Postal operators worldwide are struggling to turn parcel volume growth into sustainable profits, as rising costs and intense competition erode margins, according to preliminary 2025 results from the International Post Corp (IPC) and first-half 2026 financial reports from national operators.
Revenue Growth Driven Entirely by Parcels
Postal operators saw average revenue rise by just 1.4% in 2025, with growth coming almost exclusively from parcel deliveries, the IPC reported on Thursday. Letter mail continued to decline in all markets worldwide. However, despite higher parcel traffic, margins in this category remain narrow or negative, the IPC said. "E-commerce continues to drive demand, but volume growth no longer guarantees profit, given the high competition and low margins," said Holger Winklbauer, IPC Chief Executive Officer, in a news release.
Financial Squeeze Continues in 2026
The pressure has persisted into 2026, as shown by Posten Bring, the state-owned postal logistics provider in Norway. On Wednesday, Posten Bring reported that revenue in the first half of 2026 increased 0.9% compared to the same period last year, while adjusted operating profit fell 19.1% to $40.3 million. The company noted that making a profit is proving difficult because of rising costs and price pressure from intense competition, even as parcel volumes continue to grow. Mail volume decreased 9.4% in the first six months, resulting in a 2% decline in mail revenue.
| Metric | Posten Bring H1 2026 Change |
|---|---|
| Revenue | +0.9% YoY |
| Adjusted operating profit | -19.1% to $40.3 million |
| Mail volume | -9.4% |
| Mail revenue | -2% |
Parcel growth is strongest in Sweden, Posten Bring said. It plans to open a new parcel terminal outside Stockholm next summer that will triple its current capacity in the country.
Regulatory & Cost Pressures Mount
The IPC warned that the introduction of additional regulatory and customs obligations in the United States and Europe over the past 12 months may lead to a slowdown of cross-border e-commerce and a reduction of overall volumes. It urged governments to ensure new rules are easily implemented to maintain parcel flows and help postal operators retain business.
Digitalisation continues to reduce mail demand, pushing postal operators to diversify into government, financial and logistics services to offset lost mail revenue. At the same time, rising labor and fuel costs are accelerating investment in automation and network optimization.
U.S. Postal Service mail volume has dropped by more than half since its peak in 2000, while the number of addresses requiring service grows by 1 million annually and the workforce is about the same size as in the 1970s. The agency says it could run out of cash in five years if Congress does not make structural changes. Postmaster General David Steiner is raising postage and parcel rates, soliciting large shippers to use the Postal Service for last-mile delivery of bulk e-commerce shipments, and streamlining the delivery network to improve efficiency and service.
Regulatory changes, particularly for emissions and electric vehicles, are also requiring operators to modernize fleets and infrastructure. Some regulators are easing long-standing mail-delivery requirements and adjusting service standards to help operators sustain a profitable universal service, for example by reducing delivery days or converting door-to-door addresses to community mailboxes. Canada Post, for instance, is in the process of ending front-door delivery to millions of homes and switching residents to community mailboxes.
Implications for Shippers and Operators
For logistics managers and freight forwarders, the financial strain on postal operators means that last-mile delivery costs are likely to remain high and service levels could become inconsistent as operators rationalize networks. Shippers relying on postal networks for cross-border e-commerce should closely monitor regulatory developments in the US and EU that may slow parcel flows. Diversification into alternative last-mile providers and investment in automation may be necessary to mitigate risks.
Watch List
- USPS structural reform: Congressional action that could change pricing and service standards.
- EU/US customs rule implementation: Timelines and practical impacts on cross-border parcel volumes.
- Posten Bring's new Stockholm terminal: Capacity tripling expected by summer 2027.
- Canada Post's mailbox conversion: Pace of transition and its effect on delivery times.
- Automation investments: Impact on labor costs and service reliability across operators.
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