European Postal Mergers Might Benefit U.S. Mailers

Acquisitions by the government owned postal services in Britain and Germany within the past week were seen by two leading industry groups as strengthening Congressional moves to overhaul the U.S. Postal Service and give it more freedom to compete nationally and internationally.

On Monday the government owned British Post Office said it acquired Germany’s third largest private delivery company, Germany Parcel, for an undisclosed amount. Last year the British Post Office formed a joint venture with Selektvracht, a Dutch wholly owned subsidiary of the Royal Nedlloyd Group to develop a shared mail sorting and processing hub in Utrecht in The Netherlands.

And, last Thursday Deutsche Post, Germany’s government owned postal service in Germany, announced the purchase of a 90 percent stake in MIT, one of Italy’s largest parcel delivery companies, also for an undisclosed amount.

Most American direct marketers with European customers use a combination of services to ship their orders overseas, including those of the USPS, British Post Office, Deutsche Post and the two private delivery companies that were acquired.

Richard Barton, the Direct Marketing Association’s senior vice president for Congressional Affairs, said the actions by both the British and German post offices “shows that other postal administrations, allowed by law to make acquisitions like these, are aggressively going after that business.”

He suggested House postal subcommittee chairman Rep. John McHugh (R-NY) include a provision in his postal reform bill to give the USPS the same kind of authority.

The DMA, Barton said, “wants the USPS to stay in the domestic and international parcel business and thinks it should have the same kind of acquisition authority as its counterparts because in the long run it will be better for both the industry and consumers.”

According to Gene Del Polito, Advertising Mail Marketing Association president, “that’s the dilemma McHugh’s postal reform bill will have to address: giving the USPS the flexibility to change itself as the market demands, both nationally and internationally, without squelching competition.” Direct marketers, he added, want a cost efficient mail system “that’s not handicapped or restrained” from meeting its competition.

Under McHugh’s postal reform bill, which died in committee last year with the expiration of the 105th Congress, the USPS would split its operations into competitive and noncompetitive areas, create a private corporation to oversee its competitive operations, and have the authority to set some of its rates while the Postal Rate Commission would gain greater control over the USPS and its finances. Subcommittee hearings on the measure have been set for Feb. 11 and March 3.