Table of Contents

Reforming the Postal Sector in the Face of Electronic Competition

Reforming the Postal Sector in the Face of Electronic Competition

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

In our increasingly technology-focused world, demand for traditional postal services is steadily shrinking. This timely volume examines the many challenges that the worldwide postal sector is facing as a result of growing electronic competition, and offers expert recommendations for reshaping postal structures to strengthen their competitiveness in an electronic age.

Chapter 22: Economic regulation and the UK postal sector, 2000–2011

Tim Wash

Subjects: economics and finance, public sector economics

Extract

In 1990, Royal Mail delivered 58 million letters each day and returned a profit of £30 million on a total letters’ turnover of £3.6 billion. By 2010, Royal Mail were delivering 71 million items per day but reported a loss of £333 million on a turnover of £6.6 billion. When the first Rutgers postal economics conference was opened at Rugby in 1990 by its former chairman, Sir Ron Dearing, Royal Mail was recognizably a leader in the postal world. Yet by the mid-2000s, Royal Mail was described by its then chairman as ‘a basket case’ (Leighton, 2011: 5). This chapter reviews the experience of independent postal regulation in the UK and evaluates the decisions of the Postal Services Commission (Postcomm) in respect of liberalization, downstream access and price control. It assesses the economic merits of the regulatory disputes that developed between Royal Mail and Postcomm over the 2000s, in the context of business performance and the broader governance design.

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