1. National market
At the dawn of the 21st century, La Poste has to cope with two essential evolutions that affect the essence of its activities and have an influence on the future prospects. On the one hand, the « classic » market becomes narrower and on the other hand, the volume of traditional letter post falls. The mail called « social mail » and the administrative mail decrease.
Since the liberalisation of postal services, an increasing number of players are on the market.
The new information channels are gradually replacing the traditional letter post. Besides e-mails and SMS’s, Internet has become more and more important in the communication. Indeed, in Belgium, 2.36 millions of households have a connection to Internet, whereas about 4.2 millions of Belgians regularly use it.
The electronic media do not only gain ground as far as private persons are concerned. Companies have also taken over the electronic tools to communicate with their customers. The new professional uses can essentially be classified in two categories: marketing and advertising on line on the one hand, electronic billing on the other hand.
The new trends in the professional modes of communication are worrying for the Belgian Post ‘La Poste’ that is currently still achieving 90 % of its turnover thanks to companies.
2. The European postal sector
The postal policy at European level
National posts are certainly the most important and the oldest governmental services. The governmental postal systems have been developed by the French and English monarchs as soon as the 17th century, the English postal reform introduced in the 19th century uniform and affordable postal tariffs. Since then post offices have been an essential element of the social life of European countries.
In the eighties, the rapid evolution of the information and transport technologies has eroded the simplicity of the postal processes. The first « time sensitive » products have appeared with the first airlines specialised in express mail delivery. The first « remailing » markets emerged, as some companies preferred to have their mail directly printed in the destination country. Suddenly, the so-called traditional posts were faced with competition in the sector of cross-border mail conveyance.
In reaction to these changes in the traditional post, the European Commission has launched a large study on the postal sector services. It led to the « Postal Green Paper » adopted in June 1992. This document proposed a definition of the minimum postal service ; the liberalisation of cross-border mail and of direct mail as well as the establishment of an independent postal regulator in each Member state. The latter would be responsible for imposing quality standards of the universal service. All these proposals fell within the scope of the single market.
In December 1997, the European Commission adopted Directive 97/67. The objectives of this Directive are to improve the quality of service and to facilitate the internal market of postal services. Besides the obligations of transposition (met by Belgium through the Royal decree of 9 June 1999 that adapts the Act of 31 March 1991), the directive also imposed criteria for the definition of “reserved services”, access to the postal network, tariff principles, and finally an harmonisation of the technical standards.
The universal service operators (the so-called “traditional posts”), have developed, within the framework of the directive, a system called REIMS (“Remuneration of Exchange of International Mail System”) for the financial compensation (Terminal Dues) and the control of cross-border mail.
In June 2002, the Council and the Parliament amended the Directive of 1997. From 2006 onwards the reserved area has been reduced to 50 g and 2,5 times the price of the basic letter, this in expectation of full liberalisation in 2009.
On 27 February 2008: publication of Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services
This directive sets a final date for the full opening of the postal services market and requires the suppression of the last reserved area until 31 December 2010 at the latest and foresees the possibility for a few Member States to postpone the full opening of the market for maximum two years.
3. The state of the market
The postal sector world-wide – The economic environment
In spite of electronic substitution, volumes of addressed mail have made progress in Europe between 2004 and 2006.
During this two year period volume average growths have been more important in the twelve countries which joined the EC in 2004 and 2007 (+6.5%) than in the other EC countries (+ 1.5%), which reflected the link between economic activity and mail volumes.
The sending of publications is another important source of revenue for La Poste. It has been shown that consumers are not swapping newspapers and periodicals in paper form for reading matter on electronic carriers.
Advertising on Internet is in full growth, but the traditional advertisers have found a good complementarity between direct mail and Internet.
A distinct trend towards electronic substitution is noticeable for the following products:
• “Business to Consumer” and “Business to Business” correspondence;
• invoices, statements of accounts;
• printing of on-line catalogues;
• targeted direct marketing;
• printing of documentation.
It must also be stressed that postal services might take the opportunity offered by the new electronic products.
The postal services (collection, transport and distribution of correspondence, offices for retail sales) can after all be used for an extensive range of services with added value. A modern postal system can contribute to a range of logistics solutions for the integration of the data flow, the equipment flow and the financial flow. The postal companies can also offer implementation and distribution services for e-commerce, as well as such services as investment and payment centres for companies and private individuals.
Finally, work has only just begun on exploring and evaluating the provision of public terminals with fast access to Internet at post offices for the retail sales.
Even ‘cyberspace’ implies a material dimension. It is there that the demand for reliable postal services is and will remain very large. But it must nevertheless be noted that at global level, the fall in the number of items entrusted to the postal service is steady.
The segmentation of the Belgian postal market
The postal market is segmented as follows :
Source: BIPT
Postal services are defined as follows : services related to registered items that consist in one of the following operations or in the combination of several of them :
• collection;
•sorting;
•transport;
•distribution.
Services exclusively reserved for La Poste are :
• The collection, sorting, transport and delivery of domestic letter post, whether by accelerated delivery or not, with a price less than 2.5 times the public tariff for letter post in the lowest weight class of the fastest category, insofar as the weight is lower than 50 grams;
NB :A “letter post” is a written message on any physical support that must be forwarded and delivered at the address indicated by the sender on the item itself or on its wrapping.
• Incoming cross-border mail and direct mail within the same price and weight limits.
The postal universal service includes the following services :
• collection, sorting, transport and delivery of postal items up to 2 kg;
• collection, sorting, transport and delivery of postal parcels up to 10kg;
• delivery of postal parcels received by other State members and weighing up to 20kg;
• services related to registered items and insured items.
The universal postal service operators remain the main service providers of letter post. The six main postal operators – Deutsche Post (DPAG), La Poste (France), Royal Mail, TPG (Dutch post), Poste Italiane, Posten AB (Sweden) – represent 75% of the European market. The part of the competitors in traditional posts is less than 5%.
The parcel and express delivery market
The border line between the parcel market and the express delivery market is not clear. Private operators are very active on the parcel and express mail market. Large universal service operators are present outside their national market.
Parcel and express mail items are experiencing a dynamic growth. Competition is developing and innovations include new networks of parcel collection and delivery or automatic withdrawal by addressee customers.
The following development should be emphasised: that the gap between the parcel market and the express market is decreasing. Operators are increasing their line of production in B2C growing markets and international services. There is a growing "grey zone" between the express sector and the basic postal parcels. Traditional parcels become more and more "express" while customers who want to reduce their costs rather grant more importance to the predefined distribution window than to transit speed.