A long and stony road to European postal competition
Following full liberalisation in four European countries (UK, Germany, Sweden and Finland), about 54 pct of the total EU mail market in volume terms is now completely open to competition, Alex Dieke, head of Postal Services and Logistics for German-based market research institute wik-Consult, told last month’s World Mail & Express Europe conference in Budapest organised by Triangle Management Services. But experience from these four liberalised markets showed that “it will take a long time for effective competition to arrive”, he commented. In the long-term, competitors might be able to gain up to 20-25 pct of larger markets, he forecast.
In Britain, which liberalised in 2006, competitors such as UK Mail and TNT Post had gained a 10 pct market share in terms of “upstream” volumes collected from customers but there was still no major competitor to Royal Mile for “last-mile” deliveries to businesses and consumers, Dieke said. In Sweden, where the market was opened in 1993, competitor CityMail still only had about 10 pct of the market. In Finland, which liberalised in 1997, high entry barriers meant there was no real competitor to Itella. In the Netherlands, which along with Slovakia might open its market before the official EU-wide liberalisation date of January 2011, competitors Selektmail and Sandd had gained 12 pct of the market despite TNT’s remaining monopoly, he noted.
Iain McLure, CEO of Spring Global Mail, criticised European postal operators for the repeated delays to liberalisation in recent years. “How long does the postal sector need to get prepared for competition?” he asked. In future, postal operators would have to focus on offering products in line with customer demand, better customer service and opportunities to achieve cost savings, the experienced postal manger forecast.
Spring, the TNT/Royal Mail/Singapore Post subsidiary, regularly used alternatives to national postal operators in some markets in order to provide quality services and lower costs, McLure pointed out. But he stressed: “As a broker, we are more of a customer (to postal operators) than a competitor.” Spring had been profitable for the past eight years, he noted.
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