Reluctant ministry may open delivery of unsolicited mail

Under pressure from Prime Minister Junichiro Koizumi, a staunch advocate of postal deregulation, the posts ministry will consider allowing the private sector to deliver unsolicited direct mail, often dubbed junk mail.

But it will do so grudgingly. Mail delivery is the main source of revenue for the government-run postal services, and the Ministry of Public Management, Home Affairs, Posts and Telecommunications has long been fiercely protective of its turf.

Koizumi leaned on the ministry to take up the matter after parcel delivery firm Yamato Transport Co. abandoned its bid to offer postal services to indicate its displeasure with the content of legislation that would open the postal market to private businesses.

Yamato President Keiji Aritomi said the bill submitted by the posts ministry would “turn private companies into government-controlled businesses.''

With meaningful deregulation of postal services in doubt, the Koizumi administration is focusing its efforts on partially deregulating mail delivery.

The ministry will review the way it categorizes mail, with an eye to allowing the private sector to deliver some types.

Currently, the government postal system enjoys a legal monopoly over the delivery of all kinds of mail. According to the latest guidelines, unveiled in 1999 by the former Ministry of Posts and Telecommunications, that includes unsolicited direct mail-a marketing tool aimed at the masses-and mail containing credit cards, bills and event guides.

In contrast, private companies are permitted to deliver items like books, magazines, newspapers, catalogues, checks, securities and paintings, all of which are considered parcels.

As there is very fine line separating direct mail from catalogues, a similar advertising vehicle, advocates of deregulation believe its delivery could be turned over to the private sector. In fact, some transport companies and motorcycle couriers are already known to handle direct mail that has been packaged in parcel form.

Koizumi has repeatedly vowed that he would fight to ensure that the private sector win the right to deliver items like credit cards. After Yamato made clear that it would not seek to offer mail delivery, the prime minister ordered the posts ministry to review the definition to limit its scope.

The ministry has been working since December to draw up a new bill governing mail delivery. Critics say that by limiting the number of new entrants through strict market-entry provisions, the ministry is trying to minimize the threat of private competition for the public postal corporation that will begin offering postal services next spring.

Under the legislation, operators licensed to offer mail delivery and other postal services would be required to set up about 100,000 pick-up/drop-off points across the country and obtain permits to sell products they wish to sell.

The provisions were rejected angrily by Yamato, which was then the only company thought likely to try to offer mail delivery.

Secretly, however, private parcel delivery companies are cheering, because they are more interested in seeing the delivery of direct mail and credit cards deregulated than they are in offering the full postal services.

“Direct mail is attractive because it can be collected and delivered en masse,'' said a senior official of the Postal Services Agency.

According to the agency, which now operates the postal system, the volume of direct mail handled by the postal system has grown at rapid rates of between 4 percent and 8 percent a year despite the prolonged downturn.(IHT/Asahi: May 18,2002)