Privatised Japan Post to deliver large parcels
The new entity to be established after the privatisation of Japan Post in 2007 will be allowed to deliver large parcels such as ski equipment and golf bags, a service very popular with customers of private delivery companies, government sources said.
According to the sources, the government plans to ease the current size restriction of parcels for the new entity to make competition as fair as possible with private-sector companies.
After privatisation, the entity will no longer have the benefit of being exempt from paying corporate tax.
Under the Postal Law, a parcel should not exceed 30 kilograms in weight, and the sum of its width, depth and height should be 170 centimeters or less. The law also obligates postal service operators to collect and deliver any parcel that meets the criteria, even if they have to go to a remote area that might be unprofitable.
By contrast, the Universal Postal Convention, of which Japan is a signatory, gives narrower criteria. The convention stipulates that a company’s obligation to deliver nationwide only applies to parcels weighing 20 kilograms or less. When Japan Post is privatised, the government will adopt this international criteria for the postal service.
By doing so, the privatised entity can decide how to handle parcels weighing more than 20 kilograms to facilitate more efficient operations. For example, it could rule out the collection or delivery of such large parcels to unprofitable addresses, or it could charge higher rates to cover the cost.
Should this happen, consumers are unlikely to be greatly affected as many private sector delivery companies already collect and deliver parcels weighing more than 20 kilograms across the country.
The government also agreed, in principle, that after privatisation the nationwide service would not apply to postal savings and postal insurance, reducing the scope of operations covered by the privatised body.
Due to legal size restrictions, Japan Post has been unable to offer the service of sending ski or golf equipment from a customer’s home to a ski resort or a golf course, for example, although such a service already is offered by Yamato Transport Co. and other companies. By allowing the new entity to handle oversized items as postal parcels, the government believes the entity will gain greater management freedom and earning power to compete with rival companies, the sources said.
