Briefing on Universal Postal Union issues

19 July 2006

U.S. Department of State, Washington, D.C.

1.Welcome

andIntroductions

1.1.WelcomeWelcome

andandIntroductionsIntroductions

2.March 2006

Postal Operations Council

2.2.March 2006March 2006

Postal Operations Postal Operations CouncilCouncil

Committee 1Standards

and Procedures

Committee 2Terminal Duesand Economic

Issues

Committee 3Operational Issues Action

Groups

Strategic Planning GroupManagement Committee

Postal Operations Council

StandardsBoard

Postal Economics

Project Group

Terminal DuesProject Group

DCAG

PSAG

PDAG

ConsultativeCommittee

Committee 4Markets

POC Groups

EnvironmentProject Group

Parcels

E-Productsand Services

Quality ofService Fund

Quality of ServiceProject Group

Liability Project Group

AddressingProject Group

IATA/UPUContact Committee

WCO/UPUContact Committee

Direct Mail Advisory Board

PublishingIndustry Group

World Assoc.for the

Developmentof Philately

UserGroups

UPU*ClearingUser Group

EMS Cooperative

TelematicsCooperative

Postal Financial Services

Multilingual Vocabulary

Project Group

Costs and PricesProject Group

Customs SupportProject GroupOperations and

AccountingReview

Project GroupInternational Reply

CouponsProject Group

Customer Relations

Project Group

Research and Marketing

Development Group

POC Organizational ChartPOC Organizational Chart

UPU Groups that the U.S. chairs

Parcels PT 2 on ServicesStandards Board Data and Code Definition Group

SPG Scenarios TeamStandards Board Physical Encoding Group

SPG Results-based Management Team

Standards Board

Terminal Dues PT 2 on Statistics and Accounting

Postal Security Action Group

CA Acts of the UnionProject Group

Consultative Committee (Private sector)

POC Chairman

1. Terminal Dues and Postal Economics:Lea Emerson and Kathy Clendenin

2. Performance Measurement:Bruce Marsh

3. Strategic Planning and Results-based Management:Dennis Delehanty andJanice Gould

March 2006 Postal Operations Council

Dennise Mathieu

TD PGChairman: Switzerland

Vice-Chairman: Canada

TD PGChairman: Switzerland

Vice-Chairman: Canada

TD PG Steering Committee

TD PG Steering Committee

PT 2Statistics and Accounting

Co-Chairs:USA/ Malaysia

PT 2Statistics and Accounting

Co-Chairs:USA/ Malaysia

PT 1Terminal Dues Model

Co-Chairs:Belgium/ Morocco

PT 1Terminal Dues Model

Co-Chairs:Belgium/ Morocco

PT 3Quality LinkCo-Chairs:

Finland/ Brazil

PT 3Quality LinkCo-Chairs:

Finland/ Brazil

Terminal Dues Project Group and Project TeamsTerminal Dues Project Group and Project Teams

Work Groups under PT 1:1) Studies, 2) Methodologies,3) Policy Questions and 4) Domestic Access

Lea Emerson

Terminal dues timelineTerminal dues timeline

CA2005CA

2005

Proposals to2007 POC

Proposals to2007 POC

2008 NairobiCongress

2008 NairobiCongress

January2008

January2008

August2008

August2008

Goal: Country-specific, cost-based terminal dues by January 2014

POC2006POC2006

POC2007POC2007

CA2006CA

2006CA

2007CA

2007CA

2008CA

2008

Spring2006

Spring2006

April2007April2007

Lea Emerson

WorldRoundtable

WorldRoundtable

POC2008POC2008

Fall2007Fall

2007October

2006October

2006

Terminal duesworkshop

Terminal duesworkshop

Work through regional terminal dues roundtablesWork through regional

terminal dues roundtables

October 2006 Terminal Dues Workshop Goals

Lea Emerson

Review work to date on data collection and analysis, policy issues and methodologies

Define certain elements/options for future UPU target system and transition requirements

Base new target rates on multiple domestic rates? Multiple formats? Different rates for Priority vs. Non-priority? Take into account size of mail flow?

Define new directions for future work based on Workshop feedback and conclusions

Private sector input on terminal dues – last cycle

Lea Emerson

Continue move toward “cost-recovery”

Minimize arbitrage system of differences for Industrialized Countries (IC) versus Developing Countries (DC) and eliminate over time

Immediate and major increases in postage rates are undesirable

Postage rate increases should be phasedin over time or introduced with a longwarning period

U.S. Government position – last cycle

Lea Emerson

Goal: Terminal dues system that is market oriented, cost based, and country specific

Only moderate and predictable rate increases

Increase in minimum floor rate to ensure cost recovery for countries with low domestic rates

Focus on mail volumes and dynamic transition

Quality of Service Fund to facilitate postal development and quality improvement

Postal Economics Update:

Kathy Clendenin

Postal Rate Commission

Kathy Clendenin

UPU Performance Measurement – Letter Post

Bruce Marsh

Industrialized Country (IC) system developments:

Began January 1, 2005 based on International Post Corporation UNEX system (2005 Results announced at April 2006 POC)

- Royal Mail and USPS Appeals

UNEX Contractor Transition (from IBM Consulting to Research International)

2006 Participation (24 countries + 2 new)

Member Recruitment for 2007

RFID Sites - 221 in 49 countries

UPU Performance Measurement – Letter Post

Progress on UPU global system design:

Level 1 (L1): (to replace IC system) diagnostic inbound (Leg 3) testing based on size of flows and external panelists

Level 2 (L2): for smaller transitional countries measuring inbound (Leg 3) testing using date stamping and external panelists

2007 Pilot Programs

Auditing-Validation Authority (USPS Lead)

UPU Quality of Service Program Improvements(resources, report cards, etc.)

Bruce Marsh

UPU Strategic Planning Group

Dennis Delehanty

Chaired by Russia Post CEO Igor Syrtsov

10 member countries: 5 each from CA and POC

Four Teams:– Results-based Management: Chaired by U.S.– Scenarios: Chaired by U.S.– 2008 Nairobi Postal Strategy: Chaired by Belgium– Communications (November 2006 UPU Strategy

Conference in Dubai):Chaired by Russia

Results-based Management Team

Dennis Delehanty

Results-based Management Team focusing on:

1. Developing methodologies for setting UPU priorities, particularly for the UPU budget

2. Conducting and publishing report cards on attainment of Bucharest World Postal Strategy goals by member countries and UPU

3. Contributing experience gained for drafting the 2008 Nairobi Postal Strategy

OECD system for developing priorities

Questionnaire sent to member countries.

Replies presented in colors:

Green: Increase activity or program

Yellow: Maintain program

Orange: Reduce program

Red: Stop program

… Results to be presented in matrix format.

Questionnaire sent to member countries.

Replies presented in colors:

Green: Increase activity or program

Yellow: Maintain program

Orange: Reduce program

Red: Stop program

… Results to be presented in matrix format.

Setting priorities: next steps

Study OECD methodology in detail.

Examine programs in UPU budget and Bucharest World Postal Strategy.

Draft model questionnaire to ask member countries their views about UPU priorities.

Dennis Delehanty

Bucharest World Postal Strategy

Dennis Delehanty

Five major objectives:1. Universal postal service

2. Quality of service and efficiency of the network (includes performance measurement, standards, tracking and IT systems, terminal dues and security)

3. Markets and responding to customer needs

4. Postal reform and sustainable development

5. Cooperation and interaction amongstakeholders

12 measurements for Bucharest Strategy report cards12 measurements for Bucharest Strategy report cards

Postal Security: Transmission of data to eMaria.7.

Postal Security: Received training on eMaria.6.

%(Inward international) parcel quality of service5.

Delivery standards for parcels.4.

%(Inward international) letter post quality of service3.

Delivery standards for letter post.2.

DateExistence of a national law providing for universal postal service.

1.

TypeMeasurement or indicatorNo.

Letter post prices based on costs.8.

12 measurements for Bucharest Strategy report cards12 measurements for Bucharest Strategy report cards

Forums for stakeholders.12.

Type of reform: post + telecom separation; regulator + operator; corporatization; privatization; license system.

11.

DateAdopted postal reform legislation.10.

%National customer satisfaction survey.9.

TypeMeasurement or indicatorNo.

Results-based Management: Possible questions

Any other ideas for setting UPU priorities?

Have we chosen the right indicators to measure? Are there too few – or too many?

How can we reasonably measure level of customer satisfaction or the existence of stakeholder forums?

Can we – or should we - measure overall UPU performance, or performance of individual project teams or working groups?

Can measurements change behavior of member country or the UPU?

How will measurements help to set UPU priorities?

Dennis Delehanty

Scenarios: March 2006 First Draft Report

Janice Gould

Objective of Report: Focus on marketplace and global postal sector industry trends driving change to develop scenarios for 2012.

Purpose: Consider scenarios given rates of change. Posts identify where they see themselves now and in 2012. Posts plan for futureby examining possible responses.

Scenarios:Predictable – doing the same things betterTransformation – doing things differentlyDisruptive – doing different things

Strategic Responses:TraditionalHybridCommercial

Degree of Market Participation

(business decisions made by postal operators)

High

Low HighDegree of Market and Operational Liberalization(Policy choices made by governments)

Traditional Post

Protected markets

Government fundedand managed

Help develop national infrastructure

Traditional Post

Protected markets

Government fundedand managed

Help develop national infrastructure

Hybrid Post

Mixed market solutions with competition in some markets

Moving towards market-based self-sufficiency

Growing emphasis on customer-oriented Services

Primarily domestic focus

Hybrid Post

Mixed market solutions with competition in some markets

Moving towards market-based self-sufficiency

Growing emphasis on customer-oriented Services

Primarily domestic focus

Commercial Post

Primarily market solutions in competitive environments

Essentially self-sufficient and independent

Relatively free of non-Commercial obligations

Opportunistic global market focus

Commercial Post

Primarily market solutions in competitive environments

Essentially self-sufficient and independent

Relatively free of non-Commercial obligations

Opportunistic global market focus

Incremental ChangeModerate Change

Disruptive Change

Scenarios: Policy Choices and Business DecisionsScenarios: Policy Choices and Business Decisions

Scenarios Team: The Way ForwardScenarios Team: The Way Forward

Janice Gould

Implications for Role of UPU:

Segmented approach to satisfying different needs of member countries

Take into account broader and more complex postal sector

Challenges for UPU:

Define market segments and their size

Develop relevant services for members responding effectively to each

Establish scope of effort and relative priority of service initiatives

Next Steps:

Refine report:

Regional perspectives

Reform of the Union survey results

Include full analysis of Strategic Planning Group survey results

Issue second draft report for 2006 CA

3.March 2006 CA working group

meetings

3.3.March 2006 CA March 2006 CA working group working group

meetingsmeetings

CA Organizational ChartCA Organizational Chart

Committee 1Reform of the Union

Committee 2Regulatory Issues

Committee 3Finance Action Groups

Strategic PlanningGroup

ManagementCommittee

Council of AdministrationPlenary

Structure and ConstituencyOf the Union

Terminal DuesGovernance Issues

Acts of the Union

WTO Relations

Universal PostalService

DCAG

PSAG

PDAG

AllocationOf

Responsibilities

ConsultativeCommittee

Acts of the Union:William Alvis,Chairman,Acts of the Union Project Group

William “Tex” Alvis

Structure and Constituency of the Union

Dennis Delehanty

Some proposals at June 29 Project Group meeting in Bern:

1. Reduce the number of groups, particularly in POC;

2. Abolish rule limiting number of terms a UPU member can serve on CA;

3. Reorient UPU strategic planning to align work more closely with CA;

4. Review structure and activities of Action Groups (e.g. Direct Mail Advisory Board or Publishing Sector Industry Group) to reduce duplication of effort;

5. Require proposals to Congress to indicate expected costs, particularly “proposals of general nature”.

4.Consultative

Committee

4.4.Consultative Consultative

CommitteeCommittee

Consultative Committee

Program of Action andPriorities for the UPU:

Oral presentation by Charles Prescott, Chairman of the Consultative Committeeand Sue Presti of theExpress Delivery and Logistics Association(XLA)

Charles Prescott and Sue Presti

Reform of the Union and Strategic PlanningWTO – Working GroupUniversal Service definition – Work GroupE-products and Services

Consultative Committee: CA and POC Matters

Charles Prescott and Sue Presti

WTOUniversal ServiceStandards and AddressingStrategic Planning

Consultative Committee Working Groups

Charles Prescott and Sue Presti

Access surveyProposed: International Change of Address SystemExpanding membership and involvement

Ideas …? Recommendations …?

Consultative Committee Major Projects

Charles Prescott and Sue Presti

5.U.S. policy

towards ETOEs

5.5.U.S. policy U.S. policy

towards ETOEstowards ETOEs

Extra-territorial Offices of Exchange: U.S. policy

On April 24, the State Department published updated U.S. policy towards ETOEs on IO Bureau website at following link:http://www.state.gov/p/io/ipp/usgdoc/65178.htm

Revised policy clarifies that ETOEs in the U.S. are commercial operators; the items they import and export are considered as cargo.

Inbound ETOE cargo must be cleared using commercial customs clearance procedures (then tendered to USPS, as appropriate, as domestic mail).

Outbound ETOE cargo must be conveyed on commercial documentation (air way bills) using commercial customs clearance procedures.

Dennise Mathieu

Photo credits

Slide 6: Hakan Lindgren, Sweden Post

Slide 10: Canada Post

Other photos courtesy of the Universal Postal Union