Polish Post warning over next universal service contract

Polish Post is preparing to bid to retain its position as the designated operator of Poland’s universal postal service – but has warned of the dangers of awarding the contract to the company offering the lowest prices. The contract to run Poland’s universal service between 2016 and 2025 is expected to be put out to tender by the end of this year by the government’s Office of Electronic Communications.

Polish Post was the designated operator appointed for 2013-2015 under the country’s 2012 postal reform legislation, opened the nation’s postal market fully to competition last year.

The state-owned company said the next contract for the universal service will be “of great importance” in shaping the PLN 7bn Polish postal market for the next decade.

Polish Post claims it is the only company with the necessary infrastructure to meet European Directive standards for running the universal service.

But, in announcing its intentions to seek the next contract, it warned that if the government selects the next operator on pricing alone, Polish citizens will receive postal services of a lower quality than regulators currently require.

“One of the main areas where private postal operators may make savings are in labour costs,” the company said. “Full-time employment of tens of thousands of people with adequate training can easily be replaced by hiring contractors or by using temporary contracts, depriving employees of adequate welfare and retirement facilities, and denying the customers professional services.”

Prior to full liberalisation of the Polish postal market, Polish Post had competitors circumventing established monopoly protections for letters up to 50g in weight, by adding small metal weights to each letter to take them above the weight threshold.

Polish Post has been investing considerably in its e-commerce capabilities and its digital communications services in order to spur growth and challenge market competition.

At the end of last year there was a significant setback as a private sector group won a key public sector mail contract, for the delivery of legal mail for Poland’s courts and prosecutors.

One of Polish Post’s key market challengers, InPost, is considering whether to mount a bid for the universal service contract itself. The company, part of the Integer.pl Group, which is well known internationally for its parcel locker terminal business, is said to be waiting on the guidance from the regulator on the tender itself before making a decision.

Network

Polish Post said according to the nation’s postal regulations, a designated operator should have a network of post offices and distribution centres to allow the continuous provision of postal services, collecting five days per week.

The designated operator is required to collect letters up to 2kg and domestic parcels up to 10kg, along with international parcels up to 20kg in weight, as well as providing services for the disabled.

But, the Post said the designated operator is also expected to be ready to perform tasks for the national interest, including for defense, state security and public order.

Jerzy Jóźkowiak, the Polish Post president, said his firm was confident about winning the tender.

“The decision to participate in the tender is obvious,” he said. “Our network of about 7,500 post offices and 25,000 employed mail carriers ensures efficient and secure postal services throughout Poland.

“We have served the Polish people for more than 455 years. The changes we have implemented in recent years and recent initiatives allow us to feel confident that we are fully prepared for the advent of digital communication.”