CPC International Postal Update

Below is a recap on several significant recent developments on international mail and postal delivery. Over the first quarter of 2019, the United States and the Universal Postal Union have continued deliberations, Royal Mail has been dealing with the fallout of ongoing Brexit negotiations, and Chinese postal stocks jumped to start the year after a disappointing 2018.

Universal Postal Union Discussions Continuing

The State Department announced support for a plan that would keep the United States in the Universal Postal Union (UPU), while allowing the U.S. government to set its own international postal rates. Per Bloomberg Government’s Cheryl Bolen, the plan consists of an amendment to the UPU remuneration agreement that would permit “the U.S. to self-declare rates for inbound delivery of small packets and bulky letters.”

Many steps remain in this process. The UPU has a one country, one vote process for evaluating such changes. Currently, at least 30 countries support the U.S. position.

Royal Mail Group Faces Brexit, Financial Uncertainty

As the national debate over Brexit continues to rock the United Kingdom, Royal Mail said in a January statement that while domestic operations would go unimpacted by any break with the European Union, the future of its international deliveries remains “unclear.” A key excerpt from the statement, republished by tamebay.com, said, “The shape of the future relationship between the UK and the EU continues to be unclear. It is therefore not appropriate, at this stage, to set out with any degree of accuracy the impact of various Brexit eventualities on the Group. As previously outlined, the main issues for the Group are expected to relate to any potential economic downturn and changes associated with customs and VAT processing.”

Meanwhile, Royal Mail shares fell sharply in January due to lower-than-expected mail volume, a development Royal Mail CEO Rico Back blames partially on Brexit. The Week reported that Back believes the possibility of a no-deal Brexit is “the main reason for companies holding back spending.”

Russian Post Becomes Beer Distributor

To raise funds, Russian Post began selling alcohol at a few dozen offices, the BBC reported in January. Russian social media users first noticed the practice in the Northwest Oblast of Murmansk, which Russian Post confirmed.

According to the BBC, Russian Post is planning to expand the sale of alcoholic beverages to over 3,000 post offices. However, Moscow, Russia’s political, economic, and cultural center, will not see post office-liquor store combinations, said Russian Post Press Secretary Daniil Skidan.

Chinese Postal Stocks Rise to Start 2019

The trade value of shares of five of China’s six biggest postal companies rose to start 2019, after a disappointing 2018. According to The Wall Street Journal’s Shen Hong, the delivery companies’ falling stock prices were buoyed in January 2019 by an increase in parcel volume, while China’s growing e-commerce industry has also aided the companies in their stock bounce back. The only major delivery company that did not see its stocks rebound in January was S.F. Holding Co., the country’s largest by market value, Hong reported.

STO Express, one of China’s largest parcel services, saw another jump in its stock price in early March, when Alibaba Group, a multinational conglomerate, announced that it would purchase a 49 percent stake in the company. The price of STO shares rose by 10 percent in a day, according to the South China Morning Post.

Ireland Helps the Homeless

An Post, the state postal service of the Republic of Ireland, announced in March that it would begin providing permanent addresses to homeless people throughout the country. As addresses are often a necessity for job applications and other financial requirements, the move could help thousands of homeless step up and out of poverty. The change was announced as part of a recent rebranding effort at An Post, according to the Independent.

John Cicchitti