Estimated origins of letter mail services date presumably to the invention of writing. Until the emergence of the telegraph in 1850, for many centuries letter mail was the only way of communication to a distant place. Through postal services, people from distant places could attain current information on personal, political, economic, and many other issues. Thus, letter mail services shaped the way humans interacted by allowing people to talk from distant places as the hallmark of interpersonal communication. This had an indirect impact on strengthening the economic coordination of many economies worldwide. In 2020, industrialized countries held the highest share of letter post traffic worldwide. Only a very small portion of total letter traffic globally occurred in non-industrialized countries. This wide difference could be explained mainly by the advanced postal systems of developed countries, which contributed to better economic coordination over the years. Germany, for instance, is the leading country in the European Union for domestic letter mail traffic, amounting to 12.9 billion pieces in 2020.
Challenges of postal services in Europe
Mail services offer some advantages such as official letters, postal voting, and many other services that would be close to impossible to implement online. Nonetheless, people prefer comfortable means of communication, and letter mail is not the most convenient in the 21st century. The letter services deliver information to the receiver at a very low speed and sometimes mail letters get lost in the process. Besides, the advancements made in electronic mailing immensely reduce the demand for letter mail. Therefore, the turnover generated from the provision of letter mail services in Europe declined to about 26.8 billion euros in 2020. However, the annual volume of parcels delivered within Europe had been increasing to more than 8.2 billion units in 2020, where the revenue jumped to 53.1 billion euros that year. Such growth was primarily due to a surge in demand for parcel and courier services due to increased online shopping activities, particularly during the Covid-19 pandemic lockdown. Correspondingly, the number of postal offices and agencies in Europe also saw a slight increase during the year, to 138,439.
Postal service providers in Europe
Across Europe, each country has one dominant company providing postal services as an oligopoly or in many instances monopoly. For instance, in 32 European countries, there were roughly 27 enterprises providing postal services under direct or indirect designation in 2020. Holding a strong market position in postal services somewhat reduces the involvement of enterprises in developing innovative approaches to market challenges. This creates somewhat disincentive for dominant firms in the market and reduces social welfare in the long run. In addition to that, the demand for traditional letter mail services declines continuously in all countries even if international connectivity increases. Yet, these companies still facilitate a huge economic and social activity. Some of the most known national postal service firms in Europe are Deutsche Post, La Poste, Royal Mail, and PostNL.
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