As a vitally important tool in national and international social-economic ecosystems during regular years, the postal service is more important than ever in a major public crisis like the one we face today. With COVID-19 shutting down workplaces and putting entire business sectors into stand-by, the transition to digital communication and remote working has been rapid. However, the exchange of physical goods is still needed, which is why national postal services find themselves on the list of “critical infrastructure.” In this spirit, the postal operators have shown their solidarity and are committed to supporting governments, public administrations, and citizens during this crisis.

To combat COVID-19, many people are recognizing that that multilateral cooperation is the way out. The pandemic has spotlighted the crucial need for international collaboration in all domains. It is within this framework that the Universal Postal Union (UPU) played an important role during this crisis, serving as a forum for sharing best practices, giving solutions to maintain resilient international postal systems and services, and supporting the postal operators in offering safe services to their citizens.

This is no small task. Of the pre-COVID-19 international volumes, more than 70% passed through the UPU channel of postal companies (letters and small parcels). The crisis disruption of the international postal supply chain led to nearly one in two international mail items being stranded, international volumes dropping by 23%, and customs clearance times increasing by a factor of 32. In light of the continued pandemic, volumes will likely continue to decline due to reduction in capacities as airlines gradually recover and an eventual increase in domestic e-commerce to reduce overall demand for international shipments. Therefore, keeping this market relevant will be a challenge.

Opportunities vs. Threats

The COVID-19 pandemic will offer several opportunities to the postal sector, but it can also pose grave danger to postal operators’ ability to provide crucial service to citizens and to its financial situation if decisive action isn’t taken to address the challenges both in the short and long-term. Indeed, the postal sector relies on the sale of postal products and services to fund the operations, and these sales are plummeting as a result of the pandemic. The sudden drop in mail volumes, the most profitable revenue stream, is steep and may never fully recover. As example, Swiss Post, which took first place in the recently published ranked Integrated Index for Postal (UPU) 2019, generated a lower result in the first quarter of 2020 than in the prior-year period. Group profit fell by 46 million, while operating profit came in at 57 million francs below the comparable figure for 2019. The decline in profit is principally attributable to the decline in volumes in the letter business (–5.6%) and additional expenses incurred to secure operations. In this regard, there is an urgent need to prioritize and further develop the main postal industry pillars (standardization, digitalization, e-commerce, transport, e-cash) with regards to the evolution of the market behavior and the postal socio-economic environment requirement.

The present COVID-19 crisis will not mark and impact only our postal activity but the history of humanity in general. In this fact, the rapid spread of the pandemic and the containment policies aimed at managing the crisis have changed the way we live and consume. This is the new reality that the postal industry will likely face for an indefinite period of time. The last updated parcels market figures from Apex Insight News show that the overall market volume fell by 11% and revenue by 13% in January 2020 vs January 2019. China Post, as Asian e-commerce giants, have released figures for February that show that it performed better in February, with parcel volumes being flat and revenues being up by four percent compared to February 2019. In France, during the fourth week of confinement, the sending of packages had not weakened and 15 and 7 million packages had been respectively delivered with the two Colissimo and Chronopost services. Also, in one day, more than 50,000 packages were deposited into France’s postal stream, surpassing even those daily volumes of the Christmas period.

The Postal Sector Post-COVID

Indeed, there will be a pre-COVID-19 era and a post-COVID-19 era. So, new horizons for the postal sector should be sketched within its socio-economic environment as much as at the national, regional, and international levels. In the current coronavirus context, posts, like other sectors, are currently faced with a situation for which they were not specifically prepared in advance and to which they must adapt their processes by shaping tactics to contribute to the collective effort of combating this epidemic. As an example, many postal operators have implemented temporary procedures to replace the “proof of delivery;” postal drivers in many countries are nowadays not allowed to collect the recipient’s signature or to have any contact with the recipient at all. But for medium and long term, adequate strategies to shape the future of postal activities in the light of the major post-COVID-19 socio-economic trends should be defined.

So, with the objective of facing the post-COVID-19 economic crisis and the changes in behavior and the requirements of the customers related thereto, the posts should give a particular focus to the aforementioned five pillars. The post-COVID-19 era will be marked, as shown via the market reactions to the crisis, by an acceleration of the use of the digital and e-commerce solutions. Also, particular attention has been observed concerning hygiene’s aspects with respect to the delivery and cash payment services.

Indeed, we are witnessing an effort by the world postal community to adjust the current norms and standards to comply with hygienic requirements dictated by the pandemic to ensure the health and safety of postal clients and workers. The estimated survival time on cardboard for SARS-cov-2 of the virus pathogen may be up to 24 hours. Thus, all the UPU standards governing the postal supply chain especially (quality, security, social accountability, advanced electronic data, etc.) should be adjusted to address the COVID-19 outbreak and its impacts’ outbreak. These standards might need to integrate new dimensions of compliance with hygienic requirements, in particular those arising from World Health Organization recommendations on the relevant subject.

On another strand, the adjustment of the postal standards should take into account the creation of infrastructure, for pandemic surveillance “raises fears about scope creep for the future.” Whether data collected will be used by agencies other than public health while respecting key provisions of personal data protection standards is unknown. However, the blockchain technologies and postal digital qualified signatures could be used to address the associated security problems.

The postal service, as a historic player in connecting citizens to business to administrations, is grappling with its greatest challenge yet: the digital disruption of COVID-19. The impact of this pandemic is felt by all around the world. It has changed our way of working, playing, socializing, and learning. During this crisis, we have observed that operators and administrations made a quick transition to conducting operations almost completely online. So, the need to urge the highlighting of digital postal services as the efficient, central communication hub and secure tool to support this transformation of working modes is imperative.

In this regard, the key success depends on the capacity to promote and to establish the notoriety of the postal brand on the internet. In this regard, a UPU ground-breaking initiative based on the .post (the first top-level domain internet space governed by a United Nations body) should be the postal unified response to gain a foothold in this fast-moving environment and to embrace the new paradigm of e-society.

Hence, the postal communities should adapt their organizational culture and strategy to highlight e-marketing and further develop .post as the main postal brand in the internet and key component to bring an inclusive postal ecosystem for the digital economy. In addition, the digital postal solution should symbolize inclusion, with the unique values of trust offered by .post. It would offer a post-specific internet space with a wide range of services including trusted postal electronic address, e-addressing in three dimensions, e-registered mail, electronic postal identities, postal e-archive and e-box, postal e-mail, and e-payment systems.

The Role of E-Commerce

Circling back to e-commerce, we saw that while the pandemic had negatively impacted the physical stores, it was great opportunity for e-commerce activities and postal delivery services. Indeed, several studies show that as consumers stay away from physical stores, e-commerce revenue increases.

However, with a lengthening list border closures and the disruption to air routes worldwide during the crisis, several difficulties have arisen with respect to commercial air flights that transport most of the international postal flow transport. Also, the ability to switch to the land and cargo transport wasn’t trivial. The postal community is urgently called to adjust their standards and process of postal transport in order to integrate the land and the cargo transport in the postal supply chain.

As futurists, it’s now the time for the postal community to investigate more the delivery drones and droids technologies. The goal is to position the posts as the main players in the ecosystem; the postal incumbents need to set up their game by focusing on standardization, regulation, and collaboration with the other stakeholders.

As operators and administrations are adjusting their business continuity plans as they look forward to a post-COVID-19, it’s the time to market and promote the postal services under the three dimensions (physical, financial, and electronic) as the mains pillars of these plans. Also, we should rethink regulation by reconsidering recalibration of mail service levels (e.g., frequency of delivery, service standards, delivery points). The challenge is not to establish mega projects with big investments but rather intelligently updating what we had already on the basis of process facility and organization flexibility in order to keep the parcel and last-mile delivery sectors healthy. Due to increases in multichannel retail, e-commerce, B2B, and same-day or next-day delivery offerings, both challenges and opportunities abound in this space.

Dr. Ahmed KADA is acting as vice chair of postal operational council for the Universal Postal Union, and he is the Director International and Cooperation for GBAM.

This article originally appeared in the July/August, 2020 issue of Mailing Systems Technology.