International Postal Update — July 2009June 24, 2009
UNREST AT ROYAL MAIL
Facing union pressure, election setbacks, and a revolt by backbenchers in his own party, Gordon Brown’s Labor government has abandoned plans to sell off a 30 percent — originally a 49 percent — share of Royal Mail to a private bidder. Royal Mail is close to a cash-flow collapse over its pension liabilities, but opponents claimed the sale price would be too low and that the last likely private buyer, Dutch TNT, was itself unstable and would loot Britain’s “national treasure.” The government had planned to sell off Royal Mail assets, take the windfall to pay general government bills, and flip the pension debt into a pay-as-you-go obligation of British taxpayers.
Postal workers in London and Scotland launched a 24-hour strike on June 19 to protest rumored job cuts. Royal Mail has begun a pronounced effort to modernize in light of the organization’s competitive difficulties. Some senior postal workers called the strike a “shambles,” as many Royal Mail delivery vans crossed picket lines because the union’s strike ballots were incomplete.
SWISS POST MUSCLES INTO SCANDINAVIA
Swiss Post International (SPI) will acquire Danish letter post processor SPI Denmark SpS and merge it with SPI Sweden to form Swiss Post International Scandinavia. SPI is one of Swedish national carrier Posten’s chief competitors; it holds a 4 percent share of the Swedish postal market. Swiss Post maintains aggressive plans for international growth, even as it generates 20 percent of its sales beyond the borders of Switzerland.
CHINA FIRST TO GO PROTECTIONIST?
In what some fear could be a precursor to protectionism in many countries, China passed a law on April 24 that would prohibit foreign firms from express mail within China. This move is calculated to keep private delivery companies out of China’s lucrative $6-billion-per-year express-mail market. Foreign firms will be allowed to deliver packages and international letters. Chinese spokesmen claimed the law was not in violation of China’s commitments to the World Trade Organization, but the EU is poised to open an investigation.
FRANCE SUBSIDIZES LA POSTE
The French government will invest €2.7 billion into La Poste, purportedly to prepare the agency for the liberalization of the postal market in 2011. As part of the plan, the French national post will become a limited company, but only public-sector investors will be permitted to buy shares. While €1.5 billion of the investment will come from state-owned bank Caisse des Depots, €1.2 billion will come directly from the state.
KOREA POST TO EXIT FINANCIAL SERVICES?
The Industrial Bank of Korea, whose majority shareholder is the South Korean government, has announced plans to purchase Korea Post’s financial services arm. Korea Post’s financial products include deposit accounts and insurance.
INDIA POST LAUNCHES TRAVEL SERVICE
ARM I Solutions formed a partnership with India Post to launch the travel assistance service “Genie Ease-Ticket.” Customers will be able to buy airline, rail, and bus tickets at 177 post offices in the Kerala Postal Circle. They’ll also be able to make hotel reservations. The chairman of ARM I hopes to roll out the service in 8,000 post offices across India in the next 24 months.
BRAZIL’S CORREIOS STRUGGLES
About 200,000 Brazilians in the northeastern state of Paraíba have reported extremely poor service from Brazilian national post Correios. This development comes on the heels of a pronounced effort by TNT to gain a foothold in South America’s largest country; the Netherlands-based mail and express delivery titan recently completed the acquisition of both LIT Cargo and Expresso Araçatuba and launched a new integrated road network linking Argentina, Brazil and Chile. The network offers tracking capabilities, with GPS systems on all vehicles, as well as expedited customs clearance and day-specific delivery.