Posted on 10/01/2007 11:05:46 PM PDT by bruinbirdman
Postal companies should be free to compete for customers across the European Union from 2011 as governments on Monday ended a year-long deadlock over opening the €88bn ($125bn, £61bn) market.
Only Luxembourg opposed the decision, after concerns from France and Italy were addressed. The grand duchy and 10 other countries in the 27-member bloc won the right to delay domestic liberalisation for two years.
The move will, in theory, allow any operator to carry letters under the 50g “reserved” threshold, although powerful incumbents are still favourites to retain the business. The rest of the market has been open for some time, but only Sweden, Finland and the UK have fully liberalised, although Germany and the Netherlands will soon follow suit.
Charlie McCreevy, internal market commissioner, had pressed for a 2009 date but welcomed the deal. “It is a sector with huge potential provided it reinvents itself. The agreement does this by rewarding innovation and efficiency.”
The Irishman said many people had doubted reform could be achieved because of strong opposition from unions and countries that feared the erosion of single price guarantees from remote villages to city centres.
A compromise drawn up by Portugal, holding the EU presidency, preserves the so-called universal service provision, leaving states free to decide how to define and fund it within guidelines. Hervé Novelli, French secretary of state for trade and enterprise, said bidders to distribute business and express mail in France could not just “skim off the cream”. They would have to contribute to a fund to pay for six-day service at a standard rate for the whole country.
La Poste, which has 17,000 branches in France, had no comment.
Striking a different tone to Nicolas Sarkozy, the president, who has railed against competition as an ideal, Mr Novelli said liberalisation would improve service and lower prices. “I do not know of any sector where competition does not have a beneficial effect on prices and quality.”
For letters up to 50g, states can set minimum requirements for delivery times, uniform prices and access to post offices. Crucial to competition will be how national regulators exercise their role.
The deal marks the end of a 20-year quest by the European Commission to open the market, which accounts for 1 per cent of gross domestic product. The 1997 postal directive set quality standards and allowed some market opening. The latest law hoped to have the market open by 2009 but is still a big step further.
But tiny Luxembourg and Malta see little chance for their national post offices to survive. Greece and some recent EU members – Poland, Latvia, Lithuania, Hungary, the Czech Republic, Slovakia, Romania and Cyprus – have to slim down to prepare for competition.
However, unions are expected to oppose the plans. The postal industry employs more than 1m people in the EU.
Philip Bowyer, of the Uni Global Union, said that once the cross-subsidisation by near-monopolies ended, pressure would grow to charge people in remote areas more for their mail.
“No service provider wants to deliver to the tip of Scotland. We have pointed this out from the start. The post industry is complicated. The people drawing up plans in Brussels believe the market will fix it, but it won’t.”
Postmen in Portugal were already planning protest marches, he said.
that is true but most of your mail doesn’t come from fedex.
Agreed, but the reason that FedEx does is because of competition.
The USPS used to bundle up mail intended for remote locations in the US and send it all in one big chunk once or twice a week. Now, because there is competition from other companies, they make the run every day.
Perhaps, you amy want to go into the business of toting an envelope from San Diego to Portland, Maine for $0.41.
You do know that Express Mail isn’t actually carried by USPS planes any more, right?
I never really thought about it. But that does make sense.
It’s sublet to FedEx - which is why there is now a FedEx drop box in just about every post office.
Express Mail gets handed off to FedEx for transport from post office to post office. It’s cheaper and faster for the Post Office to let FedEx handle it. They wouldn’t do that if they hadn’t had FedEx and UPS around to compete or negotiate with. Otherwise, an Express Mail letter would cost $50 to send and get there in three days instead of overnight.
I’m not saying that the USPS does a bad job these days - but competition from private carriers in various sectors has ensured that USPS service is good.
Did you read the article? La Poste, the French postal service, takes SIX DAYS to get a letter from one side of France to the other. France is about the size of Texas. Here in Texas, the USPS can get a first-class letter from Texarkana to El Paso, a greater distance than inside France, in two days max. Sometimes they get it there in less than 24 hours. Why? Because the USPS has competition. La Poste doesn’t, and this is what this EU law is trying to fix.
Six days to get a letter under 500 miles was acceptable in horse and buggy days. It is totally unacceptable today.
competition will always lower prices but it would be interesting to see what would happen if there was no usps and no ‘universal service’ provision. I can make at least one prediction: we’d get mail on Sunday
Europe pinglist ping.
I think they mean 6 days a week of service, not 6 days to deliver an envelope. But that sentence made me scratch my head too.
I agree competition has made the US postal service better. But that’s at the higher end of the market e.g. packages and express mail. I’m not sure if there is room for competition at the low end of the market.
It always boggled my mind that the Post Office delivers to and picks up from every address in America 6 days a week. There really should be no reason for Fed Ex or UPS. The Post Office infrastructure is incredible.
Sadly, I use the USPS quite often and there is definitely a thief at my local branch. As part of my business I send out about 5-6 packages a day from the post office, and each week I get about 3 complaints about the boxes arriving slit open and with the merchandise missing from it. That never happens with UPS which I use far more often. I am sure it is my local branch since I send these all over the country. I still do it because the price is the best and the item is of low cost. But it’s an annoyance/problem and very hard to find someone like a manager who will take responsibility to try to correct it.
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