Author: Archive

Canada Post due for big changes: C.D. Howe Institute Study

Posted by | Feb 12, 2007 | |

As change sweeps the postal sector, major reforms are due at Canada Post, according to a C.D. Howe Institute study released today. In Rerouting the Mail: Why Canada Post is Due for Reform, authors Edward M. Iacobucci and Michael J. Trebilcock, Professors in the Faculty of Law, University of Toronto, and Tracey D. Epps, Lecturer in Law, University of Otago, recommend that Canada Post, the government-owned monopoly, should ultimately be privatized, with an eye to improving postal performance.

The authors say Canada’s current postal system is anachronistic and incapable of responding to new challenges, such as the ubiquity of Internet communication, advances in retail services and logistics, and increasing competition from domestic and foreign competitors in numerous market segments.

The authors recommend a measured transition for Canada Post, with the federal government introducing competitive deregulation on a gradual basis to allow Canada Post and its workforce to make the required transition. Ottawa should also establish a regulator to oversee the system, a complaints bureau for citizens and consider subsidies, if required, to maintain universal postal service. Without reform, the postal service risks costly decline.

Many countries have undertaken postal sector reform with success, they note. In numerous European Union countries, there have been major improvements in on-time or next-day delivery and other measures of service quality. And in New Zealand, where economic liberalization has been most sweeping, the proportion of letters delivered next day increased from 88 percent in 1988 to 97 percent currently.

In the authors’ view, privatizing Canada Post would improve governance of the business, and introducing competition would provide a form of economic discipline that does not at present exist.

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USPS to introduce shape-based pricing

Posted by | Feb 12, 2007 | |

As part of its proposed May 2007 rate change, the United States Postal Service (USPS) will introduce Shape-Based Pricing, one of the most dramatic postage structure changes in years. The initiative is being implemented as a way for the USPS to better align postage rates with its mail processing costs, and its implications for mailers are expected to be two-fold. First, there will be a significant increase in postage costs for various types of mail pieces – in some cases 30% to 90%; and secondly, it could significantly change how a company processes its mail. In addition to the Shape-based Pricing initiative, traditional first class postage is expected to increase nearly 8 1/2% – to USD 0.42 up from USD 0.39.

When Shape-Based Pricing goes into effect, there is the potential for organizations unprepared for the new processing requirements to experience frustration and increased costs as they become accustomed to the numerous changes being introduced.

Currently, the USPS primarily uses a weight-based method to determine postage costs for letters, flats and parcels. With mail processing costs rising, and with the need to encourage customers to prepare mail in ways that increase efficiency for USPS processing methods, the Shape-Based Pricing initiative moves from a pure weight determination factor for postage costs to one that combines size, thickness and weight. Because of their shape differences, letters, flats and parcels will now all be priced differently, since each is handled and processed differently. Simply put, an item that is easier for the USPS to process will cost less than an item that is not.

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India Post lines up Rs 6K cr to connect post offices

Posted by | Feb 12, 2007 | |

In a bid to cut down losses and achieve a higher degree of competitiveness, the Department of Post has put together an ambitious action plan to connect most of its major post offices across the country. The Department is planning to invest Rs 6,000 crore for the technology upgradation across its postal network.

“India Post strongly needs to enhance its technology to compete with the private players,” Department of Post secretary I.M.G Khan said, adding that “We have put forward our proposal to the Planning Commission for consideration in the 11th Five-Year Plan”.

The DoP has an investment plan of Rs 12,000 crore during the 11th Five-Year Plan (2007-12). Khan said his department would invest 50 per cent (Rs 6,000 crore) of its proposed expenditure of the 11th Five-Year Plan in computerising and connecting its 1.5 lakh post offices across the country.

“We are setting up a National Data Center in Delhi, which will be ready by May and would connect about 1,300 major post offices in India while the rest would be connected through other technology,” Khan added.

He said there are various possibilities of leveraging our huge network for other business models such as retail, banking and insurance. The Department of Post is already in talks with some general insurance companies for fee-based distribution of non-life products in the rural market.

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San Francisco and Los Angeles International Service Centers to be awarded

Posted by | Feb 12, 2007 | |

The U.S. Postal Service’s San Francisco and Los Angeles International Service Centers (ISC) are being recognized for achieving the highest international standards of excellence in mail processing.

Each center will receive a Certificate of Excellence from the International Post Corporation (IPC), a cooperative association of 23 national postal administrations and operators from North America, Europe and the Pacific. The Certificate of Excellence is awarded only to international mail facilities that demonstrate top levels of quality, efficiency and teamwork while meeting customer needs.

Achieving certification is a year-long process including on-site reviews by the IPC to verify compliance with more than 140 items. Certification is awarded for a three-year period, with continual IPC validation that performance levels are maintained.

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Royal Mail preparing for election season

Posted by | Feb 12, 2007 | |

Royal Mail is in talks with Government authorities throughout the UK about their postal voting needs during the national assembly and local elections this spring.

A range of postal voting services are available to local authorities and national assemblies to help them with their time-critical election campaigns, with a range of delivery and return services that meet their specific needs. These include pre-sorted election returns to a specified selection, such as by ward or constituency, separation of election mail from normal postal items as well as timed deliveries and the return of postal votes on the polling day evening.

Royal mail has also developed a best practice guide to postal voting, which includes advice and information on the design and production of an election mailing through to distribution and returns as part of a four-stage plan to managing the process. This is available at www.royalmail.com/postalvoting

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Indian postal department (DoP) to use RFID for logistics posts

Posted by | Feb 12, 2007 | |

If all goes well, the postal department (DoP) will be the first organisation to use the radio frequency identification (RFID) technology for its express parcels and logistics posts. “We want to be the pioneer in the express industry to use the RFID technology,” John Samuel, general manager, business development and marketing directorate, said. To realise its dream, the department proposes to make huge investments in the cutting-edge technology. The department has already put forward a proposal of Rs 12,000 crore to the planning commission during the 11th Five Year Plan for its consideration. “Our aim is to provide high quality services and meet the business needs of our customers along with increasing the customer base. The department plans to allocate Rs 6,000 crore towards upgrading its technology,” Samuel added. He noted that the department plans to invest in technologies such as RFID and web-based customer response system. Leading post offices worldwide, including the US Postal Service, Royal Mail and Deutsche Post, have reformed themselves by investing in cutting edge technology. “The postal department with over 1.55 lakh post offices across India, is in the process of setting up a national data centre that would directly connect over 1,300 post offices nationwide,” a senior business development official said. “Computerisation of all the post offices will streamline the operations of the department. In addition, the department hopes to wipe out its budgetary deficit of around Rs 1,200 crore,” he added. The official said that the investment for the technological upgrade will be allocated out of the “planned fund.”

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The Impact of Competitive Entry into the Swedish Postal Market

Posted by | Feb 12, 2007 | |

This paper examines how Sweden Post confronted its new competitor and describes the impact of postal competition in Sweden. The paper begins by tracing the origins of competition in the Swedish mail market. Next, it quantifies the challenges faced by the new entrant, CityMail, into a business characterized by large economies of scale. Third, it describes Posten’s responses to competitive entry. Fourth, it assesses the impact of competition on Sweden’s postal prices. Finally, it quantifies the impact of Posten’s response to competition on Swedish consumer surplus.

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Jordan looks for US$6bn investment

Posted by | Feb 11, 2007 | |

Investors from the GCC look set to begin a mad dash to acquire a foothold in Jordan’s economy as the Hashemite Kingdom invites offers for private companies to take a stake in key infrastructure projects.

Jordan will embark this year on a five year plan to lease key utilities and infrastructure, including airports, to investors and expects investments worth USD6bn, the Privatisation Commission’s head said on Tuesday.

Mohammad Abu Hammour, the head of Jordan’s Executive Privatisation Commission, said the “public private partnership” strategy to be launched in March would outline opportunities for international investors to run ports, utilities, postal services and public transport. “So our estimate for the coming five years is that we will have no less than USD6bn of public private partnership projects,” Abu Hammour said, referring to deals such as Build Operate Transfer (BOT).

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