The Future of the Postal Sector in a Digital World

Abstract

Worldwide, postal operators have been slow to address the threats from and opportunities created by electronic competition. The European Commission and member states are wrestling with these issues, while at the same time continuing to deal with the interrelated issues of implementing entry into postal markets and maintaining the universal service obligation. The Postal Accountability and Enhancement Act of 2006 in the U.S. exacerbated financial and managerial problems faced by USPS that result in part from electronic substitution for letter delivery. A major aim of this book is to examine policies to address postal operations in a digital world and ways in which postal operators might reinvent themselves to respond to threats and exploit opportunities. Potential opportunities examined include parcels, e-commerce, digital delivery, regulatory innovations and pricing. This book will be of interest to postal operators, regulatory commissions, consulting firms, competitors and customers, experts in the postal economics, law, and business, and those charged with the responsibility for designing and implementing postal sector policies. Researchers in regulatory economics, transportation technology and industrial organization will also find considerable food for thought in this volume. Preface and Acknowledgments; List of Sponsors; Contents; Contributors; Price Cap Regulation and Declining Demand; 1 Introduction; 2 The Implications of Declining Demand for USPS; 3 The Declining Demand Problem Under PCR; 4 Price Caps with Changing Demand; 5 Relevance Across Regulated Sectors; 6 Summary and Conclusion; Appendix; References; Scale Economies and Postal Price Caps in Europe: Declining Volumes, Lower Productivity, Higher Postage?; 1 Introduction; 2 Volume and Price Trends; 3 Postal Price Caps in Europe; 4 Conclusions; References; Origins of ``Universal Servicé́ 1 Introduction and Motivation2 Developing the Language of Universal Service; 3 International Postal Legislation; 3.1 European Postal Legislation: Postal Services Directives (1997, 2002, and 2008); 3.2 Universal Postal Union; 4 UK Postal Legislation; 4.1 Post Office Acts 1908 and 1953; 4.2 Post Office Act 1969; 4.3 British Telecommunications Act 1981; 4.4 Postal Services Act 2000; 4.5 Postal Services Act 2011; 5 Concluding Thoughts; References; Implications of Recent Developments in e-Commerce for Universal Service Providers and the USO; 1 Introduction; 2 Evolution of e-Commerce. 3 The Delivery Conundrum and the Problems of Returns4 The USP Response and the Implications for the USO; 5 Conclusion; References; Which Universal Service Obligation Attributes Do Americans Value?; 1 Introduction; 2 Review of Previous Studies; 3 Survey; 4 Model; 5 Willingness to Pay Results; 6 Alternative Analysis of Results; 7 Willingness to Pay by Subpopulation; 8 Conclusion; References; Impact of Market Dynamics on the Net Cost of the USO; 1 Introduction; 2 Review of Relevant Literature; 3 Interaction Between e-Substitution and the USO; 4 The Model; 4.1 USP Revenues; 4.2 USP Costs. 4.3 Hypothetical Absence of the USO5 Results; 5.1 The Base Case; 5.2 Impact of e-Substitution; 6 Extensions and Discussion; 6.1 Zonal Service Variations and the XY Delivery Model; 6.2 Premium Network; 7 Key Conclusions for Policy Design; Appendix: Robustness of Our Assumptions; Selected Model Sensitivity Results; Summary on the Importance of Various Parameters for the Sign and Magnitude of the Net Cost; References; Innovation, Disruption, and Partnering: Changing the DNA of Posts from the Inside Out; 1 Introduction; 2 Innovation and Strategic Intent; 3 Disruptive Technology Forces. 4 Changing the DNA of Postal Operators5 Conclusion; References; Postal Strategies in a Digital Age; 1 Introduction; 2 Literature Review; 3 Selected Country Studies; 3.1 Australia Post; 3.2 New Zealand Post; 3.3 Poste Italiane; 3.4 Royal Mail Group; 3.5 Swiss Post; 3.6 US Postal Service; 4 Performance; 5 Generic Strategies; 6 Conclusion; References; Case Studies in End-to-End Delivery Competition; 1 Introduction; 2 Country Mini Case Studies; 2.1 Germany; 2.2 Italy; 2.3 The Netherlands; 2.4 New Zealand; 2.5 Poland; 2.6 Spain; 2.7 Sweden; 2.8 The United Kingdom.