European Vote on Postal Services Members of the European Parliament voted to do away with state monopolies in postal services on Wednesday, heralding the final phase of EU postal liberalisation. As expected, MEPs want the Commission's deadline delayed by two years, allowing competition for letters weighing less than 50 grams from 1 January, 2011. Postal workers in some Member States are unhappy with the plans and have staged stoppages and rallies against them. The Commission predicts few changes for consumers, however. It points to the perceived success of Britain, Finland, the Netherlands and Sweden, which have already opened their postal markets to competition. Canada Post's Obsolete Monopolies National Post Published: Monday, January 07, 2008 A loss in Ontario superior court by Canada Post over the way it charges corporate clients for parcels they mail points out once again why the Crown corporation no longer needs, nor deserves, its monopoly stranglehold over first class mail and delivery to postal boxes. National postal services throughout the industrialized world are losing their monopolies to the great benefit of corporate and residential consumers. Costs have come down, service has improved and union power has been diluted. So why is Ottawa permitting Canada to be left behind? The irony is that by defending its use of "volumetric weight" to determine the cost of shipping parcels, Canada Post has proven why it is redundant. Canada Post uses a formula combining the size and weight of a parcel to set its shipping price. This ensures the postal carrier does not lose money on lightweight yet bulky packages. Most private couriers use a similar method, in fact. And that's the point. The use of volumetric pricing can sometimes result in the overcharging of customers by as much as 20%. By arguing before a judge that it has no more obligation to return any overages than its private competitors do, Canada Post inadvertently admitted it is nothing special. It has no moral claim on its monopolies. It is just another package-delivery service. The corporation's recent efforts to reinvent itself betray the same message. Services such as E-post -- by which Canada Post serves as a secure deliverer of e-mail bills and statements on behalf of retailers, utilities and other services -- are not part of its mandate and could just as easily be performed by private providers. They are little more than excuses for Canada Post executives and well-paid union workers to keep their jobs as the need for government postal service erodes. As Canada Post expands into the private-delivery market, what justification is there to keep its private competitors out of Canada Post monopoly operations? The answer is: No good ones. As the CD Howe Institute pointed out nearly a year ago, postal services in the European Union, Australia and New Zealand have all seen the addition of private competition, to varying degrees, in the past 15 years. In each case, the outcome has been much the same: Price has declined, service has improved and the might of postal unions to disrupt entire economies has been broken. According to the study by Edward M. Iacobucci, Michael Trebilcock and Tracey Epps, since private alternatives to New Zealand Post were first allowed two decades ago, "the proportion of letters delivered next day increased from 88% in 1988 to 97%." In Germany and the Netherlands, commercial shipments are up, while prices are off by 8% or more. Perhaps counterintuitively, the introduction of competition in the EU has actually added to their national postal services' bottom lines. It has made them more profitable, not less. This is in part because the need to be competitive has enabled them to rein in the unions that can hold them hostage over wage increases when they are the only carriers. Rural Canadians are often the most resistant to breaking Canada Post's monopolies. They fear private competitors will not service remote customers, preferring to pick only the low-hanging fruit in big cities. But that has not been the result of deregulation of other services, such as telephone, cable television and air service, so why would deregulating postal service be any different? Indeed, if Alberta's experience with privatization of government liquor sales is an indication, rural postal service will improve. Rural drinkers were among the most vocal opponents of disbanding the Alberta Liquor Control Board in the mid-1990s, fearing that the removal of subsidies for rural stores would mean the loss of convenience shopping. But where before privatization there were approximately 150 government liquor stores in rural Alberta, today there are nearer 500 private alternatives. Canada Post's monopoly is, itself, probably the greatest threat to rural service. Canada Post is obliged to provide rural service while mail volumes are declining, and approximately a quarter million new addresses being added each year. Because it has no competitors to force it to maintain rural service levels, it could easily decide to pare back rural service as it did drastically in 1981. There is nothing to stop Canada Post from, say, reducing rural deliveries to four times a week, or even just twice a week and claiming it is still meeting its "universal service obligation." Take away Canada Post's monopoly on first-class mail. Take away its monopoly on post box delivery. And end its harassment of private competition. Leave it with only a monopoly to print stamps. We let the Bank of Canada print money but don't insist it run all the bank branches and ATMs or have a monopoly over safety deposit boxes. The same principle should be extended to the mail. Take Canada Post Private From the Financial Post article by Paul Viera February 13 2007 The government should end Canada Post's monopoly on the postal market and follow the leads of Germany and the Netherlands in introducing competition to the sector, says the C.D. Howe Institute. "We believe the case for demonopolizing the Canadian postal sector and moving to some substantial degree of private ownership is compelling and consistent with developments in jurisdictions beyond Canada", the think-tank said yesterday in a report. "Failure to rethink the role and mandate of Canada Post, given the dramatic technological transformation that is occurring in the communications sector, would be to acquience in a slow-motion train wreck." Canada Post has monopoly over the domestic letter mail market, and is obligated to provide service at uniform rates across the country. For the 2005 fiscal year- the last for which numbers are available- the Crown corporation posted profit of $199 million on revenue of $6.9 billion. Canada Post has earned a profit in each of the past 11 years. Despite this streak, the C.D. Howe study said the Crown corporation faces major structural challenges. Mail volumes are decreasing even though the number of addresses continues to grow, by roughly 250,000 a year. This is due in large part ot business and residential customers favouring electronic forms of communication. Moreover, Canada Post faces increased competition in international shipping and delivery. In its 2005 annual report, Canada Post acknowledged that a revamp might be in order. "In order to operate successfully in the rapidly evolving marketplace, Canada Post needs to become more competitive and customer-focused. This will require a change in the way that Canada Post manages its business, its openness to outside trends and influences, and it willingness to engage with private sector partners." C.D. Howe said opening up the postal market to private sector competitors would force Canada Post to more efficient and potentially lead to increased dividends-in the form of fatter profits- for the federal coffers. "Privatizing Canada Post would improve its governance, and introducing competition would provide economic discipline that does not a present exist." it said. Concerns such as the commitment to uniform postal service across the country could be addressed through rules introduced at the same time that liberalization took effect. The think-tank cited the success of liberalization in other markets, most notably Germany, the Netherlands, New Zealand and Spain. In Germany, for instance, there are more than 1,000 firms offering letter delivery service. And in Spain, 40% of that country's mail volume is open to competition. Moreover, countries that have dabbled with liberalization would most likely be fierce, especially on the part of organized labour, whose relations with Canada Post management have been rocky at best. The Conservative federal government has not made postal market reform a priority item. But thte federal Cabinet ordered Canada Post to reverse its decisions regarding rural mail delivery and subsidies for magazines. Royal Mail From the BBC New OnLine "From 1 January, 2006, Royal Mail will lose its 350 year monopoly. Any licensed operator will be able to deliver mail to business and residential customers." Deutsche Post's Letter Monopoly to End in Early 2008 The German government has revealed that the letter monopoly of Deutsche Post German postal service operator, will end on 1 January 2008 Off Shore Printing No Fad From Mail: The Journal of Communication Distribution "Strategies for Management Inc, recently issued a report titled,'A Critical Look at Offshore Printing,' which found that the U.S. printing industry will continue to experience increased competition from overseas printing firms as the former barriers of print quality, turnaround times, language/cultural issues, shipping costs, and logistics continue to come down. Among the important research finding are these: All print buyers interviewed for the report and 'top-notch' offshore printers exhibit print quality levels that are 'comparable to U.S. print vendors'. Print buyers find that the combination of Internet connectivity and PDF workflows make job submission and management with offshore vendors easier and more inviting. Overseas printers are doing more commercial work in runs up to 10,000 pieces and shipping jobs via air freight to reduce turnaround times. Foreign printers are providing U.S. clients average price savings from 30% to 50% (including shipping), principally derived from lower labor costs." * UNEX QUALITY CONTROL SYSTEM FOR SERVICES The International Post Corporation (IPC) publishes the findings of its UNEX quality service surveys twice a year. This system, introduced in 1994, measures the delivery time for priority mail within the European Union, from the moment it is deposited to its final destination. Carried out by Research International, an independent consultancy firm, the purpose of this external control system is to encourage postal operators to improve the quality of their international mail service. The UNEX system takes three performance indicators into consideration to establish its evaluation criteria. The first is the proportion of letters delivered in D+3, adopted as the "speed indicator"; the second is the proportion of letters delivered in D+5, known as the "reliability indicator"; and the third is the average distribution time in each country, with Saturdays being taken into account in countries where mail is distributed six days out of seven. For a better appreciation of achievements, the UNEX system is based on the objectives defined by the European directive of 1997 which set the level at 85% for letters to be delivered within D+3 and at 97% for letters to be delivered within D+5. (Source: IPC). Key Mail Expands into Asia Pacific KEY MAIL EXPANDS INTO ASIA PACIFIC Key Mail Australia Pty Ltd. has opened a new strategic sales and operations centre in Brisbane, Australia. The facility, located at Unit 2, 46 Armada Place, Banyo, Brisbane, QLD, will enhance Key Mail's presence in the global mail and logistics market and is a stepping-stone for further expanision into Asia. The parent company, Key Mail Canada Inc. has been established for over 15 years, providing pioneer services to the international mail market in Canada. The first venture outside Canada was to the USA in 1999, and then to the United Kingdom in 2002. Now in Australia, Key Mail aims to be a market leader in the international mail and logistics industry by offering tailored solutions for direct mail, press and merchandise distribution. To reach this goal, Key Mail will strengthen its presence by establishing branches in Sydney and possibly Melbourne over the coming year, with further development planned for Asia and New Zealand. As a new player in the region, Key Mail has built its business on strategic partnerships with a range of postal administrations and airlines, which compliment our operations and provide our valued customers with a complete network of global-reaching resources and solutions. For more information regarding Key Mail Australia Pty Ltd., our services and the new facility, please contact Mr. Joe Malenica on 61 7 3256 6222 or E-mail: jmalenica@keymail.com.au ...