Historically, UK investors have had few options to benefit from the steady, utility-like earnings stream on offer from the mail and parcel delivery sector. But that is all set to change later this year as one of the last bastions of the public sector, the Royal Mail, rumbles towards a landmark privatisation. And it is not only the Royal Mail's potential listing that should make investors pause and take a second look. The internet has created strong, long-term structural growth forces for parcel businesses as shopping migrates online. We've taken a closer look at a range of investment opportunities from across the globe in the mail and couriers sub-sector.
Return to sender
The story of Royal Mail and its recent turnaround has improved the outlook for the mail and parcel delivery sector as a whole. For years the Royal Mail struggled under the weight of revenue controls and legacy costs. When mail volumes started to decline with the advent of email and e-documents, the Royal Mail was hit hard due to high fixed costs and a commitment to maintain the service. Unlike many private sector operators who were quick to wield the axe, the well-organised communication workers union (CWU) ensured the job security of its members. As a result, Royal Mail has suffered yawning losses over the past five years.