Competition and Regulation in the Postal and Delivery Sector
Show Less

Competition and Regulation in the Postal and Delivery Sector

Edited by Michael A. Crew and Paul R. Kleindorfer

orldwide, postal and delivery economics has attracted considerable interest. Numerous questions have arisen, including the role of regulation, funding the Universal Service Obligation, postal reform in Europe, Asia and North America, the future of national postal operators, demand and pricing strategies, and the principles that should govern the introduction of competition. Collected here are responses to these questions in the form of 24 essays written by researchers, practitioners, and senior managers from throughout the world.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 9: Access, Bypass and Productivity Gains in Competitive Postal Markets

Francis Bloch and Axel Gautier


Francis Bloch and Axel Gautier 1. INTRODUCTION In the European Union, Full Market Opening (FMO) of postal markets is now scheduled for January 1, 2011 (and January 1, 2013 for new members). FMO allows competitors of the incumbent postal operator to enter all the segments of the postal markets, including mail delivery. FMO might be a threat for the financing of the Universal Service Obligation (USO) imposed on the incumbent postal operator, particularly if the entrant bypasses the incumbent’s delivery network. In the postal sector, competition started long before FMO. However, with a few exceptions, competition was limited to the upstream segments of the market (collection and sorting) through the use of worksharing agreements. Worksharing or access means that a competitor can perform all the upstream operations of the postal value chain and buy access to the incumbent’s PO delivery network at a discounted price (compared to the letter price). FMO means that in addition to the access solution that will continue to be available, the competitors also have the option to deliver mail with their own delivery network (bypass). In this chapter, we are interested in the consequences of FMO on the behavior of the incumbent PO. As mentioned, FMO means that the entrant can bypass the incumbent’s delivery network and build up its own. Bypass can be detrimental for both the incumbent’s profit – with a negative impact on its ability to finance the USO – and welfare (Crew and Kleindorfer, 2005; De Donder, 2006; Bloch and Gautier, 2007)...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.