Advances in Regulatory Economics series
Edited by Michael A. Crew, Paul R. Kleindofer and James I. Campbell Jr
Chapter 5: Economics of Post Office Networks: Strategic Issues and the Impact on Mail Demand
5. Economics of post oﬃce networks: strategic issues and the impact on mail demand* Martin Buser,† Christian Jaag‡ and Urs Trinkner§ 1. INTRODUCTION Postal market liberalization is a current issue in Switzerland as well as in the European Union. The reserved area has been the traditional means to ﬁnance the provision of universal postal services at uniform prices. There is, therefore, a concern that further reductions in the reserved area could undermine the ability of the incumbent postal operator to ﬁnance its universal service obligation (USO). Hence, the traditional USO has come under scrutiny in many countries. The two most important cost factors in the postal sector related to the USO are ubiquity of delivery at a uniform price and a network of post oﬃces that is suﬃcient to enable accessibility to postal services for all citizens. In our chapter, we discuss the role of the post oﬃce in the marketplace. It not only adds to the incumbent’s cost, but also serves as its important and traditionally established hallmark. Hence, the optimization of the postal outlet network is of signiﬁcant strategic and political importance. While some post oﬃces may be converted into agencies, franchises and specialized counters for business customers, households beyond the reach of a postal outlet may also be served with postal products by postmen/women during their mail delivery round. After an assessment of post oﬃce reorganization programs in selected countries in Section 2, we focus in Section 3 on Swiss...
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