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Research for the TRAN Committee
Postal Services in the EU
21/01/2020
Martina Facino and Mindaugas CerpickisCopenhagen Economics
21/01/2020 Presentation for the Committee on Transport and Tourism 1
Presentation for the Committee on Transport and Tourism 2
Main developments in the EU postal sector1
Challenges, opportunities and policy responses2
Recommendations for EU postal policy makers3
Structure of the Presentation
21/01/2020
1. Main developments inthe EU postal sector
Presentation for the Committee on Transport and Tourism 4
Evolution of EU postal regulatory framework
21/01/2020
1992 1997 1999 2002 2003 20082006 2010 2012 2018
Green Paper onthe development
of the singlemarket for postal
services(COM/91/476)
Postal ServicesDirective (97/67/EC)
First reduction ofthe "reserved
area”
Postal ServicesDirective
(2002/39/EC)
Secondreduction of the"reserved area”
Third reductionof the "reserved
area”
Postal ServicesDirective
(2008/06/EC)
Full marketopening for 16Member States
Full marketopening forremaining
Member States
Regulation oncross-border parcel
delivery services(EU) 2018/644
Presentation for the Committee on Transport and Tourism 5
Development of revenue in letter post and parcel & express segments, billions Euro
56%53%
44%
2013
47%
2014
45%
55%
90
2015
42%
58%
2016
84
Letterservices
Parcel &express
86 882,4%
The postal and delivery sector is significant to the EUeconomy
21/01/2020
Presentation for the Committee on Transport and Tourism 6
50
100
150
200
20192013
Letterpost
Parcelandexpress
Digital communication is transforming the postalindustryDevelopment of domestic volumes, %
21/01/2020
The competitive landscape is evolving
Presentation for the Committee on Transport and Tourism 7
HUFI
100
FR
90100100
66
MT
85100
90
UK BE PT LV
81
IT PL EL SIIE
93
100
SK BG ES DE SE NLRO
100
78
CY
100 99 97 95 91 89 85 85 81
Universal service providers’ share of domesticaddressed letter deliveries, %
21/01/2020
Digital deliveries? (email, e-banking,..)
70
60 6056 53
45
32 323229 28 25 25 25 22
20 1813 10
5 4 2 2
PLPT MTNLLV SIFI ESHUCZ FR PT HRBE IE ROSK EE IT BGELCY LT
100
Universal service providers’ share of domesticparcel & express deliveries, %
Letters Parcel & express
Presentation for the Committee on Transport and Tourism 8
20152013
4.7%
2014 20172016
5.3%
4.6%5.0%
3.5%
-7%
Financial performance of the incumbent postaloperators has been decreasingDevelopment of universal service providers’ profitability in the EU
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Average EBIT (earnings before interest and taxes) margin
Presentation for the Committee on Transport and Tourism 9
More attention is paid to the impact on theenvironment
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• Changes in the productmix have importantimplications for postaloperators’ directenvironmental footprint
• The true net-effect of thepostal and e-commercedelivery sector on theenvironment has not beenappraised 36
436
ParcelLetter
x12
Grams CO2 per item, 2016
2. Challenges,opportunities and policyresponses
Presentation for the Committee on Transport and Tourism 1121/01/2020
Changing user needs lead to lower volumes (at different pace in differentcountries)
Sustainability of postal operators is under pressure
Challenge to sustain basic postal service for vulnerable users
Challenge to relocate postal workers
Pressure from other regulation (e.g. environmental regulation for inner citydelivery)
Challenges
Presentation for the Committee on Transport and Tourism 1221/01/2020
Growinge-commerce
Universal serviceproviders’ network
and brand value thatcan be leveraged to
provide SGEIs
New operationaltechnologies
Opportunities
Presentation for the Committee on Transport and Tourism 13
Allowing universalservice providers toimprove efficiency
through higheroperational flexibility
Allowing universalservice providers toprice more flexibly
Putting thesustainability of the
universal serviceobligation in front of
other policyobjectives
• Compensation• Consolidation
• Price increases• Price differentiation
• Delivery speed &frequency
• Network density• Quality targets
Policy debates and responses to ensure asustainable universal service obligation
21/01/2020
3. Recommendations forEU postal policy makers
Adjust to ensuresustainability
Flexibility for MSand universal
service providers
Tame monopoly
Focus on marketfailures (if any)
Presentation for the Committee on Transport and Tourism 15
Provide flexibility to ensure that Member States candeal with different issues they are facing
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Subsidise
State Aidrules
1 32
Q&A
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