Summary
A major objective of postal reforms in Europe, and efforts for liberalization and privatization, was to improve the productive efficiency of the formerly loss-making postal administrations. Increasing competition and volume decline in the letter mail segment further push postal operators to reduce their costs and improve their operational efficiency. Against this background, the study analyses the relative efficiency and productivity developments of eight European postal operators: Deutsche Post, La Poste, Austrian Post, Post Danmark, Posten Sweden, PostNL, Royal Mail und Swiss Post.
First, the study discusses efficiency improvements based on a quantitative approach which ranks the companies in relation to their relative productive efficiency. Second, following a qualitative approach, we describe and discuss modernization programs and technological developments in mail operations.
The available data do not allow to produce sufficiently reliable quantitative results on efficiency rankings of the postal operators. Efficiency rankings of postal operators differ substantially depending on the empirical method and the selected output factor. Overall, efficiency rankings substantially correlate with volume developments, i.e. operators with higher mail volumes appear more efficient. However, the results suggest that PostNL is more successful in adjusting its input factors to volume decline than other operators, and La Poste less so.
The qualitative analysis shows that postal operators implemented several modernization programs to improve productivity and efficiency of their operations during the last two decades. The transformation of postal operations broadly followed a common pattern but with differences in timing and scope of modernization. Deutsche Post, Post Danmark, Posten and PostNL started early and are most advanced in streamlining their operations today. In contrast, the restructuring processes at Österreichische Post, La Poste, Royal Mali and Swiss Post are less advanced, and there is still more potential for efficiency improvements.
In comparison to the other postal operators, Deutsche Post shows a high level of productive efficiency. Deutsche Post had started early to modernize and streamline the postal infrastructure and invested substantially in new sorting technology in the last years. In addition, Deutsche Post faces only a moderate decline in mail volume which positively affects the degree of capacity utilization and productivity of its operations.
Discussion Paper is available for download.
