Discussion Papers

Hilke Smit

Reform des UPU-Endvergütungssystems in sich wandelnden Postmärkten
Nr. 238 / Juni 2002

Summary

In order to provide international postal services due to the existence of geographically limited areas of activities of postal operators it is necessary for postal service operators to co-operate with each other. The organisation of such a co-operative network needs a legal founding. Here the question how to organise the payment of the international cooperation is of special importance. The problems of handling many individual bilateral contractual arrangements concerning the remuneration of international services lead to efforts within the Universal Postal Union to create a terminal dues system to be applied by all countries. The major problems in creating such a system were and still are the diverging interests of the member countries. The present discussion paper analyses the development of the terminal dues system over time up to the present efforts to implement a cost oriented terminal dues system.

An inefficient design of the terminal dues system leads to several economic distortions and economically unintended incentives that hinder the functioning of the international postal service. Among these distortions and unintended incentives are distortions of the postal price structure in and between the countries as well as of the allocation of postalmail streams and the resulting development of remailing of postal items. Furthermore, an inefficient design of the terminal dues systems prevents an efficient international work sharing and incentives for the postal service providers to ensure a high quality international postal service. The changing situation on the postal markets especially goes along with an increasing market access of private postal operators. The implementation of a terminal dues system that only applies to UPU postal service providers discriminates against these service providers and distorts the competitive situation among the competitors.

The development of the UPU terminal dues system is analysed within this discussion paper with a focus on the capability of the system to solve the above described problems. Over the time slow but constant improvement of the UPU terminal dues system can be observed. However, distortions will remain as long as the UPU does not succeed to implement a cost oriented terminal dues system with differentiated terminal dues for each country according to its specific situation. The actually developed terminal dues system in this respect can only be considered as a first step in this direction. Finally it is discussed in this paper whether international co-operative postal services should be fully integrated via direct access into the national access regime on a cost oriented basis in order to create a non-discriminative situation for all postal service providers. Such a system could be controlled via the price regulation of the national regulatory authorities to prevent an abuse of market power of the postal service providers. [full version only available in German]

Diskussion Paper is available for download.

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