International Postal Update – Europe Competition Delayed

EUROPE COMPETITION DELAYED

BRUSSELS DEADLINE MAY SLIP TWO YEARS

Full European postal deregulation may now come later than many had hoped. In June, the European Parliament’s Transport and Tourism Committee backed a plan calling for national postal monopolies to expire by December 31, 2010, rather than by the end of 2008. Some new member states and countries with remote regions may be allowed an additional two-year transitional period. Until full deregulation across the trade block, those countries still protecting a sector of their postal market, such as France and Spain, will not be allowed access to postal markets in countries that have already ended their postal monopolies, such as Britain and Estonia. Philippe Bodson, president of the Free and Fair Post Initiative which represents postal users and businesses, commented that “the postponement of the date foreseen by the European Commission comes as a bitter pill for postal users, who are firmly convinced that 2009 is the right time for full market opening across Europe.”

GLOBAL POSTAL LABOR UNREST

Spurred by deregulation, several postal worker unions around the world are resorting to strikes or labor action. Employees of Britain’s Royal Mail, represented by the 127,000-member strong Communication Workers Union, are planning a series of national one-day work stoppages. The CWU has rejected Royal Mail’s offer of a 2.5 percent pay rise and claims that modernizations will lead to 40,000 job losses. Royal Mail points out that it has lost 40 percent of the market for business mail in the past year. An executive at DX, a competing mail operator, told Britain’s Observer newspaper that it was gaining new business as some Royal Mail customers, worried about striking, defected. Britain’s mail market was opened to competition at the beginning of 2006.

The union representing workers at the Israel Postal Company began a work slowdown in late June and threatened a full strike. The slowdown measures included shorter hours and a refusal to handle certain transactions. The workers complain that the government is failing to prevent thousands of dismissals, which could be triggered as a result of the national market for bulk mail opening to competition on July 1st.

Several hundred employees of Correos, Spain’s monopoly carrier, protested in the streets of Madrid on June 10th, demanding 300 more euros a month. The 65,000 workers represented by the country’s postal union now make an average of 900 euros a month.

JAPAN POST TO BE PRIVATIZED IN FALL

Japan Post will be dissolved in October 2007, in line with postal privatization legislation passed in 2005. It will be split into four subsidiaries held by a government-owned shell company, which is obliged to sell all stock in two of the four subsidiaries within 10 years. The government is obliged to sell two thirds of its stock in the shell company within the shortest possible time.

Japan Post’s two major unions, decades-old rivals, have agreed to join forces as the company privatizes. The move will take place in October, several weeks after Japan Post is officially dissolved into four subsidiaries. The new alliance will have 220,000 members, making it the biggest private-sector labor union in the country. The two unions, the Japan Postal Workers’ Union and the All Japan Postal Labor Union, worked together to oppose the government’s push for privatization.