The new postal sector: Why "snail mail" still matters

How did this copy of World of Work reach you? If it's a printed copy, the answer is likely to be simple - through the postal services. Despite today's high-speed electronic mail, so-called "snail mail" still reaches an enormous number of people and provides some five million jobs worldwide. This article explains why the post still matters.

LONDON - Changes in today's postal sector are literally snail-like when compared to the lightning-fast developments buffeting its old twin, telecommunications. But though slow, the more earthbound mail has itself seen a period of unprecedented change:

  • Japan's postal service has just completed a process of "corporatization", launching a new Public Postal Corporation last year and facing competition for the first time
  • In the European Union, national postal operators will face competition in 2006, for everything except the most basic letter services
  • In the United States, the US Postal Service - the largest in the world - is being scrutinized by a Presidential Commission
  • In many developing countries, postal services have been subjected to reform programmes

Meanwhile, a small group of powerful multinational operators is emerging, led by the partially privatized Deutsche Post World Net and the Netherlands' TPG, and commercial courier companies, FedEx and UPS. The development of Deutsche Post World Net and TPG from their roots as national postal operators, shows how traditional letter and parcel businesses are converging with courier services into a single sector, ushering in an important new area of logistics.

Deutsche Post World Net's most high-profile acquisition has been DHL Worldwide Express, the large US-based courier company, but the company has also acquired a string of other companies, including GlobalMail, Airborne, YellowStone, Danzas and Securicor. TPG has successfully diversified away from an over-reliance on its relatively small home market to the extent that it now employs 150,000 people in 62 countries. Among other interests, TPG owns TNT, the worldwide courier business.

Changes in the UPU

Not surprisingly, the venerable UN body, which for generations has overseen the international postal service, is reflecting these changes. The Universal Postal Union holds its world congresses only every five years, and this year's event in Bucharest is likely to be something of a watershed. The UPU - originally organized to link member governments and national post offices - is developing new structures allowing others to play a greater role in its deliberations. As well as a body for national postal operators, the UPU is also expected to agree to establish a consultative committee to provide a forum for governments, postal operators (including private postal operators' associations) and other stakeholders. Union Network International (UNI), the global union representing the postal sector, is also expected to be given a role.

For John Pedersen, the head of UNI's postal sector, the aim is to help develop social partnership arrangements in a rapidly globalizing industry.

He points to the recent agreement made by Deutsche Post World Net to establish a Works Council as a useful step forward, and says that he will now be working to bring about the first multinational framework agreements in the sector. UNI has already established a virtual network of representatives working for one major operator, and others are being prioritized. UNI (through UNI-Europa Post) already engages in formalized social dialogue within the European Union, with the employers' body, PostEurop.

At the same time, a number of major multinationals are taking steps towards demonstrating a commitment to corporate social responsibility. The chief executives of seven firms, among them DHL, TPG and Swiss Post, put their names to a joint statement of "Principles of Corporate Citizenship", presented to this year's World Economic Forum, in Davos. The statement contains eight principles, covering governance, financial responsibility, stakeholder engagement, employee relations, human rights, community investment, customer and supplier relations, and environmental sustainability (see box).

The ILO role

The ILO has been working to develop appropriate tripartite responses to developments in the postal sector. As well as an international conference held under the Sectoral Activities Programme in 2002, the ILO has also been hosting (in partnership with the UPU) a series of regional workshops, commencing in 2000 for the Asia Pacific region, and continuing with meetings in Latin America and in the Caribbean last year. Plans are now underway for the African region to be covered next year.

From the union side, there remains a strong concern that an emphasis on commercialization in the post will damage the interests of both postal employees and, more generally, of communities. UNI Postal Sector World Conference, held at the ILO in Geneva last November, called for the concept of the Universal Postal Service to be defended and for further liberalization of the post to be carefully controlled.

John Pedersen now calls on the European Union to think again before further liberalizing the post in EU countries. "What we have said is that, before taking another step, the effect with regard to employment and the universal postal service should be properly assessed," he says. He adds that postal services should be excluded from further GATS negotiations.

Controversy remains over postal reform programmes in developing countries. A 1996 World Bank report argued that the postal service was "one of the last bastions of the old order", and the Bank subsequently helped initiate market liberalization activities in more than 30 countries worldwide, with major operations in, for example, Algeria, Honduras, Jordan and Morocco. More recently, the Bank's tone has changed. In a joint report with the UPU, it now argues that market liberalization should be a gradual process, and stresses the importance of defining universal service obligations.

Changes in the postal sector, if less high-profile than transformations in telecommunications, will certainly remain on the international agenda for the foreseeable future. But the World Bank/UPU report warns against a simplistic approach. "There is no single path to postal reform," it states. "Specific economic conditions, traditions of corporate governance, and evolving market needs all require unique strategies and customized solutions."

The "Principles of Corporate Citizenship", presented to the 2004 World Economic Forum, has been signed by the CEOs of DHL, TPG, Transnet Ltd, Exel, Ferrovie dello Stato SpA, Swiss Post and Stena. The statement calls for "social justice in the workplace", and includes the following pledges:

"We are committed to providing healthy, safe and decent working conditions for all of our employees, and expect our suppliers to do the same. We actively encourage diversity and opportunity. We also respect the rights of employees to join lawful trade unions or to form workers' associations. We respect the right to collective bargaining. As a minimum, we will fully comply with all relevant national laws and regulations with regard to working hours and conditions, rates of pay and terms of employment. We provide training to our employees on how to manage challenges arising from the implementation of these Principles."