Since the early 1990s, European countries have been undergoing an intensified process of liberalizing the postal services sector. This involves, among other things, limiting the monopoly of public postal operators and gradually opening the postal market to private companies. Thanks to liberalization, it is possible for individual public operators from one EU country to enter the markets of other member states. This freedom should lead to a proportional increase in competition. However, this is not the case, as confirmed by current market research. The share of alternative operators in the addressed mail market is still small and does not exceed 11%. Even in countries with markets fully open to competition, the share is as follows: in Finland – 0.5-1%, in Sweden – 7%, in Estonia – 5-6%, in Slovakia and Hungary – 0%, and in other countries 4-5%.
The process of liberalizing the postal services market is also taking place in Poland. It began in 1995 after the amendment of the Telecommunications Act, when the state operator’s monopoly on letter mail was limited to 2,000 g. Subsequently, the Act of June 12, 2003, the Postal Law, continued the process of liberalizing the postal market, reducing the reserved area to 350 g. At the beginning of 2006, the limit of the reserved area was lowered to 50 g. Full liberalization of the postal services market in Poland and other European Union countries is expected from the beginning of 2009.
However, the gradual liberalization of the postal services market in our country is not bringing the expected results. The reduction of the reserved area for letter mail to 350 g did not cause significant changes in the entity structure of this market. Poczta Polska (PP) still maintains its position as the leading postal operator in terms of letter mail, with a small share of private operators. In 2004, private operators in Poland captured only 1% of this market. Also, the reduction of the reserved area after January 1, 2006, for shipments weighing up to 50 g and two and a half times the price for the service provided in the public postal system for the fastest category did not limit the monopoly, as about 90% of this market still remains beyond the reach of private companies. In EU countries, only 9% of sent letters weigh more than 50 g. –
It is worth adding that the segment of shipments between 50 g and 350 g has always been handled by alternative operators, but while maintaining the price limit of the reserved area for PP. However, these shipments did not constitute a significant volume of transported mail, because they were sent only by senders interested in express services. After January 1, 2006, we did not notice any significant changes in this regard
– believes Krzysztof Zdziarski, General Director of UPS Polska.
Effects of full liberalization
Among market analysts, there is no consensus on the extent to which changes in the field of mail, consisting of the complete limitation of the PP monopoly, will have consequences for the postal services market. Experts from the National Institute of Telecommunications, in their study titled “The impact of the liberalization of the postal services market on the quality and availability of services and on the price level in Poland,” speculate that the activity of already operating postal operators, companies from the publishing or transport sectors providing postal services, will increase. The entry of foreign public postal operators into a given postal market is less likely, although some public operators are already operating in foreign markets, but mainly where they have been liberalized or the liberalization process is significantly advanced.
It is predicted that only after the full opening of postal markets will the number of competing operators increase. However, it is not expected that they will appear in parallel with the already operating operator. –
New players will need time and resources to enter the market. And the size of our country implies the need for significant investments in the network and infrastructure, and this may be an important barrier for companies that do not conduct business related to postal services
– notes Rafał Dziura, Marketing and Sales Director at TNT Express Poland. This is primarily related to the level of operating costs and the need to have a sufficiently fragmented network of branches. –
One should also remember that new technologies and changes in the law are reducing the volumes of traditional mail, as a result of which the potential return on investment may not be as satisfactory as it was a few years ago
– adds R. Dziura.
Experts from the National Institute of Telecommunications also assume that courier companies will expand their service offerings. These, however, claim that postal services, including universal ones, are not in their area of interest. –
The main activity of Masterlink is parcel transport. Only a small share of the company’s turnover consists of light shipments, which are most often shipments with a guaranteed delivery time. Masterlink’s strategy will also not change in 2009, which means that the letter mail market will still not be an area of interest for our company
– emphasizes Rafał Nawłoka, General Director and President of the Management Board of Masterlink Express.
Greater opportunities are seen in smaller companies (mainly local operators) that serve service niches. They can try their luck in areas such as delivering heavy documents, exchanging documents (primarily in the B2B segment – business clients), and delivering shipments on the same day within the city. Outlining the future of the postal market is difficult because the abolition of the state monopoly depends on political decisions. –
As the past has shown in the scope of liberalizing postal services in the European Union, this can lead to significant delays and disruptions in the operation of this sector. GLS Poland will only be truly active in the field of letter mail when this market is fully liberalized. Delivering letters is a mass activity. Building a low-cost system with a network covering the entire country will only be profitable and promising a return on investment if the market is fully and unrestrictedly liberalized
– says Rico Back, Chief Executive Officer, GLS B.V.
The article comes from the magazine “Logistyka”, No. 3/2006.