by 33% in 2021 as more people shop online.

The same story is playing out across the world. The United States Postal Service (USPS), which once relied heavily on traditional mail, has seen mail volumes decline by 28% between 2007 and 2020. However, parcel volumes have skyrocketed, increasing by 110% in the same period. This shift, driven by the rapid expansion of e-commerce, presents an opportunity for USPS to reinvent itself as a logistics powerhouse. Innovations such as the “Informed Delivery” service, which allows customers to digitally preview their incoming mail, have helped USPS remain relevant in the digital age. The rise of online shopping has caused parcel volumes of Royal Mail to increase by 31% in 2021, while letter volumes declined by 20%. To cope with this shift, Royal Mail has heavily invested in automation and digital services. Japan Post has also felt the pressure of declining traditional services with decrease by 10% annually since 2016, leading the postal service to focus on the growing e-commerce sector. Japan Post has partnered with major e-commerce platforms like Rakuten to streamline logistics and expand its parcel delivery services. Cutting-edge robotic sorting systems and digital platforms have been introduced to increase efficiency, signalling a strong commitment to modernization. Similar efforts are being made by postal networks like La Poste in France and Swiss Post, both of which have expanded their digital banking services to keep pace with the demand for online financial services. This move aligns with the UPU’s vision of postal networks serving as key drivers of digital inclusion.

The global boom in online retail, expected to generate $6.3 trillion in sales by 2024, has created immense demand for parcel delivery services. As a result, parcels now account for over 60% of postal revenue worldwide, a dramatic shift from just 20% two decades ago. This transformation reflects the evolving role of postal networks, from communication enablers to logistics giants.

Despite these encouraging developments, postal networks face significant challenges in adapting to the digital age. The shift from physical to digital communication has eroded the core revenue of many postal services, forcing them to invest heavily in new technologies, automation, and workforce training. The competition from private logistics companies and tech giants further complicates the situation, as they often have more resources and flexibility to adapt quickly. Nevertheless, the opportunities for postal networks in the digital age are immense. As e-commerce continues to grow, the demand for efficient and reliable logistics services will only increase. Postal systems, with their established infrastructure and trusted brands, are well-positioned to seize this opportunity. By embracing digital innovation, focusing on customer-centric solutions, and expanding their service offerings, postal networks can continue to play a vital role in global trade and communication.

Reflecting on the UPU’s 150-year journey, Director General Masahiko Metoki highlighted the resilience and adaptability of postal systems worldwide. The challenges facing postal services today are significant, but the potential for transformation is equally great. Postal networks are no longer just about delivering letters; they are evolving into comprehensive service providers, offering everything from financial services to digital solutions. As the UPU marks this milestone anniversary, the future of the postal network lies in its ability to continue connecting people, not just through physical mail but through digital platforms that meet the needs of a rapidly changing world.

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