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Alpha Mail: How Irish Postal Liberalisation Can Still Succeed

Thursday, March 7th, 2013

John Tuohy, the chief executive of Irish parcel carrier Nightline, discusses the slow progress of postal market liberalisation in the Republic of Ireland.

In the two years since postal liberalisation took effect in Ireland, it could be argued that little has changed in terms of the service offered to householders and businesses – at least on the face of it.

The European Union’s so-called “third directive” promised to open up a majority of the continent’s postal networks to commercial competition, thereby providing a better quality and range of provision.

Whilst there has been a radical shake-up in some of the countries affected by the legislation, progress has been slower in other parts of Europe.

As an article in the new issue of Mail & Express Review documents in detail, Ireland has not just been battling with the administrative process of taking the EU’s broad requirements and applying them to a domestic context.

In our case, we’ve had near collapse of the national economy and haemorrhaging mail volumes to contend with too. Since 2008, the amount of business and residential mail being handled by the state operator An Post has fallen by close to a third.

The situation has become so precarious that some informed commentators have been speculating whether there would be much of a postal service for any private firms to compete over once ComReg, Ireland’s communications regulator, has finished putting in place the framework within which An Post and external companies must operate. [Editor's note: ComReg tells Post&Parcel it has finalised its framework, as of October 2012. See note below]

One expert has gone so far as to suggest that if the current rate of decline continues, Ireland’s daily delivery system will become unsustainable.

I strongly disagree and not because of any sense of cock-eyed optimism.

Choice, quality and value

The process of liberalisation has certainly taken too long and seems not to have fired commercial ambitions as the EU hoped that it might.

Nightline is one of only five firms which, along with An Post, have registered with ComReg as intending to provide postal services.

Let me make it clear, though, that we have never envisaged ourselves slugging it out with An Post. Instead, we believe that the success of liberalisation rests with private companies identifying niche areas in which they can add choice, quality and value in partnership with An Post because it has the universal service provision and the existing delivery infrastructure.

It’s a similar scenario to the UK which, after its own liberalisation, has seen private businesses injecting items into the Royal Mail’s network for ‘final mile’ delivery.

However, in the continued absence of clear guidelines from the Irish regulator as to how to function both on service and price, no-one can proceed with any confidence.

The sort of shot in the arm which direct marketing has provided Royal Mail with can be achieved in Ireland. Of course, for DM to take off as it can needs a national, fully-functional postcode system too, news about which we’re told is – to use a phrase – in the post.

I think everyone with any interest in rejuvenating and sustaining Ireland’s postal would agree that time is of the essence. The ideas and energies which the private sector possesses are, in my opinion, key to achieving progress.

We need to move fast, though, in order to ensure that business and citizens recognise the importance of post before they get too conversant with Inboxes rather than letterboxes and consign a truly historic form of communication to history.

John Tuohy is the chief executive officer and managing director of Irish parcel carrier Nightline, co-founding the company with David Field back in 1992. The firm now handles one in four of all parcels on Irish roads.

  • Editor’s note: ComReg responds to this article to clarify:
“As a result of the liberalisation of the provision of postal services in Ireland, it is possible that postal service providers, of which Nightline is one, might wish to negotiate agreements to access the postal network of the designated universal postal service provider. These are commercial agreements and as such it is primarily competition law that regulates the right to enter into such an agreement, and the negotiation process. ComReg does not have competition law powers in the postal sector.

“Notwithstanding this, ComReg is required by the Communications Regulation (Postal Services) Act 2011 (“2011 Act”) to establish and maintain procedures in the certain cases where ComReg is invited to intervene to resolve disputes concerning access to the postal network of the universal postal service provider by a postal service provider. ComReg has met this requirement of the 2011 Act by establishing dispute procedures in October 2012 (see http://www.comreg.ie/_fileupload/publications/ComReg12111.pdf). Consequently, ComReg has met the requirements of the 2011 Act on this aspect and nothing remains outstanding at this time.”

Source: John Tuohy, Nightline

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Alpha Mail: How Irish Postal Liberalisation Can Still Succeed

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