BCG: Projecting US Mail Volumes to 2020

Check out a real BCG presentation on projecting US Mail Volumes to 2020.

BCG Presentation: Projecting US Mail Volumes to 2020

Key Learnings from the Presentation

The BCG report on “Projecting US Mail Volumes to 2020” provides a detailed analysis of the future of mail volumes in the United States, taking into account the impact of digitalization, consumer behavior, and economic factors. Here’s a concise summary capturing the key findings, insights, and recommendations:

Overview and Approach

• Objective: Develop base case projections of mail volumes up to 2020 under a business-as-usual scenario, incorporating no new revenue or cost-saving initiatives, legislative or regulatory changes, assuming a return to historical economic growth rates within two to three years, and without major disruptions.
• Methodology: Segmented mail into components with common behaviors, conducted interviews and surveys with senders and consumers, leveraged a broad set of industry data, and used global benchmarks to project revenues.

Key Findings

• Volume Decline: Mail volume is expected to decrease from 177 billion pieces in 2009 to approximately 150 billion pieces by 2020, a compound annual growth rate (CAGR) of -1.5%.
• First-Class Mail: A significant decline in First-Class Mail is anticipated, falling from 84 billion pieces in 2009 to 50 billion pieces by 2020, marking a -4% CAGR.
• Standard Mail: Expected to remain roughly flat at 85 billion pieces, with a slight increase projected (+0.4% CAGR).
• Packages: A bright spot, with a projected gain of 1 billion pieces (+3% CAGR) by 2020, though not enough to offset losses in core business.

Consumer and Sender Perspectives

• Both consumers and senders anticipate a sharp decline in the use of mail for bills, invoices, statements, and advertisements due to the increasing adoption of online alternatives.
• Consumer Survey Insights: Indicate a preference shift towards online transactions and services, expected to result in a significant decrease in mailed bills, statements, and payments.
• Sender Insights: Reflect similar trends, with expectations of moving towards digital communications to reduce costs and improve efficiency.

Global Benchmarks

• The decline in mail volumes in the US is consistent with trends observed in other countries with high broadband penetration, reinforcing the impact of digitalization on mail services.

Implications and Recommendations

• Revenue Decline: Real revenue per delivery point is expected to fall nearly 50% from 2000 to 2020, indicating a substantial impact on USPS’s financial sustainability.
• Structural Changes Needed: To address declining volumes and revenues, significant structural changes are recommended, including pricing enhancements, diversification, efficiency improvements, network consolidation, and changes to the delivery model and labor model.
• Comparative Actions: Other postal services globally are already implementing structural changes, such as reducing delivery days and integrating retail access into other retailers.

About Boston Consulting Group (BCG)

BCG is a global management consulting firm with a wide range of services in strategy, operations, corporate finance, and sustainability, among others. It is well-known for its innovative approach to solving business and societal challenges. BCG places a strong emphasis on thought leadership and has made significant contributions to business strategy concepts. The company is committed to delivering solutions that combine human insight, technology, and strategic vision to drive competitive advantage and growth for its clients.

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