The Economics of the Postal and Delivery Sector: Business Strategies for an Essential Service (Topics in Regulatory Economics and Policy)

Preface
Contents
Competition in the Postal and Delivery Markets in Europe
	1 Introduction
	2 A General Overview of Competition in the Postal Sector
	3 Limited Competition and Increasing Concentration in the Netherlands’ Markets
		3.1 Legal and Regulatory Context for Competition
		3.2 Market Structure and Key Market Players
	4 An Intermediate Case: United Kingdom
		4.1 Legal and Regulatory Context for Competition
		4.2 Market Structure and Key Market Players
	5 The less Concentrated Italian Postal Market
		5.1 Legal and Regulatory Context for Competition
		5.2 Market Structure and Key Market Players
	6 Conclusion
	References
Cartels in the Postal Industry: A Behavioral Theory Consideration of the Game Theory of Leniency Policies
	1 Introduction
	2 The Implementation of Leniency Policy
		2.1 The Process of Claiming Leniency and the Dispensations Available
		2.2 Other Key Features of the Programs
	3 Case Studies in the Postal Industry
		3.1 Royal Mail and the SaleGroup
		3.2 French Parcel Cartel Case
		3.3 Spanish Parcel Cartel Case
	4 Game Theory of the Leniency Policy
		4.1 Classical Game Theory of a Leniency Policy
		4.2 Rationality and Heuristics
		4.3 Information Asymmetry and Imperfect Information
		4.4 Attitudes to Risk and Loss Aversion
		4.5 Trust
		4.6 Social Capital
	5 Conclusion
	References
When a Price Cost Test Is Unnecessary for Assessing Pricing Abuses – The Royal Mail Case
	1 Introduction
	2 Generally There Are Good Reasons for Using the AECT for Assessing Alleged Pricing Abuses
	3 Background to Royal Mail’s Pricing Conduct
		3.1 Bulk Mail Delivery
		3.2 Whistl Expands from Bulk Mail Retail Services into Delivery
		3.3 Royal Mail’s January 2014 Price Notification
	4 Ofcom’s Finding of Abuse and Subsequent Appeal
	5 In What Circumstances Is the AECT Not Appropriate for Assessing Pricing Conduct?
		5.1 No Role for AECT When No Prices Are Lowered
		5.2 Not Using the AECT for Assessing Pricing Conduct Even Where Some Prices Were Lowered for Consumers
	6 If Competition Authorities Use the AECT for Assessing some Pricing Cases but Not Others, Might Uncertainty Over Its Application Chill Beneficial Competition?
	7 Conclusions
	References
Data and the Regulation of E-commerce: Data Sharing vs. Dismantling
	1 Introduction
	2 The Model
	3 The Scenarios
		3.1 Reference Scenario: R
		3.2 Data Sharing: S
		3.3 Vertical Separation: VS
		3.4 Complete Dismantling: CD
	4 Numerical Results
		4.1 Baseline Scenarios
			4.1.1 Small Cost Advantage: γ1 = 0.9
			4.1.2 Large Cost Advantage: γ1 = 0.5
		4.2 Robustness Checks
		4.3 Larger Scale Factor, Implying Lower Competition Intensity
			4.3.1 Large Scale Factor and More Attractive Outside Option
	5 Conclusion
	References
An Assessment of USPS’ Negotiated Service Agreements and Platforms’ Direct Entry in Delivery
	1 Are NSAs Profitable?
	2 Do NSAs Improve or Impair Market Performance?
	3 Platform Entry into Last-Mile Delivery
		3.1 Parcel Market Performance
		3.2 Retail Goods Market Performance
		3.3 Other Social Costs
	4 Conclusions: The Future of USPS and an Answer to President Trump
	References
Separate or Integrated? Least-Cost Parcel Delivery Methods in a Flexible Delivery Environment
	1 Introduction
	2 The Model
	3 Calibration
	4 Results
	5 Conclusion
	References
Assessing Diversification in the Postal Sector
	1 Introduction and Summary
	2 Postal Diversification
		2.1 Postal Diversification in the EU
		2.2 The Different U.S. Perspective
	3 US Precedents from Other Sectors
		3.1 Breaking up the Phone Company
		3.2 Restructuring the Electricity Sector
	4 Concerns with Regulated Firms in Competitive Markets, with NPO Applications
		4.1 The Role of Regulation
		4.2 Excessive Transfer Pricing
		4.3 Discrimination
		4.4 Cross Subsidization
	5 Vertical Integration by Platforms
	6 Countering Questions
		6.1 Can Regulators Prevent These Harms Without Separation or Divestiture?
		6.2 Do Concerns Apply with Price Cap Regulation?
		6.3 Do NPOs Retain Market Power Following e-Substitution?
		6.4 What If the NPO Does Not Maximize Profits?
	7 Economies of Scope and Other Potential Benefits
		7.1 Increased Competition
		7.2 NPO Scope Economies in General
		7.3 Potential Excess Capacity Resulting from the USO
		7.4 Are Cross-Subsidies Politically Preferred?
	8 Conclusion
	References
The Historical Contribution of Postal Service to Social Welfare in the United States
	1 Introduction
	2 Using the Historical Data
	3 An Econometric Model of Postal Service
	4 The Estimates
	5 Estimating Social Welfare
	6 Alternative Pricing Strategies
	7 The Evidence for the Findings
	8 Conclusion
	References
The Risks of Customer Data Processing Under the GDPR: The Austria Post Case
	1 Introduction
	2 The DSB Decision
		2.1 The Processing of ‘Party Affinity’ Data
		2.2 The Processing of ‘Package Frequency Affinity’ and ‘Relocation Affinity’ Data
		2.3 The Internal Responsibilities and the Fine
	3 Lessons from the Decision
		3.1 Be Prudent and Consistent When Qualifying Processed Data (Personal vs. Non-personal)
		3.2 Choose Carefully the Legal Basis for Processing
		3.3 Be Transparent and Mind the Implications of the USP Position
	4 Conclusion
	References
The Universal Postal Union. Quo Vadis?
	1 Introduction
	2 Historical Background
		2.1 Specialized Agencies of the United Nations (UN)
		2.2 The 1964 Vienna Congress
	3 Evolution of Postal Services and the UPU
		3.1 Legal Status of Postal Services
		3.2 Types of Postal Service
		3.3 Business Trends
		3.4 Universal Postal Service
		3.5 Terminal Dues (price fixing)
		3.6 Customs clearance
	4 “Reform of the Union”
		4.1 Wider Postal sector involvement
		4.2 E-Commerce
		4.3 Sustainability of USPs/Designated Operators
		4.4 Separation of Governmental, Operational and Commercial Issues
	5 Conclusion: Quo Vadis? – A Vision for a Reformed UPU
		5.1 Governance of the Wider Postal Sector
		5.2 Provision of Universal Service
		5.3 UPU as a Representative Organization
	References
Do We Need to Redefine the Legal Definition of the Postal Service?
	1 Introduction
	2 The Legal Definition of the Postal Service
		2.1 International Law: UPU
		2.2 EU Law
		2.3 National Regulations
			2.3.1 Belgium
			2.3.2 Italy
			2.3.3 Poland
			2.3.4 Switzerland
			2.3.5 France
			2.3.6 Canada
	3 Scope of the Postal Service
	4 Conclusions
	References
The Future of Services of General Economic Interest in the Postal Industry
	1 Introduction
	2 Main Dynamics of the Postal Industry and the Chance Offered by SGEIs
	3 bpost and La Poste SGEIs: Interesting Examples
	4 The SGEIs’ Future
	5 Conclusions
	References
Sustaining the USO in Canada: Toward a Case for Adapting Reserved Area Parameters in the Digital Age
	1 Introduction
	2 Universal Service and Monopoly in Canada: Existing Parameters
		2.1 First Era: Confederation
		2.2 Second Era: Corporatization
		2.3 Third Era: Service Charter
		2.4 Summary Comments
		2.5 Changing Structure of Value Components
	3 COVID-19 Pandemic Experience
	4 Parameters of the Reserved Area
	5 Further Inquiry
		5.1 Research on the Value Side
		5.2 Research on the Cost/Drawback Side
	6 Ramifications for Stakeholders
	7 Conclusion
	References
Neither the Carrot nor the Stick: How to Ensure Adequacy of Traditional Postal Operators’ Funding in a Rapidly Transforming Market
	1 Introduction
	2 The Transformation of the Postal Services Market
	3 The Adaptation Process of Postal Operators
		3.1 Traditional Postal Operators Explore New Strategies to Stay Competitive
		3.2 Call for Investments in Physical and Digital Infrastructures
	4 Beyond the Compensation Fund for USO
		4.1 Alternative Funding to Sustain the Postal Transformation
		4.2 The COVID-19 Crisis: Potential Spillovers for Postal Funding
	5 Risk of Competitive Distortions
		5.1 EU State Aid Rules Revisited
		5.2 How to Monitor Competition in a Rapidly Changing Market?
		5.3 Remedies Recommendations
	6 Conclusions
	References
Has the Covid Pandemic Accelerated the Rate of Decline in Business Letters? Some Early and Preliminary Analysis and Thoughts
	1 Introduction
	2 UK Commercial Mail Trends
	3 An Econometric Analysis of Commercial Letter Mail Demand
	4 Econometric Estimates of the Demand for Commercial Letters
	5 Using Econometric Models to Assess Historical Letter Traffic Trends and Examining the Impact of the Pandemic
	6 Summary and Conclusion
	Appendix: A Comparison of Outturn Data and Econometric Model Confidence Intervals
	References
A Method to Assess the Impact of the Universal Postal Service Obligation
	1 Introduction
	2 Literature Review and Methodologies Currently Employed by Regulatory Authorities
	3 A more Rigorous Approach: Profitability Benchmarking
		3.1 Non-parametric Approach
		3.2 Regression Approach
	4 Conclusions
	References
Net Costs of USP’s Service Provision: Challenges for the Coming Decade
	1 Introduction
		1.1 Background and Research Questions
		1.2 Literature
	2 The Short Run: Keeping Counterfactuals up to Date in Dynamic Market and Regulation Environments
		2.1 The General Challenge: True Counterfactuals Are Dynamic – Consequently, Regulated Counterfactuals Require Frequent Updating
		2.2 Specific Cases That May Require Updates of the Counterfactual
			2.2.1 Background and Considered Cases
			2.2.2 Legal Developments I: Altered USO-Specifications
			2.2.3 Legal Adjustments II: New USO Provisions
			2.2.4 In a Dynamic Status Quo, Parameterizations May Become Outdated
	3 The Long Run: Evidence from Switzerland
		3.1 Long Run Modelling
		3.2 Results
		3.3 USO Net Costs When Letters Are Not Profitable Anymore
	4 Conclusion
	References
The Climate Challenge: What Role Postal Operators Are Going to and Could Do to Mitigate It?
	1 Introduction
	2 The Ways to Mitigate the Climate Challenge According to the Economic Theory
		2.1 A Story of Public Goods and Negative Externalities
		2.2 The Classic Solutions to Mitigate Negative Externalities…
		2.3 … Are Unfortunately Not Totally Relevant to Reduce CO2 or GHG Emissions
	3 Where Do You Stand and Where Would You Go?
		3.1 A Too Low Carbon Price
		3.2 A Partial Emission Trading System
		3.3 A Need for More Ambitious and Coordinated “Green Deals” Around the World
	4 The Actions Already Implemented by Postal Operators to Reduce Their Environmental Impact, and Some Recommendations to Go Further
		4.1 The Postal Industry Has Taken Initiatives to Reduce Its Carbon Footprint for More Than Ten Years
		4.2 Postal Operators Help Mail Senders, E-Retailers and E-Consumers to Reduce Their Carbon Footprint and Could Promote More Informed Decisions
	5 Conclusion
	References
The Role of Postal Operators in the Circular Economy
	1 Introduction
	2 The Linear Economic Model Seems to Be Not Sustainable in the Long Run
	3 The Circular Economy Could Provide a More Sustainable Model to Firms and Consumers
	4 The Transition Towards a Circular Economy Faces Several Obstacles
		4.1 The Circular Economy Can Generate Environmental Rebound Effects
		4.2 The Transition Towards a Circular Economy Implies Significant Investment and Behavioral Changes
		4.3 The Transition Towards a Circular Economy Will Generate Losers and Winners
	5 Recent Developments Suggest That the Transition to a Circular Economy Should Accelerate
	6 Postal Operators Can Play a Key Role in the Transition Towards a Circular Economy Business Models
		6.1 Postal Operators Develop Circular Practices in Their Operational Process
		6.2 The Circular Economy Is a Diversification Opportunity for Postal Operators
		6.3 Postal Operators Can Become the Logisticians of the Circular Economy
	7 Conclusion
	References