EUROPE
Europe’s postal industry is facing at a crossroads, as industry players struggle to keep up with parcel demand and the challenges of digitalization. The ecommerce boom has changed the game from simple letter delivery to fine-tuned parcel logistics.
Times are hard for postal services in Europe: PostNL, the largest Dutch postal service, called for government intervention after shares fell dramatically last year; Germany’s Deutsche Post, said in March that it would cut 8,000 jobs; and Denmark’s PostNord will likely stop delivering letters altogether to focus solely on parcels.
The imperative now for postal services is to reinvent the way their businesses work, leveraging new technologies to translate data into real solutions. A new whitepaper from supply chain consultancy TMX shows how innovative postal services can embrace automation and digitalization, though there is no one-size-fits-all solution.
Many postal services face operational bottlenecks like problems with sorting, outdated infrastructure, and labor pressures. In addition to that, many facilities were just not made for the explosion of ecommerce, which turned infrastructure designed for processing letters into high-volume package sorting facilities.
Last-mile optimization
Skyrocketing costs, dense urban cityscapes, and high expectations for consumers have now made last-mile delivery a major weak point. Traditional delivery models with fixed routes will need to give way to new, highly-optimized models.
Many consumers now demand – and expect – very quick delivery times for online purchases. While these expectations are not always realistic, the pressure is on for local postal services to deliver at light speed.
Last-mile delivery is facing increasing challenges as congestion, environmental concerns, and safety regulations restrict truck and vehicle access to urban areas
“Cities such as London have introduced congestion charges, further complicating the equation. At the same time, parcel volume is expected to double over the next five to seven years, particularly in countries with lower e-commerce penetration – adding even more pressure to an already strained last-mile network.”
One new model that could work to fix last-mile delivery is ‘interleaving’, which is when one truck handles both pickups and deliveries. This agile approach is notoriously tricky to pull off – no postal company has mastered it so far – but it could be unlocked if new tech innovation and infrastructure can be leveraged to make it happen.
Trying out new concepts
Some European postal services have turned to other experimental trials in hopes of finding fine-tuned solutions to common delivery logistics problem.
For example, Poland’s InPost has extensively tested automated parcel machines as a solution to the common problem of recipients not being home at delivery time. The UK’s Royal Mail also added thousands of parcel lockers to their operations, some of which come equipped with solar-powered barcode scanners that enable sending parcels off.
Privatized postal services
Many national European postal services that were previously state-owned became privatized over the last few decades. Deutsche Post was privatized in 2000, the UK government sold its last shares of Royal Mail in 2015, and Portugal’s CTT became a public limited company in 1991. There are still some hold-outs with state-owned services, like Spain, France, and Norway.
These companies are dealing with the huge shift of going from what were decades ago essentially government agencies that deliver letters, to fully-fledged parcel processing logistics centers flooded with merchandise from the booming ecommerce sector.
As the most visible part of the supply chain, postal providers are often the easiest to blame, but they can’t afford to be the scapegoat.
“To stay trusted, they must deeply understand their role and integrate more broadly across the value chain. It’s not just about delivery; it’s about becoming a true strategic partner, bringing transparency to hidden costs, working with retailers to reshape offerings around certainty, and ensuring delivery options that meet customer needs.”
This article was originally published Consultancy.eu on 29 August 2025.