At recent meetings of the Universal Postal Union (UPU), there has been discussion of the Global Postal Network. What this means at the UPU may not be the same as it might seem to a group of international mailers. The UPU’s Global Postal Network is the exchange of mail among its member countries’ official, designated postal operators. Mail moves from one designated operator to another for delivery. It does not include the many mail service providers that international mailers may use to move their mail toward its final destination country.
Near-shoring and B2B2C mail had considerable attention at recent UPU meetings, and were not familiar concepts to some postal operator and country representatives. That items for delivery to consumers in other counties are handled by more than one business en route will not come as a surprise to mailers. Neither will the current trend of near-shoring to locate distribution closer to final destinations.
The UPU is a UN specialized agency coordinating the exchange of mail among its 192 member countries. It’s an intergovernmental agency—a group of government representatives, not of postal operators. Each country decides who represents it, and that representative can be their designated postal or another governmental agency. (For the US, the Department of State is the authorized representative.) The UPU staff and member countries have been exploring once again ways to incorporate what the UPU terms wider postal sector players in UPU discussions and meetings, with little actual change to the UPU’s decision-making.
So, as letter mail volumes continue to shrink and postal package volumes do not grow as much as anticipated, the official agency for coordinating the exchange of mail continues to talk primarily with governments and their designated postal operators. Meanwhile, a significant volume of packages to consumers travels internationally outside this narrowly defined Global Postal Network. The continuing decline in overall volumes and an increase in the proportion of packages is putting pressure on that network.
The decrease in overall mail volumes has led some countries to question the viability of the Universal Service Obligation (USO). The UPU in Article 3 of the Universal Postal Convention obliges all 192 member countries to ensure that all postal customers enjoy the right to a Universal Postal Service (UPS) involving the permanent provision of quality basic postal services at all points in their territory, at affordable prices. (What constitutes quality basic service or affordable prices are not defined.) Domestically, the USO in each country may vary greatly, specifying delivery frequency, time to delivery, pricing, and other conditions. In some countries, the USO is detailed and codified in law and, in others, it is not clearly defined.
Denmark removed its USO as of January 1, 2014, for most mail with exceptions for mail to some islands, material for the blind, and inbound international mail. The UK’s postal regulator, Ofcom, is holding hearings and soliciting opinion on their USO, saying, “Universal postal service must modernize.” They cite that letter volumes have halved since 2011. Denmark and the UK have a liberalized postal sector, allowing competitors to the designated postal operator, as do most highly developed countries and some less developed countries. A lack of postal sector competition does not improve the situation for the postal operators, as seen in both the US and Canada, where mail volumes continue to decline.
Related to this, and another effort to reduce postal delivery costs, are changes to postal delivery schedules. New Zealand has moved to three days a week in cities and towns, with five-day-a-week rural delivery. Italy has moved to three-day-a-week delivery in areas with low population density. Norway, Sweden, and Belgium have moved to alternate day delivery—two days one week and three days the next. Slower delivery is also occurring to reduce costs with more days between mail entry and delivery. This is sometimes combined with fewer days of delivery or, as in the US, with full five- or six-day delivery schedules.
As delivery expectations by consumers continue to be for quick and free service (to them), merchants will watch the delivery trends by the postal operators. If their delivery is insufficient, more packages will move to private delivery services. The postal operators can ill-afford to lose more volume.
The worldwide network of mail delivery has changed irrevocably to include warehousing, logistics, and mail processing service options that did not previously exist. For the postal network to remain relevant, particularly with small packages, the world’s countries and designated postal operators must recognize the realities of today’s international mail logistics from the merchant to the consumer.
Merry Law is President of WorldVu LLC and the editor of Guide to Worldwide Postal-Code and Address Formats. She is a member of the UPU’s Addressing Work Group and of the U.S. International Postal and Delivery Services Federal Advisory Committee.
This article originally appeared in the March/April, 2024 issue of Mailing Systems Technology.
