Blog Post by Walter Trezek – 26th UPU Congress: Mixed message to the global e-commerce community

Shares

Walter-TrezekFrom 20 September until 7 October, the 26th Universal Postal Union (UPU) Congress was held in Istanbul. Walter Trezek, Vice-Chair of the Ecommerce Europe’s e-Logistics Working Group, attended the conference on behalf of Ecommerce Europe.

The general consensus that emerged from the Congress was that e-commerce is a huge opportunity. However, it was also widely agreed that the UPU’s global postal network is not fully committed to offering its customers (senders and recipients alike) the products and services they demand. It seems that UPU member states have failed to recognize the universal service quality demanded by the e-commerce sector, and the role of e-commerce as the primary driver of global growth and interconnectivity.

Reform of the Union

The proposal by the International Bureau of the UPU to establish a single Council, rather than the current two (Council of Administrations & Postal Operations Council), did not find general consensus.

Two proposed alternatives supported the general approach towards faster decision-making processes, however, they emphasized that legislative and regulative matters should not be mixed with commercial and operational matters.

Recognising that all three proposals shared major commonalities, Congress initiated an ad hoc group although based on different organizational principles.

Congress recognized that in principle only general consensus on the reform would enable the UPU to respond to the huge challenges ahead.

Congress agreed to further study and to prepare a common position in order to reach consensus in the next 2 years, for final agreement at a mid-term Congress scheduled for 2018.

E-commerce: No general consensus, only a simple majority

No consensus was reached at the Congress on the efforts to develop new products and services over the last UPU cycle (2012 – 2016) to create an integrated product plan (IPP). The IPP would allow the UPU to respond faster to ever-changing customer demands, which are driven by e-commerce and digital communications, and would lead to a global, possibly harmonized, service quality for the delivery of commercial items.

Instead, a vote was taken and resulted in adoption of the IPP, by a very narrow margin of 62 in favor to 52 against. The associated changes to the constitution and the regulations were carried through with the same “indifferent” attitude, leading to a general definition of “postal items” and a distinction by content (documents vs. goods).

It is important to recognize that most major European member states (i.e. Germany, Austria, France, Switzerland, Italy, Spain, United Kingdom, etc.) did not support the adoption of the IPP. As the postal administrations of these member states had actually contributed actively to shaping the IPP, this voting behavior can only be understood in the context of these members having already established their own, separate “interconnected cross-border” solutions, which they have secured within the closed UPU network, or because they have already invested in competitive solutions which run parallel to the UPU network.

UPU Congress sent a mixed message to postal stakeholders. They indicated that current development might become more pronounced, leading to a situation in which the postal administrations within the UPU postal network no longer offered the best option for global delivery, but rather a default solution. At the same time, regional and global networks outside the UPU, some even involving UPU members with bilateral and multilateral agreements, and possibly working in competition with the national postal operators in their own territories, will continue to grow in importance.

Access to UPU products and services for the “wider postal stakeholders”

A large majority supported the proposal to grant access to the wider postal stakeholder community.

Congress recognized that cooperation is necessary to overcome the challenges faced by the global postal network.

This decision will lead to the development and creation of the necessary policies and regulations for granting access to the wider postal stakeholders over the next cycle (2016 – 2020), possibly with the first results being recognized and adopted at the mid-term Congress in 2018.

Rates, preferred access to customs and means of transport

A new terminal dues system (for letter post items) and Inward Land Rates (for parcel post items) were adopted. However, the basic principles were retained. In addition to the recognition by Congress that changes are necessary and faster decision making is required, an Integrated Remuneration Plan (IRP) it’s development and implementation in the coming cycle was adopted.

Major changes may take place once the adaptations relating to the IPP – the change from a silo-based postal system (letters 0 – 2 kg; parcels 0 – 30 kg) to a postal item-based system (documents vs. goods) – have been implemented after Congress. The preferred access to customs and certain means of transport will remain and be further supported by digital communications, supported and maintained by the UPU and its PTC (Postal Technology Centre).

For further information on the position of Ecommerce Europe, please download our Manifesto for a better parcel delivery market in Europe.

Walter Trezek

Vice-Chair of the e-Logistics Working Group of Ecommerce Europe

info@ecommerce-europe.eu

Shares