18.3 million parcels and 131.41 million letters were handled by Luxembourg’s 34 postal service providers in 2023, according to the grand duchy’s utility regulator, the ILR. Photo: Shutterstock

18.3 million parcels and 131.41 million letters were handled by Luxembourg’s 34 postal service providers in 2023, according to the grand duchy’s utility regulator, the ILR. Photo: Shutterstock

The postal services market saw its turnover increase by 8% in 2023 compared with the previous year, marked by continued growth in parcel services. This is despite a fall in the volume of mail. But higher prices for mail services are restoring the balance.

The Luxembourg Regulatory Institute (ILR) has just published its report on postal services in 2023. The market is made up of two segments: mail services and postal services. It employs 2,000 people and is largely based on subcontracting. 34 service providers are active in this market, with sales of €209.69 million in 2023. Although the volume of mail to be delivered is on a downward trend, it is this activity that has made the biggest contribution to sales growth.

In fact, mail delivery services saw a 6% fall in the volume processed (131.41m units). However, the segment posted a 10% increase in turnover, to €115m. This is largely due to the price increase introduced at the start of the 2022 school year. Average revenue per item of mail has been rising for two years, from €0.73 in 2021 to €0.88 in 2023. On average, a resident receives 14 to 15 letters per month.

The report also stated that "national traffic, which accounts for 78.1% of total traffic, is down by 1.0% compared with 2022. Mail traffic shows a continuous decline with a compound annual rate of -5.5% over the period 2020/2023. The designated universal service provider, Post Luxembourg, handles 97.5% of total mail traffic."

2 parcels per habitant per month, on average

Following the same trend as e-commerce, the parcel services business is logically on the rise, even if its turnover remained lower than that of mail, at €94.41m, representing positive growth of 5.6%. The volume handled rose by 10.9% to 18.36m units. The report pointed out that "the share of turnover generated by parcel services will fall by 1 percentage point to 45% of the postal sector's total in 2023". In this respect, Luxembourg stands out from its neighbours, where, according to the ILR, parcel services account for at least 50% of the sector as a whole. According to the ILR, this steady growth over the past few years can also be explained by the growth in incoming cross-border parcel traffic (+12.2% in 2023). But the average revenue per item of mail has fallen in 2023 (€11.46 compared with €12.63 in 2022). The average inhabitant receives two parcels per month.

Post remains the market leader, with 63% of jobs in the sector and 99 outlets across the country. In response to the continuing growth in parcel traffic, it has expanded its automatic distribution points (141 by 2023). It shares the market with 33 other service providers, including a new one in 2023. Of these, 53% provide parcel services, 15% mail services and 32% both parcel and mail services. The ILR also states that "five service providers registered with the institute and active on the national postal market are domiciled in a neighbouring country (Germany, Belgium, France) and do not employ staff based in Luxembourg".

Read the French language version of this report

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