Japanese mail firms must install 100,000 mailboxes each

The government has mapped out a policy to make it obligatory for firms entering the mail delivery industry to install about 100,000 mailboxes each, bringing the total number of privately installed mailboxes close to 60 percent of those currently used by the Postal Services Agency.

But a major home-delivery operator that is considering entering the state-monopolized market said it would examine this condition and decide whether it would be feasible to offer a mailbox collection and delivery service for letters and postcards.

There is persistent opposition to the privatization of the three post office services of mail delivery, savings and insurance within the Liberal Democratic Party.

Regarding the Public Postal Corporation to be set up in April next year to take over the three services, the Public Management Ministry has decided to limit the corporation’s investment in the private sector field of mail service-related businesses.

The ministry is believed to have made the decision because of the possible impact of the corporation’s investments on private financial institutions.

Since the corporation’s savings and insurance businesses will own assets worth more than 300 trillion yen, its investment in the private sector might adversely affect private businesses.

However, the government’s mail delivery business has been in the red for three consecutive years due to more intense competition with the private sector in such businesses as parcel delivery.

The ministry reportedly decided to allow the corporation to invest in the private sector mail-delivery market to improve efficiency by outsourcing some of its operations, which could lead to increased profitability.

The ministry is expected to explain these policies at a meeting of the LDP General Council on Tuesday in the hope of including them in related bills, including the one concerning the new corporation, to be presented to the Diet by the end of this month.

Prime Minister Junichiro Koizumi, a strong advocate of postal privatization, and Public Management Minister Toranosuke Katayama agreed in December to make it obligatory for private mail delivery businesses to satisfy three conditions before entering the market.

The first condition is that firms must charge the same prices to ensure equal standards of mail service in urban and rural areas. The firms must also charge 80 yen or less for handling the lightest postcards and letters, and they are obliged to set up mailboxes nationwide with daily collections.

The government said the 100,000 mailbox condition would help ensure certain standards of service.

So far, only Yamato Transport Co. has confirmed it will enter the mail delivery industry. The major parcel delivery operator has 310,000 outlets, including convenience stores, but many are in highly populated urban areas.

Since the ministry is set to urge private companies to set up mailboxes nationwide based on population density, Yamato will be obliged to establish a further certain number of mailboxes to spread the service to rural areas.