Postal Services
SIC 4311
NAICS 4911
The world's postal and package delivery services are performed primarily by government agencies, although increasingly, private sector corporations, sometimes categorized as courier services, perform similar services. See also Trucking and Courier Services.
The global postal services industry is one of the largest international networks in the world. According to the Universal Postal Union (UPU), by 2003, 96 percent of the world had postal service. Organizations with postal services operations—typically governmental bodies, but increasingly, non-public entities—handle billions of mailing items, including letters, packages, bills, and advertising, throughout the world each year. According to the United Postal Union, in 2004 the industry employed five million people worldwide and handled more than 436 billion letters and parcels each day.
The level of mail volume tends to correlate directly with the overall level of economic activity in a country. Accordingly, a surge in growth within the postal services industry, especially in international mailing, has accompanied the increasing globalization of commerce. Many postal organizations have invested heavily to establish global infrastructures. Moreover, the concentration of this market sector has been opening up. While industrialized countries still lead this industry, developing countries such as China, India, and Brazil were increasing substantially in the mid-2000s.
Postal services in advanced nations face substantial challenges from competing technologies. Fax machines, electronic mail and messaging systems, electronic funds transfers, Internet-based services and electronic commerce, which reached a value of US$20 million in 2003, and other communications technologies have sliced into traditional postal business. In many regions, these technologies are in their infancy but guarantee increased competition in the near future. Stamps.com, for example, had more than 314,000 subscribers by the end of 2003, and 80 percent of revenues for the industry segment. Industry analysts and leaders agree that the future of postal services depends greatly on the rapid and efficient implementation of new technologies. Consequently, most of the world's advanced postal businesses are significantly revamping their organizations and expanding their research and development efforts to accommodate electronic correspondence and transactions.
Postal facilities range from enormous processing centers that handle several million items a day and employ thousands of people to small kiosks with one part-time employee. The efficient management of postal operations in countries such as the United States and Germany requires the organization of large transport fleets, extensive property management, the supervision of hundreds of thousands of employees, and the implementation and maintenance of advanced information technologies.
Some governmental postal organizations, like the United States Postal Service (USPS), are required by law to break even financially and thus use their "profits" as an impetus to implement new technologies and improve overall service. Typical measurements used to determine a postal administration's service level include the percentage of on-time deliveries, customer surveys, and the balance sheet. Because labor and transportation expenses constitute the bulk of a postal operation's operating costs, the search for labor-cutting technologies and efficiency management has been among the top priorities of postal service companies and agencies worldwide.
Postal delivery services feature three basic components: letters, parcels, and express. Letters are distinguished from parcels either by weight or by contents (documents versus goods, respectively). Express service includes both letters and parcels and is characterized by speed of delivery. Postal administrators generally have a monopoly on letter services, while parcel and express services are offered in competition with private carriers. The production process for postal services can be divided into five stages: collection, sorting for destinations, transportation, final sorting, and delivery of mail.
Postal administrators also offer financial services, which can be categorized as postal payment, such as money orders and postal orders; girobank ,including mortgage and foreign currency; savings bank; and other payments such as pensions, welfare services, licenses, and taxation. In some cases, postal administrators historically also have had authority over the telecommunications sector in their nations, but many industrialized countries were reorganizing their telecommunications services into separate entities.
An enterprise as important and complex as the exchange of international mail requires a broad framework of rules and regulations among nations. In the mid-nineteenth century, most large European countries signed at least a dozen individual treaties for foreign mail. Given different currencies and units of measurement, these agreements required detailed accounts that were extraordinarily elaborate and perplexing. Indeed, at one point there were more than 1,200 different postal rates in effect in Europe.
In 1863 a conference held in Paris to standardize those agreements was attended by 15 European and American postal administrations. However, it became obvious that bilateral treaties between individual countries would not work and that a single treaty governing the international post was needed. In 1874 the representatives of 22 postal administrations met in Switzerland and signed the Treaty of Berne. Initially known as the General Postal Union, this international collaboration was renamed the Universal Postal Union (UPU) in 1878. It has retained this name into the twenty-first century.
In 2005, some 190 nations belonged to the UPU, which on July 1, 1948 became a specialized agency of the newly established United Nations. Any UN member state can belong to the UPU, which is funded through member contributions according to a variegated rate scale. Other sovereign states not belonging to the United Nations can join the UPU if at least two-thirds of the UPU member states assent. The UPU works together with other UN agencies and international organizations in order to carry out its objectives. Governed by the Universal Postal Congress, which performs legislative functions, and by two councils, the Postal Operations Council and the Council of Administration, the UPU set a strategic plan for 2000 to 2004. Approved by the Universal Postal Congress and known as the Beijing Postal Strategy, the plan's main objectives, in summary form, were:
•To ensure customers' global postal access for goods and messages;
•To make delivery services more reliable, secure, and efficient;
•To become more cost effective;
•To respond better to postal customers;
•To integrate technological, regulatory, and economic changes by reforming and developing postal services; and,
•To increase collaboration among postal stakeholders.
In 2005 the countries of the UPU had more than 700,000 postal outlets and collectively delivered 430 billion mail items per year.
About two-thirds of national post offices worldwide also offered financial services, with 60 offering savings bank options in 2002. The UPU has a formal agreement to cooperate with the World Savings Bank Institute (WSBI). In situations where natural catastrophes or armed conflict have disrupted normal social life—including regular mail delivery services—the UPU assists by setting up humanitarian services and short-term arrangements to reconnect broken postal links.
In accordance with its mandate, the UPU was to create a single domain for exchanging postal items and for unobstructed freedom of transit within that domain. Each UPU member country has pledged to respect the inviolability of mail in transit and to convey it by the most rapid means of transport used for its own domestic mail delivery. UPU rules govern weight specifications, size limits, and conditions of acceptance for international mail. Historically, the UPU also standardized the basic rates that member countries could charge for delivering postal items within the union's territory. In recent years, however, its stated rates have been used as guidelines rather than fixed rules, and postal administrators have had more freedom to set rates for international mail.
The UPU also provides technical assistance for the modernization of postal administrations, especially those in the least developed nations. Aid includes recruiting and dispatching experts, granting vocational fellowships, and setting up national training schools for postal workers and management. Funding comes from both the UPU budget and the contributions of developed nations. The UPU has also promoted stamp collecting through the promulgation of a code of ethics and various other activities, including philatelic studies and the dispatch of stamp experts to postal...
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