CPC International Postal Update

Below is a snapshot of notable developments on international postal issues in the third quarter of 2019.

Systemic Reforms at the Universal Postal Union

Following a September 24-26 Extraordinary Congress, the Universal Postal Union (UPU) adopted sweeping reforms to its remuneration system. The Trump Administration had threatened to leave the UPU on October 17 if the U.S. Postal Service was not able to fully recover the cost of small packages from China and other countries. The U.S. will be able to charge the necessary higher rates beginning in July 2020. President Trump’s top trade adviser, Dr. Peter Navarro, led the U.S. delegation and discussed the importance of the new agreement at a press conference.

Strikes Threaten Postal Operations Around the Globe

Frustrated workers imperiled postal delivery in several countries. In the United Kingdom the Communication Workers Union, representing Royal Mail employees, distributed strike ballots to postal workers nationwide in September, according to the Financial Times. Among the union’s concerns are: 1) that the recently-privatized Royal Mail may split into disparate companies and 2) that any new system may abandon the universal service obligation. The union will announce the results of the strike ballot on October 15.

In Finland, a postal strike disrupted delivery service as workers protested pay cuts with a multi-day walkout. The postal workers’ union alleges that Posti, Finland’s postal service, is denying proper payment to hundreds of its employees under current agreements.

Postal workers in Brazil also announced an indefinite strike against Brazilian President Jair Bolsonaro’s potential cuts to Correios, the Brazilian postal service. Following an announcement in July, the Brazilian government will also move forward with plans to privatize Correios.

The Sri Lanka Postal Services Union also went on strike for 48 hours over disagreements with the government’s handling of issues facing the Postal Services Ministry’s employees. After a breakdown in negotiations between the government and union, postal employees proceeded with the temporary strike.

Dutch Delivery Services Merger Stopped, Then Allowed

The Netherlands’ Authority for Consumers and Markets originally blocked delivery company PostNL’s acquisition of “its main rival” Sandd, before the Dutch government relented and allowed the merger to go through, according to Reuters. The Authority for Consumers and Markets originally argued that the merger would create a monopoly in the delivery sector in the Netherlands, with the combination threatening to raise postal prices up to 40 percent. The Dutch government vetoed that decision, saying that “the merger would save costs and ensure delivery in rural areas,” Reuters reported.

China Offers Customers Personal Postal Code

To adapt to the coming automation of delivery services, China is developing a system of “Personal Address IDs” that will correspond to each person’s address, an August report in Abacus says. The codes would not replace traditional mail, the State Post Bureau said, but the codes would cut costs and make it easier for machines to deliver the correct package to the correct address.

Decline in Stamp Purchases in India Brought by Electronic Communication

A story in LiveMint outlines the challenges facing India’s postal service as more residents of that country gain access to electronic communications. Long depending on revenue from traditional mail, India Post has seen its stamp revenue drop by more than 20 percent, the report explained: “In FY 2017-18, the revenue earned from the sale of stamps was ₹366.69 crore, while in FY 2016-17, the DoP had earned ₹470.90 crore from this.”

Japan Moves Closer to Eliminating Saturday & Next-Day Deliveries

Nikkei Asian Review reported in early August that Japan Post would “likely stop delivering mail on Saturdays and eliminate next-day service as early as next year.” At present, the law requires that mail be delivered every week day, plus Saturday, and mail must be delivered within three days of post office receipt.

EU Awards Poste Italiane €170 Million in Compensation

The European Union approved a measure to grant Italy’s postal service over €170 million to deliver newspapers and non-profit publications within Europe. According to Post & Parcel, the deal “aims at preserving and fostering media plurality and diversity of views by charging reduced rates to publishers and newspapers for the distribution of certain categories of press.”

Pos Malaysia Losses Stretch Over Second Quarter

For three straight months, Pos Malaysia, Malaysia’s delivery service, suffered losses due to decreasing revenue and increasing operating costs. Compared with last year’s second quarter profit of RM4.98 million, The Sun Daily reported, Malaysia’s profit fell RM20million to a loss of RM15.1million. “Looking ahead, Pos Malaysia expects its business outlook [to remain] challenging, given the continued contraction in mail volume as people turn to electronic means, while the courier business continues to operate in a competitive environment with price and cost pressures despite the revenue growth from the segment,” The Sun Daily added.


About the Author: John Cicchitti is a Research Fellow with the Consumer Postal Council.

John Cicchitti