Reinventing The Postal & Parcel Industry

REINVENTING THE
POSTAL & PARCEL
INDUSTRY
November 2021
Copyright © 2021 Accenture. All rights reserved.

Agenda
I. Industry Overview
II. Trends and
Disruption
III. The way forward
–Strategic Options

Accenture in the postal and parcel industry
We have worked with a wide range of postal and parcel organisations globally, including 38 of the top 40 operators
4000+
Postal projects
delivered, helping
executives globally
70%
of Global Mails & Parcels
tracked by systems we
worked
2500+
Pool of Postal and Parcel
practitioners around the
world
38 of 40
of largest parcel
organisations are
Accenture clients
90%
of the Global Postal
clients already been
served by Accenture
15 years+
of Postal Thought
Leadership

A summary of what we are seeing in the Global Postal & Parcel Industry
Pre-COVID view
Mail volumes declining
Many governments
deregulating and
privatising
Parcel volumes
increasing thanks to
eCommerce
Stagnant revenue
growth, declining
margins
Diversification and M&A:
limited success
Postal Players slowed by
legacy IT and culture

Accelerated Parcel Volume
Growth & Mail Volume
Decline
2020 represented a historic pivot for postal organisations driven by
eCommerce and parcel delivery
eCommerce and parcel delivery driving growth
Note: : Includes Austria Post, Australian Post, Aramex, Bpost, Canada Post, CTT, DPDHL, Fedex, La Poste, POL, Post Italiane, PostNL, Posti, Posten Norge, Post Nord, Royal Mail, Swiss Post, UPS,
USPS, Yamato; (2) Other includes revenue from retail, financial services and other value-added services
Source: Annual reports; Accenture Client Value Services
Industry Revenue Breakdown
[FY-12/2016 – FY-12/2020]
+$61 bn
+$5 bn +$46 bn
+$4 bn
-$5 bn
+$8 bn
Parcel
Revenue
Logistics
Revenue
Total
Revenue
Posts &
Integrators
2019
$426 bn
-$2 bn
Others(2)
Total
Revenue
Posts &
Integrators
2016
$358 bn
Logistics
Revenue
Total
Revenue
Posts &
Integrators
2020
Mail
Revenue
-$5 bn
Others(2)
$469 bn
Mail
Revenue
Parcel
Revenue
+$68 bn
+$44 bn

COVID has also changed the economics with parcels growing more
profitably, reversing years of declining margins
Y-o-Y Revenue Growth (%) Drivers: Mail Revenue Growth vs Parcel Revenue Growth
[FY-12/2018 – FY-12/2020]
Note: (1) Excludes Japan Post, NZ Post, POL & AN Post due to unavailability of data
Source: Capital IQ, Bloomberg, Company Reports; Accenture Client Value Services
-3.9%
-6.2%
Posts
6.2% 7.2%
14.0%
26.6%
Integrators Posts
-4.3%
-11.8%
Posts
1.1%
3.6%
Posts
Mail
Revenue
Parcel
Revenue
2.8%
5.8%
9.6%
18.9%
Integrators Posts
0.8% 0.2%
-2.0%
2.8%
Integrators Posts
14.1%
10.4%
Integrators Posts
-26%
8.2%
3.7%
8.8%
6.0%
Integrators Posts
+0.5%
+2.3%
Revenue Growth Change in Volume Unit Revenue Growth EBIT Margin
Revenue Growth (1) Change in Volume Unit Revenue Growth EBIT Margin
Pre COVID-19 (FY 18 - FY 19)
During COVID-19 (FY 19 - FY 20)
Increased parcel profit margins due to the COVID -19 Pandemic

COVID changed the new normal – there are more online shoppers buying
more online than ever
27% 31% 32% 32% 33%
0%
10%
20%
30%
40%
50%
60%
0.0
2.5
2.0
0.5
3.0
1.0
1.5
25%
2023E
2018 2019 2020
2.6
2021E 2022E
1.9 2.1
2.3 2.5 2.5
+12%
No of online buyers - worldwide
% of population
# of online buyers world-wide
[2018- 2023E; Bn, % of Population]
Highest growth during COVID
# of Parcels per household
[2018 - 2020, # of parcels](1)
109 108
124 132
165 172
USA China
2020
2018 2019
Note: (1) Computed parcels per household using population and household data from government publications
Source: eMarketer; Accenture Client Value Services
Grocery ecommerce buyer growth in USA
[2018-2020; Mn Buyers, % of Population]
48%
0%
50%
100%
25
100
0
50
75
125
150
76.3
28%
2020
2018
34%
2019
92.3
131.6
+43%
Online grocery buyers - USA
% of population
50% of groceries’ online sales growth
came from people who did not shop
online for groceries in the months
preceding the crisis
13%
Consumer
electronics
18%
Food & beverage Health &
personal care
Toys & hobby
36%
74%
Furniture
16%
36%
9%
35% 35%
12%
2020 2021E
Retail categories that witnessed above average growth during COVID
US retail e-commerce sales growth by category
[2020 - 2021; % change]
Trend 1 - Increase in buyers along with parcels per household and emerging categories during COVID

Consumers’ delivery expectations are high while the propensity to pay for
is low overall
For Retailers:
Speed of delivery has strong positive impact on retail KPIs
4x
>50%
2x
conversion of product to sale and a significant
increase in year-on-year sales has been driven by same
day delivery
of Target’s digital growth is driven by
same day fulfillment options
spend by amazon prime members than
non-prime members in a year
Source: BMO Capital Markets : Delivery Dilemma: How E-Commerce Is Disrupting Last Mile Logistics; Accenture Client Value Services.
For Consumers:
Same day delivery has high value and high willingness to pay
82% 75% 67% 63% 59%
66%
Timing
flexibilt
y
Weekend
delivery
Delivery
tracking
Accelerated
delivery
Same day
delivery
Easy
returns
Closer
pickup
locations
63%
Willing to pay
Valuable
Customers expect visibility free of cost
Highest willingness to pay for same day
PRICE FREE FAST FREE + FAST CONTROL
We are here
Trend 2 – Consumers expect fast and free delivery, and it makes sense for retailers to comply

Shift to local fulfillment and micro-fulfilment centres to get faster cheaper
eCommerce deliveries
Notes: (1) DC: Distribution Center (2) MFC: Micro-fulfilment Center
Source: MWPVL.com, amazon.com, The last-mile delivery challenge by Capgemini 2019; L.E.K.; Accenture Client Value Services.;
Amazon Fulfillment Centres and Delivery Stations in Europe
Instant Delivery
Same Day Delivery
12%
57%
12% 20%
15% 19%
43%
24%
Warehouse
Retail
Storefront
Retail
Backroom Dark store
Micro fulfilment poses additional requirements for flexible dispatch schedules and dynamic routing for last mile
Organisations’ preferences for fulfilment location for faster delivery
Trend 3 – Radical change in retail supply chains with inventory getting closer to consumers

Sustainability is an issue that will lead to new delivery constraints and
opportunities that Postal Organisations need to help shape
Trend 4 – Sustainability become a key competitive differentiator
• There is a potential further drop in congestion and emissions
from switching to smaller vehicles and delivery at less
congested hours.
• After being delivered to the local fulfilment centre, deliveries to
customers are made by lower emission vehicles.
Source: Accenture’s The Sustainable Last Mile 2021

Congestion from eCommerce deliveries is also a real-life issue especially
for large cities and urban centers
Trend 5 – Congestion becoming an issue in Cities and Urban centers
London Beijing
13,305
31,955
2020 2026
+15.7%
8,197
12,260
2020 2026
+6.9%
99,488
211,136
2020 2026
+13.4%
Unsustainable
number of delivery
trucks would be
required to fulfil last
mile deliveries in
the next 5 years
New York
Lockers / PUDO Points
Low impact / Light vehicles
Green City Infrastructure
Planning
The Transition
Cities –
Leading by example
towards a greener
change
Vancouver, CA Los Angeles, USA
The Transportation 2040 Plan
Strategy for efficient movement of goods &
services
 Low-impact vehicles, such as cargo tricycles
and electric or low-emission trucks, are
encouraged, as well managing on- and off-
street loading spaces to ensure access to
homes and businesses
 Complementary tools are used, such as zoning,
to create more livable neighborhoods, dividing
the city into zones of activity
 Shifting high volume goods movement to other
means of transport.
The Green New Deal
LA’s GND is an urban green new deal that sets
the basis for local production
 The California Sustainable Freight Action Plan
has been crafted to work toward a sustainable
freight system
 It requires work to be initiated on corridor-level
freight pilot projects within the State's primary
trade corridors that integrate advanced
technologies, alternative fuels, freight and fuel
infrastructure, and local economic
development opportunities
Source: eMarketer; Statista; Government Reports Accenture Client Value Services.
Estimated number of delivery trucks (# , CAGR)

Automated vehicles are expected to streamline costs and
convenience if they can overcome real life constraints
Trend 6 – Autonomous vehicles and technology on the horizon
Source: Accenture Client Value Services.
Benefits
Autonomous aircrafts will be able to
carry packages along direct routes
with limited supervision
Small autonomous robots will be able to
deliver heavier packages with limited
supervision
Semi-autonomous vehicles will allow
drivers to work more efficiently,
performing administrative tasks in transit
Effective
Markets
Point to point and rural/remote Campuses and some urban settings All
Issues
Parcel weight restrictions
Airspace regulations
Productivity (pilot to drone ratio)
Speed and size restrictions
Consumer reactions to vehicles (vandalism)
Last meter
Automotive regulations and labor/oversight
Last meter
Postal
examples
Cost $$ $$ $$$
Drones Droids Autonomous vehicles
Comments
 Drones are 2-5 years away from reaching the plateau as
many players have already completed pilot programs. They
can serve point-to-point deliveries and may see
generalized use for home delivery in late future
 Droids are 5-10 years away from reaching the plateau but
are still being used by Amazon as pilots
 Autonomous vehicles are more than 10 years away from
reaching the plateau due to traffic
Innovation Trigger Peak of inflated
expectations
Trough of
disillusionment
Slope of
enlightenment
Plateau of
Productivity
Expectations
Time
Autonomous
Vehicles
Droids
Drones
Global Logistics
Visibility
Intelligent
Connected
Infrastructure

1. INCUMBENTS 2. MARKETPLACES 3. RETAILERS 4. STARTUPS
Reinventing themselves to
stay competitive
Building end-to-end
capabilities either in-house or
via network
Owning the last mile via
different models
Disrupting the value chain with
innovative ideas
There has been a constant shift in
the strategies followed by major
incumbents
With a focus on reliable logistics and
faster delivery, marketplaces are
evolving
Brands are expanding into online
and want to own the delivery
experience
Supply chain and logistics tech
startups attracted ~$20bn/year
globally over the last 3-4 years
 Expanding weekend capacity
 Rationalising offerings’ portfolio
 Strategic partnership to gain
eCommerce exposure
 Amazon has reduced dependence
on 3PLs for more than 50%
deliveries
 Cainiao promises domestic
deliveries at $1 cost, within 24
hours in China through
aggregation of 3PLs
 Positively reflecting in the growth
of online group sales from 4% to
18% in four years, for Target
 Walmart spending 70%+ US’
CapEx on eComm, Supply Chain &
IT
 From time-sensitive deliveries of
restaurant food to solving for easy
returns
 Innovating last-mile through
PUDO facilities or drones
Competition for parcel delivery and logistics will come from those with
deep data and deep pockets
Source: Company Reports; CBInsights; Accenture Client Value Services
Asset Heavy Asset Light Inorganic Organic
Trend 7 – Competition driven by technology, data and online experience

Emerging technological tools and investments are paving the way
for innovation in the Post & Parcel industry
Trend 8 – All organisations are digital organisations
Source: Accenture Client Value Services;
Digital Tool
Select Use
cases
Select Start-
ups examples
Digital Tool
Select Use
cases
Select Start-
ups examples
Internet of Things
 Warehouse automation
 Supply chain visibility
 Fleet management
Robotics
 Automation via RPA
 Robotics as a Service
(RaaS)
Warehouse
Automation
 Automated guided
vehicle
 Automated storage and
retrieval
Blockchain
 Smart contracts –
quicker approvals
 Process transparency,
item traceability
Artificial
Intelligence
 AI-based demand
forecasting
 Self-driving AI and smart
road technologies
Alternate
Delivery Models
 Technology-backed
Parcel Lockers, PUDOs
 Drone delivery,
autonomous vehicles
Data Analytics
 Actionable insights for
warehouse productivity,
fleet management, route
optimisation
Cloud Computing
 Pay-per-use models for
logistics companies
 Cloud-integrated
logistics
Non-Exhaustive

Very few Postal players can rival large global integrators and marketplaces
in terms of investment power
Source: Quarterly and annual reports; Bloomberg; Accenture Client Value Services
Parcel & Logistics Revenue Growth
[FY-12/2017 – FY-12/2020, USD bn, %, Size of Bubble represents Total Revenue]
0
85%
5
20%
68
25%
7 89
14 28
1 84
23 85
2 24
30%
4
35%
3 29
15
80%
6 83
71
70
69 87
66 88
13 67
27
26 91
65 90
86
-5%
25
0%
16
5%
15%
10%
Bpost
Austria
Post
SingPost
Poste
Italiane
PostNL
CTT
USPS
La
Poste
Post
Nord
Canada
Post
Posten
Norge
Revenue Growth (%) [FY 2017 - FY 2020]
Posti
Correos
Spain
China
Post
Australia
Post
Aramex
Amazon
Logistics
Revenue [FY 2020]
Alibaba
Logistics
SF
Holding
Yamato
ZTO
Express
UPS
Fedex DPDHL
Japan
Post
Royal
Mail
Swiss
Post
Integrator Post
Trend 9 – Postal players are losing the scale game

Posts have lagged integrators in the number of Mergers and Acquisitions
undertaken
Trend 10 – Postal players investing in M&A
Source: Annual reports, Bloomberg; Accenture Value Lab Analysis
2
16
9
8
18
21
17
21
13
19
11
2014
2011 2012 2012 2015 2016 2018
2017 2019 2020 2021
11
11
11
11
11
11
10
9
9
9
7
7
7
6
5
4
4
3
3
3
1
1
1
Canada Post
DPDHL
Poste Italiane
Yamato
Austria Post
Japan Post
PostNL
AN Post
Swiss Post
USPS 0
SF Holding
CTT
La Poste
UPS
NZ Post
ZTO Express
Bpost
Australian Post
Fedex
Posten Norge
Post Nord
SingPost
Aramex
Royal Mail
Posts Integrators
M&A: Number of M&A Deals, by Year
[FY 2011 – FY 2021]
M&A: Number of M&A Deals, by Company
[FY 2011 – FY 2021]
Peer Median M&A Deals
Posts 5
Integrators 9

Developing a postal strategy requires defending the core and pivoting to
the new …
Postal Growth Strategy
B
C
A
ENTERPRISE
VALUE
TRADITIONAL
BUSINESS
NEW
BUSINESS
S-CURVE OF TRANSFORMATION
TIME
TRADITIONAL POSTAL GROWTH STRATEGY

Retail Digital Services Others
… But selecting the right opportunities has become more complex
Verticalization & Diversification
Mail Parcel and Logistics
e-Citizen
Upstream Integration
Traditional Operational Value Chain
Collection Sortation Linehaul Delivery
Digital Identity
Printing
Services
Direct Marketing
Targeting
Mail Digitalisation
Digital Mail
New
Traditional
Digital Marketing
Informed
Delivery
Cross-channel Marketing
Omnichannel
Marketing
Expansion of Services
Freight
LTL FTL Brokerage
White Glove
Service
B2C Ecommerce Platform
Portal Marketplace Payments
FBA Type
Service
Time Definite Same Day On Demand
Local Delivery
Deep Induction Urban Delivery Store Pick Up
Expanded OOH Delivery
Parcel Locker PUDOs
Urban Logistics
Micro fulfillment
Public
Transportation
Delivery
Options
Proximity Services
Elderly Support Meal Delivery
Prescription
Drugs
Real Estate
Photography
eCommerce Logistics
Order
Management
Warehousing Fulfillment
Reverse
Logistics
Cross-Border
Freight
Forwarding
Customs
Clearance
Freight Air Line Haul
Oversized
Financial Services
Loans
Banking
Remittance
Insurance
Merchandise
Office Supplies
Packing
Supplies
Telco / Cards
Ancillary Services
Office Supplies
Bureau de
change
Travel
Citizen Services
Property Management
Industrial
Commercial
Utilities
Water
Gas
Electricity
Healthcare
E-Pharmacy
Telemedicine
New Services
Ticketing
Lottery
Addressing
Address
Validation
Address
Cleansing
Data Monetisation
Security
Prospecting
Consumer
Behavior
Identity
Management
Fraud Detection
OOH Management
Parcel Locker
Management
PUDO
Management
Non-Exhaustive
Elections
Vote by Mail
Others
IT Services
MVNO

Citizen Services
Growth of shareholder value requires a combination of new products and
services, new target segments and new geographies
Postal Growth Strategy – The basics
1
2
3
NEW PRODUCTS AND SERVICES
NEW MARKET SEGMENTS
NEW GEOGRAPHIES
Financial Services
National
3PL/ 4PL
Market Segments
Products
and
Services
1
2 3
Telco
Proximity Services
Pharma/Health C2C
Retail B2B
Same Day
Regional
Select countries Global

However here are some ideas for collective discussion ranging from the
Traditional to the NEW
Examples of Strategic Plays
Regional
Player
eCommerce
Integration
Local /
Urban
Services
Digital
Citizen Hub
Become the regional
postal and parcel
delivery player by
expanding
geographically and
focusing on cross-
border and regional
markets
Become the on-stop-
shop for eCommerce
delivery and also for
fulfilment and
payments to Retailer
and Consumers
Leverage the retail
network and digital
platforms to become
the on-stop-shop
between consumers
and business (utilities,
eCommerce and
government)
Leverage existing and
new delivery models to
offer better urban
delivery and new local
and home services
Who Why
• Alibaba becomes shareholder
• Growth in cross-border delivery
• Flagship airline with freight
capacity
• Favourable UPU transfer pricing
• Growth in eCommerce
• Growth in cross-border delivery
• Trusted brand with local merchants
• Strong retail network, fully owned
• 80% of revenue comes from
financial services
• Favourable government policies
• Dominant position in France
• Growth in urban and local delivery
• Need to leverage existing
workforce
Investments
• Acquisition of a number of freight
forwarding and logistics
• Investments in Singapore as a hub
• Acquisition of payment platform
• Investment in fulfilment centre
• Focus on domestic market and
local products to China
• Developing a digital platform
• Focus on retail experience and
added services
• Expansion into utilities and
government services
• Acquisition of companies including
start-up (ex.Stuart)
• Investments in mobile technology
• New delivery models
Shareholder Value
• Strong growth of cross-border
• Significantly impacted by COVID
• Challenges with the acquisitions
• Strong growth in eCommerce
• Struggling with fulfilment
• New competition from
marketplaces
• Moderate revenue growth
• High margins
• Limited potential beyond Italy
• Strong market position across
Europe
• Low margins in same-day
• High growth potential
What

Andre
Pharand
About Accenture
Accenture is a global professional services
company with leading capabilities in digital,
cloud and security. Combining unmatched
experience and specialised skills across more
than 40 industries, we offer Strategy and
Consulting, Interactive, Technology and
Operations services—all powered by the
world’s largest network of Advanced
Technology and Intelligent Operations centers.
Our 624,000 people deliver on the promise of
technology and human ingenuity every day,
serving clients in more than 120 countries. We
embrace the power of change to create value
and shared success for our clients, people,
shareholders, partners and communities. Visit
us at www.accenture.com.
andre.pharand@accenture.com
Managing Director – Consulting, Post and Parcel
LI / TW
André Pharand is the Managing Director for Accenture’s Post and Parcel Industry.
André has over 25 years of experience in the postal, express, logistics, retail,
ecommerce and fulfilment industries. He has worked with over 20 postal and parcel
players globally to develop new strategies, drive innovation, implement change and
manage costs. André leads our thought leadership and monitors trends and
disruptions impacting the industry.

Reinventing The Postal & Parcel Industry

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