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Analysis of Postal Services Reform

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Most, if not all, national postal service providers deliver some form of Universal Service Obligation (the "USO"), and with the decline in the global letters market, these postal providers are under pressure to reduce costs and to become self-sustaining business enterprises.  As postal markets open up to commercial competitors, past financial and operational models for national postal services are no longer viable.  As a result, each such provider must change along with the market(s) in which they operate.

Leading up to 2010, many people in the postal industry across the EU considered the modernization effort at the United Kingdom's Royal Mail Group—the UK's national postal service provider—to become the template for how other EU governments could modernize their national postal service and postal marketplace.  The first five articles in the series provide information pertaining to Royal Mail specifically, but the articles contain pertinent information to help any national postal service to understand the distressed market in which they operate so as to reform their postal services to become competitive, while preserving their USO.  The article on EU Postal Liberalization also contains information pertinent to regulatory concerns that will impact the success of any national postal service that desires to operate a viable USO.

Articles:  Postal Service Reform

EU Postal Reform : UK National Postal Service Provider : UK Postal Regulator

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Royal Mail – Part-Privatisation[icon] PDF17 September 2009

This article addresses how postal service providers can remain competitive, as well as self-sustaining enterprises, as postal markets open up to greater competition and letter volumes continue to decline, using Royal Mail's modernization efforts as a working example.

Royal Mail – Part-Privatisation – Part 2[icon] PDF22 September 2009

This article identifies why postal services are experiencing letter volume declines as a result of new internet-based communication services (e.g., e-mail) using Royal Mail as a working example. By accurately understanding the new postal services market, national postal services can focus efforts and resources on building sustainable, competitive business models instead of focusing on dying business markets.

Royal Mail – Part-Privatisation – Part 3[icon] PDF07 October 2009

As letter volumes continue to decline and postal competition increases, postal service reforms are mandatory to ensure continued universal service offerings. This article examines the proposed process for reforming the UK national postal service provider (Royal Mail), highlighting common distressed industry mistakes and providing applicable examples to aid in the development of winning postal reform strategies.

Royal Mail – Beyond The Hooper Report[icon] PDF14 October 2009

Using the UK postal reform effort as an example, this article provides a detailed analysis of postal reform strategies, including strategies and tactics that damage or greatly reduce the valuation and survivability of national postal service providers.

Royal Mail – Beyond The Hooper Report – Part 2[icon] PDF20 October 2009

This article provides further analysis of postal reform strategies and includes an analysis of strategies by the major participants in the UK postal reform effort.

Royal Mail – Insurrection, Strikes, Strategy and Missed Opportunities[icon] PDF08 November 2009

This article is specific to UK postal reform efforts, and details how poor and conflicting strategies impede on the financial and operational success of a national postal service provider that no longer enjoys a market monopoly that existed in years past. The examples in the article emphasis if national postal service providers wish to remain viable, competitive and efficient service providers, they must shed their old business model mentality.

EU Postal Reforms – Are you Ready?[icon] PDF01 December 2009

This article addresses the topic of EU full postal competition rules relative to the challenges EU national postal service operators share as they prepare for the added competition and the impact such competition will have on their financial viability and universal service obligation.

Royal Mail – Calendar Year 2009 Review of Financials[icon] PDF12 January 2010

This article provides a financial analysis of Royal Mail's 2009 half-year financials, including an analysis of the various, often conflicting, claims made by Royal Mail management, the postal union and the politicians pushing for part-privatization.

Royal Mail – Calendar Year 2009 Review of Financials – Part 2[icon] PDF28 January 2010

This part of the article (part 2) provides a financial analysis of Royal Mail's end of year financials, including a discussion of Royal Mail's use of modified operating income numbers to distort actual operating profits during a decade long modernization effort that is focused mostly on automation, staff-reductions and consolidation of buildings and equipment, missing out completely on building new revenue streams necessary for sustaining their letters business and its universal service obligation.

EU Postal Liberalization - Examination of Changes to the Rules[icon] PDF26 March 2010

This article analyzes the EU Commissions position on EU postal liberalization, and defines how the current rules threaten a national postal service provider's ability to continue to offer universal service in the long-term, while proposing changes to the rules to ensure the mandate of universal service remains a viable offering for national postal service providers.

Royal Mail – Mid-2010 Review of Financials and Modernisation[icon] PDF06 June 2010

This article reviews major events impacting Royal Mail during the first half-year of 2010.

Royal Mail – Mid-2010 Review of Financials and Modernisation – Part 2[icon] PDF15 June 2010†

This article reviews Royal Mail's mid-2010 financial statement.

†21 June 2010; publication delay due to publisher print production issue.

Royal Mail – Mid-2010 Review of Financials and Modernisation – Part 3[icon] PDF28 June 2010

This article reviews the performance and modernization claims made by both Royal Mail and its postal union, as both claim Royal Mail's modernization effort is working and they are the reason for such success.

Royal Mail – 'John Lewis' Scheme to Cost Taxpayers Billions[icon] PDF06 July 2010

This article exposes a poorly conceived and expensive political strategy employed to garner support for privatization of the UK's national postal service provider given continued opposition to such a proposal, and includes a summary of the financial losses such a plan imposes.

Manipulation of Postcomm's QoS Relief Application Process[icon] PDF12 July 2010

This article defines manipulation of postal service quality of service (QoS) relief by applicants and provides solutions to counter any such manipulation attempts, while ensuring QoS penalties remain an effective deterrent to QoS failures even for applicants suffering adverse conditions.

The New Royal Mail[icon] PDF14 July 2010

Royal Mail is undergoing a leadership change, and the article discusses the changes for what is described as the New Royal Mail.

Royal Mail – Calendar Year 2010 Review of Financials[icon] PDF01 December 2010

Royal Mail has been undergoing modernisation reforms for nearly a decade, and their financial performance for 2010 is reviewed. Because actual financial reporting of expenses is mostly nonexistent, the article focuses on evaluating financial performance claims by Royal Mail and the postal union.