Wednesday, November 9, 2011

Liberalized. Corporatized. Privatized. Confusing.

Tags: postal liberalization, postal liberalisation, postal operators, postal service, Extraterritorial Offices of Exchange (ETOE), Univeral Postal Union (UPU)

What is postal liberalization?  Where did it come from?  And, most importantly, is it good or bad? 

"Postal liberalization" is the generic term used to refer to the more open markets created by law in some countries.  It became required in the European Union with the publication of the Third Postal Directive in the EU's Official Journal on February 27, 2008.  Other liberalized markets include Singapore, New Zealand and Argentina.  Broadly speaking, liberalizing governments have been reducing their ownership stakes and management control of postal operators while allowing competition among postal operators.
Depending on the country, it can mean different things.  Since the European Union has mandated this, let's use the EU countries as an example.  Earlier this year, the options there include Government Department (Cyprus), State Enterprise (Czech Republic, France, Greece, Luxembourg, Poland, Spain), Corporatized (Estonia, Finland, Hungary, Ireland, Italy, Latvia, Lithuania, Portugal, Slovakia, Slovenia, Sweden, the United Kingdom), and Privatized (Austria, Belgium, Denmark, Germany, Malta, The Netherlands). 

 It can get confusing – and complicated.  For example, Denmark sold 22% of its operator to CVC Capital Partners, a British investment group, while Post Denmark and CVC purchased 50% (less one share) of the Belgian public postal operator. 

All of this is in addition to the ETOEs – Extraterritorial Offices of Exchange – that are now a phenomenon in most countries where they are allowed by law.  In effect, an ETOE is an office operated by a postal operator outside its national territory in another country to attract business in the country or countries where the ETOEs are located.  An office of the Royal Mail or Swiss Post in the United States or in Japan, for example, would be and ETOE.  ETOEs have been around for some time but in this increasingly competitive – and sometimes protectionist – environment, they are under increasing scrutiny.

Designated postal operators are those postal operators that the government authorizes to provide postal services in their territory.  This comes with some obligations imposed both by the local government and by international treaties, particularly those of the Universal Postal Union (UPU) regarding the handling of international mail.  And there are usually advantages, too, such as the exclusive rights to deliver first-class letters and to deliver to post office boxes. 

Is it good or bad?  That is not clear – yet.  I suspect that that will be complicated, too.  Good for some customers but not others and good for some postal operators but not others.



  

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