Lost Mail: Spotlight on Sepomex

Mexico's postal service looks to monopoly as a solution to its financial woes

You can't blame them for trying. The Mexican Postal Service (Sepomex) first began losing money in 1999, but by 2000, losses were reaching $200 million pesos a year, and $600 million pesos in 2001.

But now, the state-owned company is crying foul over what it calls "illegal competition" from well-known private foreign and domestic courier companies. The massive influx of competition has been further exasperated by the increasing popularity of email. In the face of its imminent demise Sepomex, the Transport and Communications Secretariat has sent a controversial reform proposal to the Chamber of Deputies that has private courier companies barking mad. The proposal would consolidate Sepomex's position within the market and so assure its survival, that has companies like Multipack, DHL, Fedex and UPS barking mad.

The proposal calls for all packages or letters weighing 350 grams or less to be sent only through Sepomex, except where a private firm offers extra services, such as postal tracking, immediate delivery, or digital signatures, or where the company charges at least double Sepomex's price for the delivery. Sepomex says that under such a framework, they would increase its volume by 320 million items per year by 2004.

CONTRADICTIONS

Funnily enough, current regulations already dictate that any package that weighs less than 1 kilogram must be sent through Sepomex, although the law is rarely enforced and easily worked around. And so, the proposed 350-gram limit intends to offer authorities a more enforceable alternative.

QUICKER SERVICE? Sepomex hopes protective legislation will help it Improve its finances.

Of course, anyone who has ever sent any correspondence through Mexico's post office can't help but feel that Sepomex has brought its problems upon itself. While things are beginning to improve, letters from international addresses still often take months to reach their Mexican destinations, and letters containing anything of value are unlikely to ever arrive at all.

The problem, apart from the corruption that leads to theft, which officials say is now harshly dealt with, is that Sepomex counts on outdated systems. A peak into any post office confirms the suspicion that employees far from rely on computers. As well, Sepomex, similar to many state companies, has more employees than it can pay.

Between 1995 and 2000, Sepomex cut 4,000 jobs, and this year another 1,000 jobs must go, but the question is whether reforms can actually come in time to save the company from complete collapse. But for now, that's for legislators to decide.

YOUR LOSS IS MY GAIN

It is mostly the private companies that have benefited from Sepomex's bad reputation, with famous names such as Multipack, UPS, Federal Express, DHL, Estrella Blanca and Estafeta delivering half of all corporate mail, which once represented over 80% of Sepomex's income.

Competitors have reacted differently to the proposal before Congress, with some complaining that such a move, if implemented, would mean the end to private mail services.

"It would massively damage the industry and oblige many companies to leave the market," said Multipack's the press chief Luis Javier Barroso.

But other companies are more optimistic that even with government restrictions, private companies will always be able to offer more for a customer's money. UPS head of marketing Angel Torres told local press that he felt that the market was different anyway. "If we offer value added services, these type of reforms will not really affect us."

The question remains whether, even under new laws, customers would go back to Sepomex, or would simply swallow the higher prices forced upon private couriers. Anyone who has relied upon the official postal service in the past will need more than legal reforms to convince them that Sepomex has become a trustworthy company that is capable of getting the mail where it has to be, on time.

Paul Day is a Mexico City-based freelenace writer and correspondent for a London-based news wire service.