№4(15)(2013)

RESULTS OF THE XXV CONGRESS OF THE UPU: "ROAD MAP" FOR POSTAL SERVICES IN 2013-2016

During Doha Congress of the Universal Postal Union, which was held in Qatar from September 24 to October 15, 2012, a large number of documents were adopted to determine activity of world postal community in the coming years. Most of them were discussed at meetings of nine commissions.

Commission 1 "Checking powers" and Commission 9 "Editorial" are highly specialized. Competence of Commission 2 "Finance" are questions of UPU budget, voluntary contributions from member countries, cost of off-budget activities and considering financial implications of proposals put forward for consideration by Congress. Let’s put more focus on the work of other committees.

Commission 3 "General Issues and structure of the Union"

Commission dealt with fundamental questions of the UPU, general policy of the Union, its structure and reform. Decisions adopted by other committees were significantly dependent from its findings.

In particular, the Commission adopted proposals concerning: appointment of operators responsible for providing postal services and obligations arising from the Acts of joining the UPU (Article 2 of the Convention), local exchange abroad and international mail processing centers, improving transparency and information openness of parties responsible for international mail processing centers, access to external entities of postal sector, expanded products and services to the UPU, development of regional activities with support of regional alliances, arbitration procedure designed for operators, further reform of the UPU and others.

Commission 4 "Convention: legal regulation"

Proposals were considered to be of particular importance for the future of postal sector. Thus, ensuing lively discussion about the most definitions and postal parcels, and therefore the Commission has decided to send suggestions for further study to the Postal Operations Council.

Commission adopted proposals for service to return goods as an additional service of UPU, a number of provisions relating to postal rates and exemption from taxes, as well as responsibility of designated operators in compensation not only of material but also moral damages.

Among other decisions approved by the Commission were stated: forwarding complaints with registered letters, termination of services controlled delivery, change order for processing incoming registered non-priority items (such as priority). A number of proposals on postal security of shipping radioactive, infectious substances and lithium batteries, possibility of transfer of live animals in accordance with postal regulations of national legislation of concerned countries and more.

Commission 5 "Convention: Economic Issues»

The main attention was paid to issue of a new commission of final cost, including issues of transition for many of its members. Modified classification of end-costs (changes were made including in Ukraine), expanded use of additional fees for registered items and insured items which do not have an identifier standard S10 with a barcode on a finite system, a series of improved formulations of particle tariffs, simplify calculations and system of sanctions for failure to pay a debt and so on.

Commission 6 "Postal Payment Services"

Agreement on postal payment services in UPU has existed since 1878. Nowadays relevance of remittance services has only increased due to the global processes of migration. Remittances, as has been emphasized at the congress, play an important role in achieving the UN Millennium Development Goals - reducing poverty.

At meetings of the Commission a number of proposals for changes Agreement postal payment services in 2008 were adopted. By the way, a large number of proposals were prepared in Ukraine, and most of them have been approved. Strategic activity on development in the field of postal and financial services for 2013-2016 was presented. Among other, it is based on diversification of technologies used to provide postal payment services (mobile telephony, creating strategic partnerships, financial accessibility).

In discussing the strategy of postal financial services they mentioned four topics:

- Technological neutrality - opening of the World e-mailing payment network UPU (WEPPN) for other networks;

- Facilitate access to WEPPN for all citizens and migrants;

- Postal and financial services - added value for development of e-commerce;

- New services and products that are to be offered by designated operators.

Commission 7 "Postage markets and products"

Complex issues dealt with such areas as development of postal markets; postage economy, promoting world trade - unleashing potential of postal sector to participate in world trade of micro, small and medium business, direct mail, direct marketing and postal markets, development of philately, letter postage, parcels, innovations in mail and e-services, quality of service, quality management certification by UPU, improving supply chain, issues of mail transportation; protecting postal revenues; issues of email security in relationship with customs, activities of EMS services and Telematic cooperative.

In his speech, current at that time Secretary General of the UPU International Bureau Edward Dayan said that these issues are of strategic importance for the future of assigned operators. He identified five key findings of results of commission in the past cycle, concerning:

1) Development of cooperative model and budget structures that have worked for a number of years and will make it possible to manage other activities and their development;

2) integrated approach to international supply chain;

3) role of postal services and markets they serve;

4) important component of e-mail for the Postal Operations Council;

5) UPU should provide a comprehensive response to challenges facing the postal sector, as an organization that has all means for this.

Commission 8 "Promoting development"

The meeting was presented "Policy on promotion for 2013-2016 years". The paper explains that cooperation is a valuable tool to assist developing countries in adapting and solving issues in a new environment of postal sector.

The basis of strategy is to promote the next cycle laid in following areas of work such as:

- A regional approach;

- Reform of postal sector continues to be a priority;

- UPU methods in comprehensive area of reform and address will be kept as a priority means of assistance in implementation of structural reforms in the sector nationwide, in which government is the main driver of reform;

- Continued implementation of programs of targeted technical assistance;

- Strengthening the UPU strategy in learning through exchange of experiences and best practices necessary to implement projects and development strategies;

- Strengthening existing partnerships and developing new in order to strengthen coordination of joint actions, with regional alliances within regional approach;

- Introduction of techniques to provide urgent assistance will help effectively support countries in emergency situations or during natural disasters.

The work of the Foundation to improve quality of service in the previous period was also considered and decided that the Fund should continue its work (it will be improved) in 2020.

On material of edition

"Postal service. Technique and technology".

№11, 2012

RESULTS OF THE XXV UPU CONGRESS: DEVELOPMENT OF DIRECT MAIL, DIRECT MARKETING AND MAILING MARKETS

Over the past few years, postal flows have changed significant, in many regions of the world decline in sending letter-post items is a reality. According to many postal services in the world, the answer to this should be development of direct marketing services.

One of the factors behind decline in physical correspondence was financial and economic crisis of 2008-2009, which resulted in fact that gradually other means of communication were used rather then direct mail. This trend has deepened the availability of other electronic means (Internet, email, social networks).

Several studies, including on market of letters, parcels and light weight items EMS, which were carried out on initiative of the Commission 1 of Postal Operations Council (POC) shows that direct mail still provides excellent opportunities for postal services in developing countries and industrialized countries, and scope of this particular segment of post, possibly, shall revive.

However, according to current trends, for direct mail the marketing campaigns are increasingly teaming up with other means of communication, including electronic. They may not be part of postal infrastructure, but in current environment there is almost no advertising in mail that would not be linked or combined with other means of direct marketing.

Report of the Advisory Council on direct mail (hereinafter - ACDM) in 2011 indicated that direct mail is no longer the only means to purchase, sales and customer service and is part of a broader and integrated multi-channel campaigns. Direct mail leads to use of other media and digital tools allowing providing data and analytics for individual customers and addresses, which enables more targeted and effective direct mail campaigns.

For physical direct mail in the face of multi-channel communications present there are different opportunities.

For example, a recent study by Swiss Post found that despite new information means physical letters have favorable prospects - 76% of people in the country still prefer paper bills, population would receive business correspondence in paper form. Most respondents indicated that they most likely will not open email sent with promotional material. Moreover, 97% of surveyed companies send their mail correspondence physically, and 62% believe that customers read more physical mails, rather than e-mail.

A similar informal research of Pitney Bowes (USA) firm showed that most Americans prefer physical mail: 66% wish to receive catalogs, 61% - bills, and 59% - financial and banking documents on paper.

Findings of study "The French and direct mail", which was held in France in 2011, stated that 97% of respondents will look through mail advertising, re-look - 83%, save - 78%. In addition, 63% of advertisements are received by mail, to make purchases in retail stores, and 49% read them to get more information online.

Most of these studies are generally performed in industrialized countries. However, there is evidence pointing to importance of direct mail and direct marketing in developing countries: during 2000-2009 market of Direct Marketing in Brazil grew by an average of 12.5% ​​per year and directly created 1.2 million jobs. Over the next five years, company is forecasted of an additional annual growth of 16.4%.

What postal officers offer to customers?

Results of research on market of letters, parcels and light weight items EMS, initiated by the Commission 1 POC, are indicating growth opportunities for direct mail, while warning of the need for introduction of products and services that meet or exceed customer’s expectations.

Research of ACDM on products and direct mail services that announced 166 surveyed designated operators have shown that:

- 75% of designated operators offering targeted direct mail products;

- 77% - without address direct mail products;

- 42% - consulting services for direct mail;

- 23% - service on design and drafting announcements;

- 58% - mail preparation services (places of mailing and/or printing);

- 53% - some system of change of address;

- 72% - price concessions;

- 36% - product of response organization;

- 30% - Service of orders (fulfillment);

- 40% - service on non-handed in or returning items;

- 29% - clients engaged in learning methods of direct mail;

- 81% - delivering direct mail (address or non-address) in mailboxes;

- 69% - direct mail delivered directly to recipient's home or business address;

- 62% - to simplify the answers allowing clients include card/envelope for reply;

- 11% - provide telemarketing services controlled by postal service;

- 29% - have a center of direct mail (direct mail);

- 46% - special branches/departments of advertising messages;

- 43% - special Web sites with information about direct mail;

- 59% - assessment of possibilities for direct mail.

Other Direct Marketing Services provided by designated operators of UPU are systematically studied. At the same time the paper "Evaluation of postal e-services: Perspectives of sector" submitted to the Postal Operations Group "Electronic Services" in 2011 states that:

- Now worldwide they offer 55 different types of e-mail services such as e-post (communication services provided with using information and communication technologies (ICT), e-finance (financial services using ICT offered by postal operators to end customers), e-commerce (buying and selling products and services using ICT, including handling and shipping purchased goods to individuals or electronically), e-government (public services in electronic form);

- From 93 countries who sent responses more than 20 offer email inboxes, around 10% - direct mail online, almost 35% - hybrid mail services (electronic and physical), 20% - hybrid mail services (physical - electronic), 8% - a service that enables customers to inspect contents of their physical mailboxes by electronic means;

- Postal e-services develop in world, while there remains a gap between industrialized countries and those developing countries;

- Index of using postal e-services shows that not all developing countries lagging behind in development of this type of service;

- Innovative potential, but not wealth has an enormous influence on development of postal e-services.

On the other hand, evidence is present that certain designated operators are beginning to provide and other direct marketing services in addition to direct mail. This is possible mainly through creation of special departments dealing with digital channels, or through mergers of affiliated companies specializing in direct marketing.

Impact on the economy

From its establishing, the postal service was an important channel of communication and marketing. To some extent, postal services have positioned itself as media-provider or media-channel for physical delivery of direct mail advertising (direct mail). This, together with the work of ACDM helped them gaining necessary knowledge and experience to provide business customers with assistance in use of physical mail channel for marketing purposes. Changes in communications over the past few years have forced postal service not only to combine physical channel with other agents, but also to determine its own position as a major provider of direct marketing.

Converting postal services to providers of direct marketing is important for their survival in the future and will be used as a strategy of innovation and diversification, as well as helping to position themselves as key market participants. Traditional channels of physical mail retain their value, but appropriate services must consider a more extensive communications infrastructure.

In addition, increased participation in direct marketing at national and international levels promotes other traditional postal products and services (including value added), including letters, parcels, logistics and financial services. Development of infrastructure and direct marketing in any country is benefiting the overall economy and contributes to national and international exchange.

Thus, improving channels of direct marketing and direct mail marketing is a determining factor of development and survival of the postal market.

Direct Marketing Strategies in Doha strategy

Designed operators in developed and developing countries, as well as sector members have a number of common goals. They have a variety of defined interests, and it is in this area the UPU may be useful. Consequently, the UPU participation in development of markets and infrastructures of direct marketing is essential, because it shares the concept that postal sector is an integral component of the world economy.

Experience of ACDM the last 17 years with regard to its structure, funding mechanisms and activities in the area of development has been extremely positive. ACDM activity, within which there are 47 members (33 post and 14 non-post) was more or less useful to all members of the UPU. Therefore, the UPU must continue participating in these activities through expansion of ACDM to a wider market of direct advertising.

The new cycle of ACDM new mission is: "To promote development of direct marketing with email services, positioning of designated operators as the main channels of direct marketing and promoting economic and market expansion through accumulation of knowledge about markets and experience in this area at all levels". This issue of ACDM is directly related to the mission and goals of UPU, namely stable development of postal services.

To work plans of ACDM will be included specific activities to achieve the above objectives, to:

- Increase the amount of advertising mail in the world;

- Build capacity and expand knowledge and experience of Member States in this area in interests of meeting needs of clients in marketing and create demand for products and services of direct marketing;

- Provide information on direct marketing and markets;

- Cooperate effectively with industry, industry associations, postal unions, interested in development and improvement of postal direct marketing channel in the world;

- Increase share associated with direct marketing products and services of designated operators, including direct mail.

On material of edition

"Postal service. Technique and technology".

№11, 2012

Kenya’s diplomatic choice for the UPU

Ambassador Bishar A Hussein, the next UPU director general and former Kenyan postmaster general, discusses his priorities for the global postal sector.

One of the tasks for delegates at the 25th Congress of the Universal Postal Union in Doha, Qatar, has been to choose a new leadership team for the UPU’s International Bureau. After eight years in charge, UPU director general Edouard Dayan and deputy director general Guozhong Huang have reached their term limit. Kenya’s Ambassador Bishar A. Hussein was selected as the next UPU director general on 10th October, running against Uruguay’s Dr. Serrana Bassini Casco.

Postal and diplomatic experience

A graduate of the University of Nairobi, Ambassador Bishar A. Hussein joined the Kenya Posts & Telecommunications Corporation in 1984 before rising through the ranks. In 1999 as the company became the Postal Corporation of Kenya, he became its first Postmaster General.

From 2002, Hussein served for six years as his country’s ambassador to the United Arab Emirates, helping strengthen the political and commercial ties between Kenya and the Gulf States.

Hussein tells Post&Parcel that this blend of sound postal knowledge and diplomatic skills are “crucial” for the efficient management of the International Bureau of the UPU.

“I have acquired a wealth of knowledge in my 28 years of postal and diplomatic duties that is suited to the nature of work and the UPU environment,” he says, noting the experience he has had both within Kenya and inside the UPU itself.

Most recently, Hussein has been working within the UPU itself. A past vice-chair of the UPU’s Postal Operations Council, since 2009 he has been chairman of the organization’s Council of Administration.

He was also chairman of the UPU’s last Congress, four years ago in Geneva, and chaired the UPU’s Strategy Conference in Nairobi in September 2010.

The role of the UPU in the world

Commenting on the work of the UPU itself, Hussein says he believes the organisation needs to enhance the decision-making capabilities of its permanent bodies, to respond to the “fast-changing” communications environment of today.

He says postal operators themselves are fully aware of the operational and technical challenges they face and the measures needed to overcome them, but emphasizes the UPU’s role in bringing together its members to help them develop the right strategies.

“The UPU plays a crucial role in this regard considering it is the point at which all operators big and small are represented at the decision-making point on matters relating to development strategies that aim at making the post the market leader and preferred choice of communication,” says Hussein.

As well as providing the platform for the exchange of information on technological developments, the former Kenya Postmaster General says the UPU could offer professional and technical support to member countries to help enhance the quality of their postal products and services, particularly providing assistance in areas like new technologies.

“Innovation, diversification and adoption of new technologies are crucial to supplement the traditional postal business,” he says, highlighting the need for posts to develop the capacities to respond effectively to the rapidly shifting needs of the market.

A good example is the UPU’s existing work in the field of digital communications, which Hussein says is high on the agenda at the moment for the UPU’s various technical cooperation programmes.

But he says: “There is, however, a need to address the peculiarities in each region so that appropriate and affordable technologies are also available to the small and developing countries to enable them to join the digital platform.”

Ecommerce

With ecommerce perhaps the biggest growth drivers for posts at the moment, Hussein says it is another area where the UPU must look to provide support for its members, encouraging them to take full advantage of the huge shift in consumers towards retail options based on home delivery.

“Internet communication and growth of e-commerce has led to increased postal parcels and express mail traffic worldwide,” he says, and lays out a number of areas where UPU can help:

“UPU champions the improvement of the quality of international mail, Express and Parcel services through automation, pre-shipment advices, continuous monitoring of the national postal networks and the engagement of the various stakeholders like customs, security agencies, civil aviations and airlines.”

The Kenyan candidate says it must be a “continuous pursuit” of UPU to work with organisations within the cross-border chain that are crucial to the success of ecommerce, to harmonize postal operations and regulations at all levels.

Supporting the USO

With many postal markets around the world at the moment characterised by market liberalisation and increasing competition, and almost all facing the problem of declining physical mail volumes, Hussein says the job of the national postal regulators continues to be an important one.

He says for regulators one of the major challenges is the balance between the commercial sustainability of the posts they regulate and the affordability of universal postal services for citizens.

As regulators look to promote “viable and vibrant” postal sectors, Hussein warns that thought needs to go into how exactly universal postal service obligations are funded.

“Governments and the National Postal Regulators while opening the postal sector should also put in place some mechanisms to compensate the Designated Operators for the losses they sustain in providing Universal Service in less productive or lucrative areas,” he says.

“Regulators should therefore consider the establishment of Universal Service Funds to compensate the Designated Operators.”

Social development

The important role of Posts as drivers for social change in their respective countries is also a key part of the Doha Postal Strategy being discussed at the UPU Congress this month.

Whoever wins the election on 10th October, the next UPU director general will come from a developing world country, bringing with them a different perspective than the outgoing Edouard Dayan.

Hussein says Posts have always been a force for social good – and should remain so – championing sustainable development.

He says that UPU must particularly support the development of postal communications in emerging economies, and pledges that the organisation will “engage postal executives, governments, regulatory authorities and Restricted Unions to undertake or enhance postal sector reforms in its member countries, and provide all necessary technical and professional support.”

In whichever sphere of the world they are in, Hussein emphasizes the platform that Posts provide in offering affordable and accessible communication solutions to all citizens, and states that governments and businesses must also recognize the platform they have in the Post in reaching citizens and markets across the world, and make the Post “an important component of the social and economic improvement of the citizens of the world”.

One of the interesting projects being discussed at the Doha Congress is an initiative called “Addressing the World – An Address for Everyone”, which puts forward a declaration for member countries to sign on 9th October, to commit to investing in more efficient national addressing systems.

As well as improving the efficiency of mail processing, as well as postal security and reliability, the initiative aims to help turnaround the situation in which as many as four billion people in the world do not currently have an address, and do not have the ability to receive mail.

Hussein says provision of universal postal services is at the core of the UPU convention and viewed as a fundamental human right, but he adds that actual implementation of this responsibility falls to individual member countries.

He says: “The governments of the member countries together with the designated operators and the regulators in concert with the UPU have a golden opportunity to develop and implement national addressing systems that will enable every citizen to have an address and render delivery and provision of other services accurately, securely and in a timely fashion.”

Source: James Cartledge,

Post&Parcel