OIG publishes report on international postal price regulation
The US Postal Service (USPS) Office of Inspector General (OIG) has published a report which looks at how postal prices are regulated in Australia, Canada, France, Germany, and the United Kingdom. The report, which was produced for OIG by WIK-Consult, found that in all five countries “regulators revisited and modified price regulation to allow for greater pricing flexibility in response to changing market conditions”.
OIG commented: “Changes occurred in two ways — reduction in the scope of products covered by regulation and allowance of higher price increases on regulated products. Most recently, the changes have allowed price increases that are greater than inflation.”
Summarising the key findings, OIG said: “It appears that the combination of higher prices, efficiency gains from modernization, and growing parcel volumes have helped to stabilize the posts’ respective financial positions.
“In general, service has remained stable or declined slightly, but it is unclear what is driving this result. Price increases may have allowed the posts sufficient revenue to maintain service. However, it is also possible that service performance has been driven by better enforcement mechanisms or more achievable service goals.”
As previously reported, the US congress is currently reviewing a bill, the Postal Service Reform Act of 2017, which seeks to transform the structure of USPS. This new report on how price regulation works in over countries will feed into the ongoing debate over the way forward for USPS, which last week announced a hefty net loss for the latest financial quarter.
Click here to view a PDF of the full report.