Romania Privatizing It’s Post Office in 2012

Romaia Post

Act Media has reported that the Romanian Ministry of Communications and Informational Society (MCSI) has signed a contract with KPMG Romania and Tuca Zbarcea, & Associated to provided consulting services setting up a privatization process of the Romanian Postal Company.  The contract is designed to aid the Romanian Ministry with privatization of the Romanian Postal Corporation (Posta Romana) by the end of 2012. In the press release, Dan Nica, minister of Communications implied that the contract is to handle the final phase of privatization of Posta Romana.  We concluded the second stage in the privatization process and there follows a period filled up with preparations, meetings, negotiations. We proposed to conclude the privatization [...] Read more »

It’s Time for Postal Unions to Find New Owners for the USPS

American Airlines Thumb

In a column in the April 29, 2012 Washington Post, Steven Pearlstein discusses how American Airline unions may have turned the tables on American Airline management’s plans to restructure the airline. American management’s plan focused on cutting costs, and in particular labor costs. Right now it appears that management is unlikely to implement their plan as American’s three largest unions have come to an agreement with US Airways that will involve fewer cost cuts and will focus instead on marketing synergies between the networks of US Airways and American Airlines in a way that will expand the merged airline’s ability to compete for business customers with United and Delta Airlines, [...] Read more »

Gene Del Polito: It’s Time To Eliminate The USPS Monopoly

Del Polito

In this final part of the interview, Gene Del Polito, President of the Association of Postal Commerce presents the case for eliminating the mailbox monopoly and an American approach to privatization.  By combining these ideas with his recommendation that the Postal Service have the ability to contract out any activity that was discussed in the preceding part of this interview, Mr. Del Polito presents a case for policy changes that go beyond the changes that lobbyists for the mailing industry have promoted to date.   Time to Eliminate the Mailbox Monopoly Robinson:        Are you suggesting that it is time to eliminate the mailbox monopoly? Del Polito:        Yes, Perhaps the time has come to [...] Read more »

Gene DelPolito: A New Approach for Government Provision of Postal Services

Del Polito

In the first three parts of this interview, Gene Del Polito, President of the Association for Postal Commerce laid out his opinion regarding the prospects for legislation and what could happen if no legislation passes.  In this section of the interview, Mr. DelPolito presents a different approach for postal reform  His approach removes all restrictions from contracting out postal operations.  Mr Del Polito concludes this section with a discusion of the problems that catalog and periodical mailers have with the Postal Service.  He states that these mailers should be free to find another supplier to sort and deliver their mail to the mailbox if the Postal Service cannot provide the service quality [...] Read more »

The Postal Service Business Plan: the Result of Choosing a Government Business Model


The Postal Service today presented a 5-year business plan that it calls a Plan for Profitability. The plan represents the impact of the investment bank Evercore partners and clearly indicates that Evercore was required to develop a plan that maintained the financial and market restrictions of a quasi-governmental Postal Service. Therefore the plan differs significantly from successful plans for profitability of most foreign postal administrations. The two key differences are 1) the plan does not include an infusion of capital, mostly coming from private sector; and 2) the plan does not include the commercial freedom to fully exploit the value of the Postal Service brand or its human, physical or [...] Read more »

Portugal Preparing Sale of Post Office

Portugal Post Office logo

As part of its bailout plan, Portugal has prepared a second round of sales of government owned corporations.  According to Jorge Cardoso, CEO of Caixa Banco de Investimento, who has advised the government in the sale, indicated that the Portugese Postal Service, CTT — Correios de Portugal, is one of the major government corporations that the Portuguese government expects to sell in 2012. While Portugal is a small country, its postal service offers a broader range of services than the United States Postal Service.  In addition to traditional letter and parcel delivery services, Correios de Portugal offers: For Consumers: Financial Services, including money orders, savings accounts, money transfers, insurance, toll [...] Read more »

Postal Service Self Sufficiency, Financial Viability and the Business Model

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No stakeholders and few members of Congress argue that the United States should provide postal services through a mix of user fees and tax revenues in a manner that highway, air, and rail passenger transportation are provided. The Postal Service and its supporters point with pride that since the passage of the Postal Reorganization Act, the Postal Service has covered its costs through postage revenue. For many years, no one questioned whether the Postal Service could be self-sufficient or financially viable as long as revenue just covered costs over the long run. The Postal Service’s current financial crisis illustrates the failure of this lack of curiosity. The current postal reform [...] Read more »

How the Business Model and Congress Failed the Postal Service


Adam Hartung in Forbes magazine has an article that reaches the nub of the problem with the Postal Service and why the Postal Accountability and Enhancement Act (PAEA) failed. Basically, PAEA did not give the Postal Service the tools to make the shift in its business strategy as the market for mail shifted. The Post Office didn’t really do anything wrong. The market shifted. The Post Office value proposition simply isn’t as valuable as it once was. So how does an enterprise deal with market shifts? It transforms itself or it dies. Two Rochester, NY based companies illustrate the alternative paths. Xerox, the creator of the office copier, realized that competition [...] Read more »

GAO’s Description of Privatization Creates a Straw Man


Liberalized national posts have illustrated viable privatization or corporatization options. All of these options maintain the integrity of the national post and have retained most of the pre-liberalization workforce of the enterprise. Furthermore, these privatization approaches have generated a profitable, self-sufficient, national post that pays corporate taxes, and in cases in which the government still owns shares, dividends to the government shareholder. Restructuring of transportation and telecommunications seems to work best if the resulting entities are national entity. In trucking, regional carriers merged over time to take advantage of opportunities to offer better service to meet customer needs and minimizing costs in order to offer competitive prices. In rail, mergers [...] Read more »

Separating Roles of the USPS


A recent story by the BBC on mail delivery in Afghanistan highlights one of the most important roles of the Postal Service, maintaining and standardizing the nation’s system of addresses and postal codes.  Afghanistan has neither a standardized system of address nor postal codes.  In fact, in many parts of the country, there are no street names, let alone street names at all. For the postmen of Kabul, navigating the maze of the city is a daunting task. It is a city of more than four million people and one in which hundreds of homes and streets are being developed every year. There are few street names and house numbers, and the [...] Read more »