On behalf of the USPS OIG, WIK-Consult has developed a parametric forecast model to identify development paths for U.S. letter volumes. The model uses economic growth and digitisation as drivers to design six scenarios for future volume development. The severity of the decline in letter volumes, both overall and in the respective segments, will have an impact on the financial sustainability of postal services in the future.
In a first step, WIK-Consult examined possible drivers for letter volumes in different segments and identified past trends. In a second step, these findings were used to derive assumptions for future developments in the letter segments. In a baseline scenario, it is assumed that past trends will continue: the economy will grow as in the past, while at the same time there will be no disruptive changes in digitalisation. The other scenarios assume possible combinations of steady or stronger digitalisation and varying degrees of economic growth.
In the best-case scenario, letter volumes are expected to decline by more than 13% by 2035. In the worst-case scenario, the decline would exceed 40%. The simulation model makes it possible to differentiate between development paths for each letter segment considered in the respective scenarios and to draw conclusions about the development of costs and the financial development of the US Postal Service.
