Ups Report en

wik-Consult Final Report
Study for the European Commission

Directorate-General for Internal Market
Quality of Service Objectives,

Performance and Measurement
in Relation to Community
Universal Postal Service
Authors:
Antonia Niederprm
Andreas Hense
Dr. Gabriele Kulenkampff
in cooperation with
Alex Kalevi Dieke
Bad Honnef, August 2003
The views and opinions expressed in this study

are those of the authors and do not necessarily
reflect the position of the European Commission.
ACKNOWLEDGEMENTS
WIK wishes to acknowledge the considerable assistance of all parties that contributed
to this survey. In particular, the authors gratefully acknowledge the intense cooperation
of universal service providers, national regulatory authorities, and customers
representatives in the countries surveyed. Moreover, we like to thank FEDMA, ANEC,
EMOTA, FAEP, IPC, CEN/TC 331 and the Customer Needs Task Force. Many invested
substantial time and resources in gathering, submitting, and discussing the information
without which this survey would have been impossible.
WIK also gratefully acknowledges the many valuable inputs that were received from the
European Commissions study team. Special thanks are extended to Jean-Franois
Rodriguez, who co-ordinated the Commission services involvement in the study, as
well as to Fernando Toledano and David Stubbs. Their challenging questions and
productive comments contributed greatly to the value of this survey. Any errors,
however, remain the responsibility of the authors.
The views and opinions expressed in this study are those of the authors and do not
necessarily reflect the position of the European Commission.
Final Report
Contents
Tables
IV
Figures
VI
List of acronyms and abbreviations
XII
Country Codes
XIII
Executive Summary
Background and purpose of the study
Scope and methodology
ii
Main results of the analysis
iii
Recommendations and next steps
vi
1 Introduction
1.1 Background and purpose of the study
1.2 Outline of the study
2 Scope and methodology of the study

2.1 Scope
2.2 Methodology of the study
9
9
15
3 Description of the status quo current quality of service policies and performance 19
3.1 The Community and international framework of QoS regulation
19
3.1.1 Postal Directive (Directive 97/67/EC amended by Directive 2002/39/EC)
19
3.1.2 Technical standardisation by CEN/TC331
24
3.1.3 UPU: Quality of Service Fund, objectives and measurement issues
32
3.2 The national QoS framework and performance in the EU
33
3.2.1 Product portfolio of the national universal service providers in the EU
33
3.2.2 Definition and setting of national QoS objectives in the EU
39
3.2.3 Performance and measurement of QoS in the EU
62
3.2.4 Consequences of missing quality of service objectives
89
3.2.5 Publication of quality of service issues
91
3.3 National QoS framework and performance in the Accession Countries
92
3.3.1 Universal postal services and other services
92
3.3.2 Objectives, performance, and applied measurement methods
95
3.3.3 Consequences of failure
109
II
Quality of Service Objectives, Performance and Measurement

in Relation to Community Universal Postal Service
3.3.4 Publication
111
3.3.5 Status of QSF concerning the Accession Countries
111
3.4 Summary: status quo and resulting opportunities
113
3.4.1 Legal transposition of the Postal Directive
113
3.4.2 Scope and depth of QoS regulation
117
3.4.3 QoS performance
130
3.4.4 Sum-up: Potential adjustments of intra-Community and national QoS

regulation
137
4 Analysis of QoS regulation on national and Community levels feasibility of

regulatory amendments
139
4.1 Transit time
140
4.1.1 QoS regulation, costs and demand for postal services
140
4.1.2 Analysis of objectives and performances
144
4.1.3 Objective definition and compatibility on national and Community level
196
4.1.4 Transit time and demand
212
4.2 Measurement of Quality of Service
217
4.2.1 Transit time measurement of single-piece items
218
4.2.2 Transit time measurement of bulk mail
227
4.2.3 Loss and damage of mail
229
4.2.4 Treatment of complaints
231
4.2.5 Customer satisfaction surveys
235
4.2.6 Standardisation perspectives
237
4.3 Deriving feasible opportunities for future QoS policies

5 QoS regulation against market developments
245
249
5.1 Development of the EU postal markets: from monopoly to competition
249
5.2 Rationale for QoS regulation
251
5.2.1 QoS regulation in monopolistic markets
251
5.2.2 QoS regulation in competitive markets
252
5.3 Consequences for QoS regulation in (stepwise) liberalised postal markets
257
Final Report
6 Conclusions, policy guidelines and recommendations
III
261
6.1 Conclusions
261
6.2 Policy guidelines and derivation of recommendations
263
6.2.1 Policy guidelines
263
6.2.2 Derivation of recommendations
265
6.3 Level of implementation
278
6.3.1 Regulation on Community level
278
6.3.2 Regulation on national level
279
6.4 Next steps

References
281
283
IV

Tables
Table 2-1:
Number of distributed questionnaires and return
17
Table 3-2:
Weight limits of the universal service (in kg)
34
Table 3-3:
Transit time and service definition
36
Table 3-4:
Regulatory transit time objectives for domestic priority or 1st class mail
in 2003
41
Table 3-5:
Transit time objectives for packages and parcels in 2003
44
Table 3-6:
Transit time objectives for other domestic postal items in 2003
46
Table 3-7:
Transit time objectives in the UK
47
Table 3-8:
Queuing time objectives and performance in 2002
80
Table 3-9:
Handling of complaints in Portugal
86
Table 3-10:
Explicit redress procedures in Ireland
87
Table 3-11:
Scope of universal service (in kg)
93
Table 3-12:
Regulatory and voluntary transit time objectives for domestic

1st class mail (2002)
96
Table 3-13:
Transit time objectives and performance for non-priority mail
97
Table 3-14:
Regulatory transit time objectives and performance (as far as

measured and published) for domestic parcel services (2002)
Table 3-15:
Regulatory and voluntary transit time objectives for cross-border

mail services
Table 3-16:
98
98
Transit time performance of single-piece cross-border mail.

Results from UNEX Lite (full year results, 2002)
99
Table 3-17:
Independent monitoring implemented in 2002 (domestic priority mail)
100
Table 3-18:
Measurement method approved by NRA?
100
Table 3-19:
Additional requirements regarding post offices
102
Table 3-20:
Delivery conditions
103
Table 3-21:
Responsibility for setting regulatory QoS objectives (NRA-answer)
109
Table 3-23:
Legal commitment to publish
111
Table 3-24:
Actual publication of QoS issues by USPs
111
Table 3-25:
Transposition of the Postal Directive
114
Table 3-26:
Regulatory objectives and requirements in the Accession Countries
120
Final Report
Table 3-27:
Focus of transit time objectives within the universal service in

the Member States (coverage in % of USPs providing the service)
Table 3-28:
120
Scope and depth of transit time regulation within the universal service
in the Member States
Table 3-29:
123
Scope and depth of regulation of further important QoS aspects in

the Member States
126
Table 3-30:
Transit time performance in the present MS and the AC
131
Table 4-1:
Descriptive statistic of intra-Community cross-border transit time

performance (country-to-country relations)
Table 4-2:
Feasibility of a revised intra-Community cross-border objectives

D+2: 80% and D+4: 97% in the view of the MS
Table 4-3:
158
Feasibility of a revised intra-Community cross-border objectives

D+2 80% and D+4 97% in the view of the AC
Table 4-4:
145
159
Implementation year of regulatory transit time objectives for domestic

postal services in the EU (including EEA countries Norway and Iceland
in parentheses)
Table 4-5:
172
Under- () and over-performance () vs. regulatory objectives

1998-2002 (1st class mail)
176
Table 4-6:
Application of EN 13850
221
Table 4-7:
Timeline for full transposition of EN 14012
233
VI

Figures
Figure 1-1:
Structure of the study
Figure 2-1:
QoS dimensions relating to postal services
Figure 2-2:
Scope of the analysis
13
Figure 2-3:
Levels of the analysis
13
Figure 2-4:
Point of views in the perception of quality of postal services
14
Figure 3-1:
Organisation of TC331
27
Figure 3-2:
Services provided within the universal service
35
Figure 3-3:
Provision of 2nd class mail
36
Figure 3-4:
Possiblities of work sharing (number of Member States concerned)
37
Figure 3-5:
Provision of value added services
38
Figure 3-6:
Services outside the universal service
39
Figure 3-7:
Extent of regulatory transit objectives in the Member States
40
Figure 3-9:
Regulatory D+1 objectives for domestic 1st class mail in the EU States
in 2003
43
Figure 3-10:
Transit time objectives for packages and parcels
43
Figure 3-11:
Transit time objectives for other domestic postal items within

the universal service
45
Figure 3-12:
Objectives with respect to loss of mail in 2003
48
Figure 3-13:
Measurement of lost mail
49
Figure 3-14:
Regulatory requirements with respect to the access to the postal network
50
Figure 3-15:
Maximum queuing time as QoS objective
51
Figure 3-16:
Deliveries per week
52
Figure 3-17:
Information provision
54
Figure 3-18:
Statutory points of contact
55
Figure 3-19:
Maximum handling times of complaints as QoS objectives
56
Figure 3-20:
Maximum handling time objectives for domestic mail (in days)
57
Figure 3-21:
Use of customer satisfaction surveys by the USP
58
Figure 3-22:
Organisation responsible for setting regulatory QoS objectives
59
Figure 3-23:
Involvement of important stakeholders in the definition process of

regulatory QoS objectives
60
Final Report
Figure 3-24:
Other postal operators providing universal services
Figure 3-25:
Intra-Community overall performance in D+3 (single piece items of
VII
62
correspondence of the fastest standard category)
63
Figure 3-26:
Average delivery days intra-Community cross-border mail
63
Figure 3-27:
Cumulative performance in 2002
64
Figure 3-28:
Share of bilateral mail flows meeting the cross-border D+3 objective

in 2002
Figure 3-29:
Country-specific number of bilateral relations missing the objective

in 2002
Figure 3-30:
66
Objectives and performance for domestic 1st class mail with respect to
reliability
Figure 3-32:
65
Transit time objectives and performance for domestic 1st class mail
(D+1)
Figure 3-31:
65
67
Transit time objectives and performance for domestic 2nd class mail
(D+3) in 2002
68
Figure 3-33:
Transit time objectives and performance of parcels
69
Figure 3-34:
Transit time objectives and performance for direct mail in 2002
70
Figure 3-35:
Regulatory transit time objectives and performance in 2002 for

other domestic services
Figure 3-36:
Organisation responsible for the measurement of transit time of

1st class letter items
Figure 3-37:
71
72
Characteristics of the sample design for the transit time measurement

of domestic 1st class mail
74
Figure 3-38:
Types of induction
75
Figure 3-39:
Definition of loss and/or substantial delay of domestic priority mail

in days
76
Figure 3-40:
Monitoring of access objectives
78
Figure 3-41:
Modes of delivery
81
Figure 3-42:
Effective monitoring of delivery obligations
82
Figure 3-43:
Channels of information provision
83
Figure 3-44:
Assessment of the transparency and clarity of provided information
84
Figure 3-45:
Initial acknowledgement reply
84
Figure 3-46:
Categories of complaints
85
Figure 3-47:
Spreading of complaints in 2002
86
VIII

Figure 3-48:
Issues of customer satisfaction surveys
87
Figure 3-49:
Application of other QoS measures
89
Figure 3-50:
Threat of regulatory consequences in the view of the stakeholders
89
Figure 3-51:
Kind of penalties in case of transit time failure
90
Figure 3-52:
Issues of publications
92
Figure 3-53:
Scope of domestic universal postal service
94
Figure 3-54:
D+1 objectives and performance of domestic first class services

in the AC (in %)
97
Figure 3-55:
Measurement requirements of lost postal items within the AC
101
Figure 3-56:
Number of outlets and street letter boxes per 10.000 inhabitants
102
Figure 3-57:
Information provided by the USP
104
Figure 3-58:
Current use of information channels
105
Figure 3-59:
Quality of information in the view of the NRAs
105
Figure 3-60:
Legally required points of contact
106
Figure 3-62:
Standardised handling of complaints
106
Figure 3-63:
Voluntary handling time objectives of the USP
107
Figure 3-64:
Use of customer satisfaction surveys in the AC
108
Figure 3-65:
Involvement of interest groups in the objective setting procedure
108
Figure 3-67:
Existence of penalties in case of failure to meet QoS objectives and

requirements
110
Figure 3-68:
Penalties with regard to the different quality dimensions
110
Figure 3-69:
Use of QoS fund by the Accession Countries (in thousand $,

status March 2003)
112
Figure 3-70:
Deriving potential opportunities
113
Figure 3-71:
Important aspects of postal services in customers view
118
Figure 3-72:
Regulatory QoS objectives in postal markets
119
Figure 3-73:
Customers satisfaction with different aspects of postal services
131
Figure 4-1:
Analytical framework
141
Figure 4-2:
Intra-Community cross-border transit time D+3 performance on

country-to-country relations
Figure 4-3:
145
Intra-Community cross-border D+5 transit time performance on

country-to-country level (based on IPC UNEX FY 2002)
146
Final Report
Figure 4-4:
Expected year of achieving the overall intra-Community cross-border

transit time objectives (D+3 85% and D+5 97%)
Figure 4-5:
IX
147
Intra-Community cross-border transit time performance and

relative country location for under-performing country-to-country
relations (2002)
Figure 4-6:
149
Intra-Community cross-border transit time performance and

relative country location for bilateral mail flows (all MS and without
EL and ES, 2002)
150
Figure 4-7:
Transit time and transport of cross-border mail
151
Figure 4-8:
Transit time and transport of cross-border mail: Upgrading D+3 to D+2
160
Figure 4-9:
Set of potential intra-Community cross-border transit time objectives
165
Figure 4-10:
Distribution of bilateral mail flows depending on cross-border transit time

performance in relation to a D+2 intra-Community cross-border objective
Figure 4-11:
166

performance in relation to an adjusted D+3 intra-Community cross-border
objective
Figure 4-12:
167

performance in relation to an upgraded D+5 intra-Community cross-border
objective
Figure 4-13:
168

performance in relation to an adjusted D+5 intra-Community cross-border
objective
168
Figure 4-14:
Distribution of cross-border mail volumes related to bilateral mail flows
170
Figure 4-15:
Regulatory objectives (priority mail) and published performance in the

European Community since 1998
Figure 4-16:
173
Deviations from regulatory transit time objectives (priority mail) in 2002

(with and without EL)
174
Figure 4-17:
Measurement method (single piece and / or bulk mail)
176
Figure 4-18:
Interrelation between transit time performance and population density

(with and without EL)
Figure 4-19:
Interrelations between transit time performance, population density, and

degree of urbanisation (with and without EL)
Figure 4-20:
Figure 4-21:
180
182
The interrelationship of D+1 transit time performance, population density

and degree of urbanisation
184
Stylised structure of a national postal network
186
Figure 4-22:

The interrelationship between transit time performance and mail

volume per capita (with and without EL)
Figure 4-23:
188
The interrelationship between the QoS environment index (based on

country size, population density, degree of urbanisation and domestic
mail volume per capita) and D+1 transit time performance in the EU
Figure 4-24:
190
The interrelationship between the QoS environment index and D+1

transit time performance in the MS, the AC as well as Norway and
Iceland
191
Figure 4-25:
198
Figure 4-26:
Transport of incoming cross-border mail
198
Figure 4-27:
Interrelation between incoming cross-border and domestic transit time

performance (D+3 and D+1 respectively) in 2002 with and without
Greece
Figure 4-28:
200
Interrelation between outgoing cross-border and domestic transit time

performance (D+3 and D+1 respectively) in 2002 (with and without
Greece)
Figure 4-29:
Change in D+3 cross-border transit time performance 1998-2002

with respect to outgoing and incoming cross-border mail (Spain)
Figure 4-30:
206
Incoming cross-border transit time (D+5) performances average

figures (2002)
Figure 4-32:
204
Change in cross-border transit time performance 1998-2002 with

respect to outgoing and incoming cross-border mail (Greece)
Figure 4-31:
201
208
Example for the distribution of cross-border mail in the country of

destination
209
Figure 4-33:
Degree of satisfaction and importance with respect to transit time (MS)
214
Figure 4-34:
Awareness of selected transit time standards and their implications

Figure 4-35:
220

in the Accession Countries
222
Figure 4-36:
Intended adoption of EN 13850 in the AC
223
Figure 4-37:
Implementation of CEN standard EN 14012
232
Figure 4-38:
Awareness of the CEN-Standard EN 14012 in the AC
233
Figure 4-39:
Possibility of mandatory customer satisfaction surveys in the view
Figure 4-40:
of the NRA
236
CEN standard for customer satisfaction measurement
236
Final Report
XI
Figure 4-41:
European standardisation in the operators and regulators view
238
Figure 4-42:
European standardisation in the view of customer organisations
239
Figure 4-43:
Customers representative organisations' awareness of adopted

CEN standards
Figure 4-44:
Assessment of additional CEN standards interesting for

implementation?
Figure 4-45:
240
241
Importance of additional CEN standards in the view of customers

representatives
241
Figure 4-46:
Importance of new CEN work items in the stakeholders view
244
Figure 5-1:
Impact of liberalisation on cross-border transit time in the view of

USPs and NRAs (Member States)
254
XII

List of acronyms and abbreviations

AC
ANEC
B2B
B2C
BEUC
C2B
C2C
ca.
CEN
Commission
D+n
EEA
ECJ
Ecu
EFTA
EMOTA
EN
EPG
EPSI
EU
FAEP
FEDMA
GATS
GDP
IPC
IT
MS
NRAs
OCR
O.J.
OoE
p.a.
PLC
P.O. boxes
Postal Directive
QoS
QSF
REIMS
Sq. Km
TC
Accession Countries
European Association for the Co-ordination of Consumer Representation in
Standardisation (www.anec.org)
Business to Business
Business to Consumers
The European Consumers' organisation (www.beuc.org)
Consumers to Business
Consumers to consumers
Circa
European Committee for Standardisation
European Commission
(http://europa.eu.int/comm/internal_market/post/index_en.htm)
Delivery n days after posting
European Economic Area
European Court of Justice
European Currency Unit
European Free Trade Area
European Mail Order and Distance Selling Trade Association
(www.emota-aevpc.org)
Official European Standard
Parcel service guarantying a day-certain delivery
European Performance Satisfaction Index
European Union
European Federation of Magazine Publishers (www.faep.org)
Federation of European Direct Marketing (www.fedma.org)
General Agreement on Trade in Services
Gross Domestic Product
International Post Corporation (www.ipc.be)
Information Technology
Member States
National Regulatory Authorities
Optical Character Recognition
Official Journal (of the European Communities
Office of exchange
Per annum
Public Liability Company
Post Office boxes
97/67/EC Directive amended by the 2002/39/EC Directive
Quality of Service
Quality of Service Fund of the UPU
Remuneration of Exchanges of International Mail System
Square kilometre
Technical Committee within CEN
Final Report
TC331
ToR
TS
UNEX
UPU
USOs
USA
USPs
WTO
CEN Technical Committee dealing with postal services

(http://www.nen.nl/cen331/)
Terms of reference
Technical Specification
Unipost External Monitoring System
Universal Postal Union (www.upu.int)
Universal Service Obligations
United States of America
Universal Service Providers
World Trade Organisation
Country Codes
AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FR
HU
IE
IS
IT
LT
LU
LV
MT
NL
NO
PL
PT
RO
SE
SF
SK
Sl
TR
UK
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Germany
Denmark
Estonia
Greece
Spain
France
Hungary
Ireland
Iceland
Italy
Lithuania
Luxembourg
Latvia
Malta
The Netherlands
Norway
Poland
Portugal
Romania
Sweden
Finland
Slovakia
Slovenia
Turkey
United Kingdom
XIII
Final Report
Executive Summary

This study offers the first survey of quality of service (QoS) objectives, performance and
measurement in the present Member States (MS) as well as in the ten Accession
Countries (AC), that will join the European Union in May 2004.1
QoS regulation: status and latest developments
The Postal Directive2 aims at improving quality of postal service, to foster the
establishment of the internal market for postal services, to set the appropriate regulatory
framework for this major reform and to allow postal operators to adapt to their changing
commercial environment. To this end the Postal Directive provides for QoS rules and
regulations. These are generally defined as minimum requirements for the provision of
postal universal services. However, except for intra-Community cross-border transit
time objectives within the Postal Directive there is no precise specification of these
rules. This is left to the MS. Thus, as long as the general framework provided for in the
Postal Directive is respected the MS have the opportunity to reflect their national
characteristics and needs in setting national QoS objectives.
Since the enforcement of the Postal Directive some significant developments have been
taking place. Today a wide range of QoS objectives and requirements can be observed
on national level. In most countries the domestic transit time performance of priority or
1st class letters have significantly been enhanced. The average performance of intraCommunity cross-border transit time has considerably improved since 1998.
The European Standardisation Committee (CEN) has been entrusted with developing
European measurement methods (standards) for a number of aspects concerning the
quality of postal services. These CEN standards for postal services have been
developed by a dedicated Technical Committee within CEN (TC331). So far, there are
five European standards available for a harmonised QoS measurement of various
aspects of the quality of postal services (transit time, loss, complaints and redress
procedures).
Future challenges
Discussing objectives, requirements and measurement methods for the quality of the
universal postal service within the EU, the changing environment due to the
enlargement process should be taken into account.
1 The AC are Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak
Republic, and Slovenia.
2 97/67/EC Directive amended by the 2002/39/EC Directive.
ii

Furthermore, some national postal markets of the MS increasingly allow for competition.
This liberalisation tendency is additionally stimulated by the enactment of the Directive
2002/39/EC. This Directive further reduces the weight and price thresholds which form
the reservable area of the European postal market.
Moreover, some USPs face decreasing mail volumes due to mail substitution. Changes
in demand of universal services due to competition or changes in customers
preferences have to be taken into account when the scope and depth of QoS regulation
is reconsidered.
Purpose of the study
The purpose of this study is to provide a systematic review and analysis of the current
QoS regulation and actual QoS performance both on national (member states and
accession countries) and Community levels in order to derive recommendations for
future QoS regulation and practices.
Scope and methodology

QoS regulation and practice encompasses different characteristics of postal services
provision. The Postal Directive stresses the importance of the transit time as well as the
reliability and regularity. Additionally, the Directive requires the existence of simple and
inexpensive procedures for the handling of complaints. Moreover, national QoS
regulation should be compatible with the objectives laid down for intra-Community
cross-border services.
The study identifies and analyses differences and similarities between the MS and the
AC with respect to the specification of the general requirements of the Postal Directive.
It derives potential opportunities for future QoS regulation with respect to objectives,
performance and measurement methods on Community as well as on national level.
The feasibility of these opportunities is investigated by identifying and comparing costs
and benefits of each opportunity on a qualitative level. A special focus is laid on the AC
and their ability to adopt current as well as future QoS requirements. Recommendations
are derived by balancing between consumers and customers needs, cost effects faced
by the universal service provider (USP), changing postal market conditions due to mail
substitution and liberalisation, and the objectives of the Postal Directive. On the basis of
this analysis the study finally specifies further steps to be taken.
Regulation in general and QoS regulation in particular has to weigh up the interests of
the regulated organisations on the one and the needs of the customers on the other
hand. Assessing the existing QoS regulation and deriving future steps these different
points of view have to be taken into account. Thus, the opinions and experiences of the
relevant stakeholders, comprising national regulatory authorities (NRA), universal
service provider (USP), and in particular consumer and business associations, form part
of the basis of the recommendations given in the study.
Final Report
iii
Hence, this study is based on following sources of information.
All USPs and nearly all national regulatory authorities (NRAs) of the present MS,
Norway and Iceland as well as of the ten AC completed detailed questionnaires
prepared by WIK-Consult.
A high number of consumer and business associations in all MS and AC were

asked to complete a questionnaire or at least to provide information about
experiences with postal services in their countries.
WIK-Consult conducted personal interviews with representatives of USPs and NRAs

of 7 selected MS and 9 AC3.
Interviews and discussions with postal experts inter alia of IPC4 and CEN/TC331 as
well as the Customers needs taskforce of CEN were conducted.
Finally, hypotheses and outcomes of the study were discussed in an expert panel
and two public workshops.
Since the applied methodology required substantial input from all parties listed above,
important difficulties arose for our analysis from a very low return rate of the consumer
and business associations. Consequently, the analysis and the derived
recommendations remained to a certain extent incomplete. Without opinions and
experiences of consumers and business customers potential conclusions associated
with a strong impact on costs and prices could not be drawn neither on national nor on
Community level.
Main results of the analysis

The Postal Directive principally only lays down minimum standards. This policy is
reflected by differences in the scope and the depth of national QoS regulation between
the MS. For example, the level of transit time objectives as well as their range differs
between the countries. Whereas Sweden has merely set a low transit time objective for
1st class mail, the Portuguese NRA has set transit time objectives for almost all
universal services even if they are not part of the reserved area. Such a range is also
identified for other QoS issues, e.g. access to the postal network and the measurement
of lost items.
3 Carried out in the course of another EU-study Survey on some main aspects of postal networks in EU
adhesion candidate countries conducted by WIK-Consult on behalf of the European Commission, DG
Internal Market
4 The International Postal Corporation (IPC) is responsible for the measurement of cross-border transit
times. It is a cooperative association of 23 national universal service provider.
iv

Compliance of national QoS objectives and requirements with the Postal Directive
Although different scopes of QoS regulation can be observed in the MS, compliance
with the Postal Directive is widely given. Nonetheless, some problems affecting
compliance have been identified. With respect to cross-border transit time objectives
Greece has currently an objective definition which does not correspond to the
Community objective. Furthermore, the Spanish operator does not provide a 1st class
domestic mail service which might interfere with the cross-border transit time objective.
The implemented complaint and redress procedures are differently regulated and
organised in the present MS. There are differences in handling time, use of
acknowledgement replies, and the definition of the formal contact points.
Loss and damage of postal items is a very important issue in the view of postal
customers. Objectives or even requirements to measure the number of lost items are
only set in a minority of the present MS.
One important incentive to meet the objectives is the publication of related
performances. The Directive requires the publication of QoS objectives and
performances as well as information on the number of complaints and the manner in
which they have to be dealt with. In some MS publication of these issues does not take
place yet. Besides the publication a clearly defined system of sanctions in case
operators fail to meet the objectives could be an effective incentive mechanism. In most
MS these systems are not sufficiently transparent so that even the USPs are not well
informed about potential consequences of missing objectives and requirements.
In the AC the degree of compliance is in general lower compared to the MS. It ought to
be taken into consideration that the adoption process of their national postal legislation
is still not finalised.
Even if compliance with the Postal Directive is not guaranteed on the objective level, the
actual performance could mitigate this shortcoming. Since the Postal Directive has
come into force domestic as well as cross-border transit time performance has
significantly improved in most MS. Nonetheless, in some USPs the performance with
respect to domestic postal services remains low (e.g. France, Belgium, and Greece).
Measurement methods
The performance highly depends on how it is measured. Currently the applied methods
for transit time measurement differ between the MS. Therefore, the comparability of the
performance figures is limited. Nonetheless, in case that regulatory objectives are set
the measurement is carried out by an independent institution. In the present MS the
applied methods are approved by the NRA in case that the USP is responsible for the
measurement.
Missing transparent and independent measurement is one of the main problems in the
majority of the AC. The methods are often not approved by the NRAs. This is mainly
due to financial restrictions, an ongoing legislative process as well as to a lack of
Final Report
manpower. This fact hampers the identification of the actual development status of the
postal networks and impedes the comparison with the present MS.
Results of the analysis
Based on the comparative assessment a set of opportunities for future QoS regulation
and practice has been identified. They cover QoS objectives, performance and
measurement in relation to a number of QoS aspects: domestic and cross-border transit
time, loss of mail, complaints and redress procedures, incentive structure (publication
and sanction systems) and the involvement of postal customers in the procedure of
setting QoS objectives and requirements as well as in the development of measurement
standards.
The possibilities to amend the current intra-Community cross-border objectives
(upgrading and/or adjustment) have been discussed in detail. Additionally, the feasibility
of the current intra-Community cross-border transit time objectives within the enlarged
EU has been analysed.
The current cross-border objectives are seen as feasible for the present MS as well
as for the AC. Currently, especially Spain and Greece must improve their cross-border
transit times in order to meet their legal obligations. This is considered to be feasible as
soon as the USPs endeavour to get rid of the problems related to their domestic postal
networks.
Logistical problems between the present MS could not be identified. But these problems
are relevant for the country-to-country relations between the AC themselves as well as
between the AC and the present MS. Before deciding on a transition period for the AC,
information about their actual transit time performance is needed. Currently, this
information is not available because cross-border transit time measurement is not
carried out for all bilateral mail flows. Consequently, a reliable measurement system
should be implemented before a final decision is made on the necessity of a transition
period in some AC.
With respect to the MS the amendment of the current cross-border transit time
objectives is discussed. Due to a lack of information about quantitative cost and
demand effects a final conclusion about the feasibility of the particular opportunities
could not be drawn. With respect to the expected strength of cost effects either an
adjustment of the D+5 objective (e.g. D+5 99%) or an adjustment/upgrading of all
objectives for selected bilateral mail flows could come into question.
Furthermore, the compatibility of domestic and cross-border transit time
objectives and performances has been analysed. Mainly country-to-country relations
including Spain or Greece missed the D+3 objectives in the last year. Whereas in
Greece problems in the national postal network seems to be responsible for lowperforming cross-border and domestic transit times in Spain a D+1 service is still not on
offer. Against this background the Spanish operator should consider introducing a D+1
service in order to facilitate compatibility with the cross-border transit time objectives.
vi

Besides the compatibility of the speed objectives the relationship between the
supplementary reliability objectives for domestic and cross-border 1st class mail (e.g.
D+2 or D+3 objectives) has been analysed. Except for four countries all MS have set
respective objectives. Even without a domestic transit time objective their cross-border
transit time performance meets the D+5 objective. In case that D+1 performance at
domestic level and D+3 performance at cross-border level is presently good, regulatory
objectives seem not to be necessary in order to be compatible. With respect to the AC a
supplementary reliability objective is reasonable. Additional costs due to measurement
are not expected in case measurement already takes place.
The past and expected future development of the transit time performance with respect
to 1st class mail supports the opportunity to implement more aligned domestic D+1
objectives in all MS. The interrelationship between geographical as well as
demographic factors and the domestic transit time performance has been analysed.
Based on this partial analysis it seems that the higher the population density and the
higher the degree of urbanisation the higher is the transit time performance. However,
there are some important outliers. This outcome clarifies that even in case of
unfavourable geographical and demographical conditions efforts could be made to
overcome these restrictions. Nonetheless, these results should be cautiously
interpreted due to shortcomings in the data. In particular the transit time performances
which are measured by even slightly different methods are not completely comparable.
The USPs of Spain, Greece, France and Belgium should consider to improve their
domestic transit time. Provided that an improved transit time corresponds to postal
customers needs and is reflected by a higher willingness to pay, investments in the
postal network could be feasible.
Recommendations and next steps

In order to judge the feasibility of the identified opportunities interdependencies between
QoS regulation, the costs faced by the USP, and the demand side have been analysed.
Thereby, we addressed the following questions: What are the effects of changes in QoS
regulation on the costs of the USP on the one hand and on the demand for universal
postal services on the other? Are there further benefits on the level of the national or
Community economy? When analysing these effects not only the present MS but also
the situation and the perspectives of the AC had to be taken into account.
Additionally, the dynamics of the postal markets have been taken into consideration.
The postal market is characterised by an ongoing change of market conditions due to
alterations in the behaviour of demand and increasing competitive pressure (mainly
other means of communication services). Each national postal market currently faces
an individual mix of these conditions due to differences in regulation, demand, and
competition. Because of the planned liberalisation of postal markets in this decade,
each MS has to balance the intensity of its regulatory intervention in the face of
Final Report
vii
increasing competition. Currently QoS regulation in postal markets mainly serves as a

substitute for missing competition. In completely liberalised markets (under competitive
circumstances) QoS regulation will more and more be an instrument to correct market
results in case of identified market failure or lack of competition. Taking all this into
consideration, the scope and depth of current and in particular future QoS regulation is
significantly touched by this development.
According to the Postal Directive QoS regulation is characterised by the setting of
minimum objectives and requirements. The derived recommendations also follow this
paradigm. In the following we outline the major QoS recommendations:
Transit time
The current intra-Community cross-border transit time objectives are considered to
be feasible. Currently, especially Spain and Greece have to improve their cross-border
transit times in order to meet the Communitys objectives.
Logistical problems constitute a limitation only in the case of the AC, since economic
integration is still underdeveloped in these countries. Thus, a transition period for the
AC should be taken into consideration. Before finally deciding on the transition period a
reliable measurement system should be implemented. It is highly probable that this
period will vary between the particular AC due to differences in their development
status.
Reliability of cross-border postal services is a very important issue in the view of the
stakeholders. In order to enhance the reliability of cross-border services an adjustment
of the D+5 objective should be taken into consideration. It is highly probable that this
adjustment has an impact on the organisation of national postal networks and the cooperation between the affected USP.
In all present MS but Spain domestic 1st class services with D+1 transit time
objectives have been implemented. In order to support the compatibility between
domestic and intra-Community cross-border objectives we recommend to consider
introducing a reliable D+1 service in Spain.
Regulatory transit time objectives are set on different levels. Against the background of
country-specific degrees of competition, geographical issues and unknown customers
preferences it is not recommended to introduce harmonised D+1 objectives.
Nonetheless, low-performing USPs should continue to improve their transit time
performance. Thereby, the operators cost has to be taken into account. High
investment costs in the national postal networks can be potentially financed by higher
prices. This requires the regulator to assess the willingness to pay of postal customers
before introducing/increasing domestic transit time objectives. This aspect is also of
major importance for the AC who mostly are still at the beginning of the catch-up
process.
viii

Regulatory transit time objectives for other than 1st class services should only be set if
there is a risk of market failure linked with a need for protection of concerned postal
customers. This could be the case for single piece 2nd class services and parcels sent
by consumers and small business customers. In general, we advice to consider a
restriction of transit time objectives to single-piece items even for 1st class services in
case services are provided under fairly competitive conditions.
Reliable and fairly comparable measurement methods are a necessary precondition to
provide reliable information about the actual transit time performance for the
stakeholders. In particular, the methods should be free of arbitrary changes. Thus, we
recommend to enforce the developed CEN-standards for transit time measurement of
priority and non-priority single-piece letters as well as bulk mail. These standards
provide a suitable basis and we suggest its application by the AC as well.
In order to balance between cost of measurement on the one hand and reliable
performance figures on the other we suggest to relate the statistical requirements to the
respective mail volumes (especially in case of low-volume cross-border mail flows).
Other important QoS issues
Measurement of lost items is an important issue in the view of the customers. As it is
very costly to get statistically accurate results, we advise to consider the measurement
of substantial delay instead of loss. This can be done as by-product of the transit time
measurement. In order to reduce the risk of excessive reactions, confidential notes to
the NRA instead of publication should be taken into consideration.
With regard to the access to the postal network we derived that consumers and small
business customers who represent a relatively small share in terms of mail volume are
most likely to suffer from an expected reduction of the number of access points. In the
course of liberalisation and increasing competition, we expect USPs to reduce the
density of the access network in order to save costs. In contrast to consumers, large
mailers have additional possibilities to send their mail.
Therefore, there will be a need for balancing between the customers needs on the one
and the resulting costs with respect to the access conditions on the other hand. This
issue should be carefully observed in the next years.
Against this background the development of measurement standards with respect to
access and delivery conditions is considered to be very important. Furthermore,
these conditions are strongly linked to the transit time perception of senders and
receivers. Currently, the transit time standards do not capture the actual access and
delivery conditions. This gap is going to be closed by a new work item of CEN/TC331
dealing with measurement standards of access and delivery conditions.
Complaints are an important medium to articulate dissatisfaction with existing services.
Especially consumers and small business customers need simple, transparent and low-
Final Report
ix
cost procedures. Otherwise they would be deterred from complaining. The USPs could
use the information to monitor their service performance. The application of the recently
adopted CEN-standard for complaints and redress procedures supports a transparent
and simple treatment and therefore is recommended to be introduced in each MS and
AC.
Incentive structure
The Postal Directive already requires that objectives and performances have to be
published regularly. By publication incentives are set to provide a satisfying QoS due to
its direct effects on reputation. Currently the way and the structure how this information
has to be provided differ between the countries. It has to be ensured that complete,
transparent, and easily accessible information will be regularly provided by the
responsible institutions. The application of already adopted CEN-standards will support
a higher transparency in the structure of published measurement results.
Sanctions are an alternative measure to set incentives for QoS provision. The survey
reveals that the sanction systems implemented on MS level are often not as transparent
as necessary. The relation between sanctions and missing QoS objectives and
requirements seems not to be clearly defined in some countries.
Linking the QoS performance to price regulation would be one possibility to ensure an
effective and simple mechanism in order to enforce QoS requirements and objectives.
We advise that the MS and the AC should take this form of target-oriented regulatory
measures into consideration.
Involvement of postal customers
Regulation as a measure for correcting market failures should take account of the
customers and consumers needs. In particular, a focus of regulation should lay on
those customer groups which hardly have any bargaining power This is most likely for
consumers and small business customers, but depending on the competitiveness of the
respective market segments this can also hold true for large mailers.
The universal service obligation is mainly set in order to protect the badly organised and
thus less powerful, but numerous consumers and small business customers. Their
needs should therefore be identified by the legislator and the regulatory authorities.
Against the background of the future postal market development and related risks, the
involvement of the associations of this group should be supported especially on national
level.
We suggest to institutionalise their involvement in order to enhance the importance of
customers needs in the process of setting QoS requirements and objectives. The
procedure how to manage this involvement highly depends on the cultural and legal
history of a country. Nonetheless, in our view transparent and open procedures should
be preferred.

The involvement of these groups is also necessary for the development of

measurement standards. In the past the development of measurement methods at
CEN-level has been more or less operator-dominated. Most of the national consumer
and business associations are even not aware of CEN. The foundation of the
CEN/TC331 customers needs task force is a step in the right direction. Additionally, we
suggest to strengthen the involvement of consumer and customer representatives on
the level of the CEN working groups.
As already outlined, the lack of information on consumer needs has restricted the extent
of recommendations. Taking account of these shortcomings we recommend the
following next steps:
Customers and in particular consumers needs and interests should be identified on

national and Community level
Reliable measurement systems as precondition for identifying the transition periods

of the AC (in relation to intra-Community cross-border transit time objectives) should
be implemented as fast as possible
The implementation of the measurement standard for complaint and redress

procedures should be enforced.
It should be emphasised that besides QoS regulation, competitive pressure is and will
become effective to guarantee a satisfying QoS provision. As far as workable
competition in postal markets will emerge the scope of QoS regulation can be more and
more reduced to those groups who may be most probably concerned by market failure
or lack of competition.
The provided assessment of potential opportunities is based on the current situation
within the existing and the future MS. As already stressed, there are ongoing changes
in the postal markets due to numerous challenges like liberalisation and changes in the
customers preferences. In particular, the adaptation of the postal infrastructure in the
AC to changes induced by the enlargement process is in full swing. Furthermore, the
application of the CEN standards will provide more reliable and comparable
performance figures in the future. Thus, a review of the situation in the present MS and
the AC should be taken into consideration at a later stage.
Final Report
Introduction
1.1
An essential objective of the 97/67/EC Directive (the Postal Directive) is to improve the
quality of Community postal services. According to Article 3, Member States are obliged
to ensure that users enjoy the right to a universal service involving the permanent
provision of a postal service of specified quality at all points of their territory at
affordable prices for all users. Against this background the Postal Directive currently
provides a general framework of quality of service (QoS) regulations. In order to
improve the quality of Community postal services, the Postal Directive includes a
number of specific provisions (listed in Art. 16 to 19) such as:
Member States shall ensure that quality-of-service objectives are set and
published in relation to universal service;
These objectives shall be set by the European Parliament and Council for crossborder services, and the Member States for national services;
The quality of service objectives shall focus in particular on transit times and on
the regularity and reliability of services;
Independent performance monitoring shall take place at least once a year under
standardised conditions.
The universal service guidelines of the Directive are currently defined as minimum
requirements. These may well be over-performed by national policies. Consequently, a
harmonisation of universal service objectives and requirements on a European level
may only be achieved with regard to the lower bound of QoS objectives. Thus, even in
case of harmonised minimum objectives and requirements the European framework
allows Member States to individually develop national QoS frameworks by setting
objectives and requirements reflecting their specific characteristics and needs.
With respect to the evolution of universal service over time, Member States are obliged
to ensure that the provision of universal services develops in response to the technical,
economic and social environment and to the needs of users. In case that customer
needs (e.g. evolution of substitute means of communications to postal services), or the
technical, and economic environment (e.g. increased technical efficiency of universal
service providers) are changing, amendments of the framework of universal service
regulation on the European as well as on the national level should have to be taken into
consideration.

QoS regulation: status and latest developments

At Community level, the Postal Directive has defined QoS objectives for transit times
concerning the fastest standard category of cross-border letter mail services (85% D+3
and 97% D+5 delivery). There are no Community QoS objectives for other services
within the universal service, such as parcel services or non-priority letter mail services.
Except for intra-Community cross-border transit time objectives concrete rules for the
scope or the intensity of QoS regulation on national level have not been set. Thus, the
specification of the general obligations laid down in the Postal Directive is left to the
national regulatory authorities and the respective national parliaments. However,
objectives and requirements set on national level should be consistent with the Postal
Directives provisions. Furthermore, the domestic and the cross-border transit time
objectives should be compatible.
In the meantime, some significant developments have been taking place.
Since 1998 the average performance of intra-Community cross-border transit

time has considerably improved (85.6% in 1998 compared with 93.5% D+3 in
2002).5 76.7% of cross-border mail has even been delivered within two days. An
intra-Community cross-border priority letter only needs 2.2 days in average
compared with 2.6 days in 1998.
On national level a wide range of QoS objectives and requirements can be

observed. In most countries the domestic transit time performance of priority or
1st class letters have significantly been enhanced.
The European Standardisation Committee (CEN) has been entrusted with

developing European measurement methods (standards), including a range of
measurement methods for a number of aspects of quality of the postal services.
The CEN standards for postal services are developed by a dedicated Technical
Committee within CEN (TC331). Now, there are five European standards
available for harmonised QoS measurement of various aspects of the quality of
postal services:
End-to-end transit time of single-piece priority and non-priority items,
End-to-end transit time of bulk mail
Complaints and redress procedures
Loss of registered mail
5 The cross-border transit time is measured on behalf of IPC using the UNEX programme. The results
are half-annually published on their homepage (www.ipc.be).
Final Report
Future challenges
The enlargement of the EU is an important ongoing Community development which
should be taken into account when considering Community objectives, requirements
and measurement methods for quality of the universal postal service. Indeed, both the
Community objectives and the standards were being defined at a time when the EU
only consisted of 12 or 15 Member States. Thus, the feasibility of current and possible
future transit time objectives of cross-border mail as well as the application of
standardised measurement methods has to be assessed against the background of an
enlarged European Union.
Some national postal markets are characterised by an increasing opening of the market
and thus allow for competition. This liberalisation tendency is additionally stimulated by
the Directive 2002/39/EC which further reduces the weight and price thresholds of the
reservable area.
Moreover, some USPs face decreasing mail volumes due to mail substitution. Changes
in demand of universal services due to competition or changes in customers
preferences have to be taken into account when the scope and depth of QoS regulation
would be reconsidered. Indeed, QoS regulation as a substitute of missing competition
has to balance between customers needs and the costs of the USPs in a changing
environment.
Objectives of the study
This study offers the first survey of quality of service (QoS) objectives, performance and
measurement in the present Member States (MS) as well as in the ten Accession
Countries (AC), that will join the European Community in May 2004.6
The purpose of this study is to provide a systematic analysis of the current QoS
regulation and actual QoS performance on national and Community level in order to
derive recommendations for future QoS regulation and practices. Based on a
comparison between the existing and future MS differences and similarities should be
identified and analysed against the background of the Postal Directives requirements.
Potential opportunities for future QoS regulation and practice on Community as well as
on national level have to be derived regarding QoS objectives, performance and
measurement methods. Their feasibility should be investigated by identifying and
comparing costs and benefits of each opportunity on a qualitative level. Furthermore,
the relation between domestic and cross-border transit time objectives should be
evaluated in detail. A special focus should lay on the AC and their ability to adopt
current as well as future QoS requirements and measurement standards (in particular
the transit time standard). Recommendations should be derived by balancing between
6 The AC are Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak
Republic, and Slovenia.

consumers and customers needs, cost effects faced by the universal service provider
(USP), changing postal market conditions due to mail substitution and liberalisation, and
the objectives of the Postal Directive. Finally, next steps should be specified based on
the recommendations as well as the problems and shortcomings identified in the
analysis.
1.2
Outline of the study
An appropriate structure is needed in order to meet the objectives of this study. The
next section describes this structure and provides a guideline through the study. Figure
1-1 summarises the main steps taken within the study.
Figure 1-1:
Structure of the study
Survey (chapter 3)
Past and actual QoS regulation, performance

and measurement on MS, AC, and Community level
Differences and similarities between MS/CC,
Compliance with the Postal Directive
Customers/Consumers view
Comparison
(chapter 3)
Potential opportunities
Costs and benefits
Impact of competition
Feasible
opportunities
Analysis
(chapter 4 and 5)
Conclusions and recommendations for QoS

practice and regulation (chapter 6)
Survey
Based on the collected information the status quo of QoS regulation, measurement and
performance has been extracted on national and Community level. In order to get a
status quo the following subjects are of special interest:
QoS regulation on Community level: scope of the regulatory framework provided for
in the Postal Directive
Final Report
QoS regulation on national level: scope of the regulatory framework implemented by

the MS and AC, identification of main subjects on national level
QoS performance: actual QoS offered by the USPs in the MS and AC, development
in time
Measurement: characteristics of applied methods and standardisation issues
Perception of current QoS in the view of postal customers
Comparison
The survey of the status quo in step one represents the starting point for the
comparative assessment in step two. This part deals with the comparison of QoS
regulation, performance and applied measurement methods between the MS, MS and
Community, as well as AC and MS/Community:
Compliance of national QoS regulation with the objectives and requirements of the
Postal Directive
QoS performance in relation to national and Community QoS regulation
Variation between the MS: identification of similarities and differences with respect
to QoS regulation, performances and applied measurement methods
Variation between the AC: state of development with regard to the adoption of the
Postal Directive and with regard to the current MS
Compliance of actual QoS with postal customers needs
Finally, a set of potential opportunities for future QoS regulation is derived based on a
comparison between the analysed countries.
Both, the survey of the status quo as well as the comparison will be carried out in
Chapter 3.
Analysis
The potential opportunities are the starting point for the next step. The interrelations
between demand, costs, and actual QoS performance are the main focus of the
analysis. Against this background it will be analysed if the potential opportunities are
feasible.
Are the national and cross-border QoS objectives compatible?
Do country-specific factors like size or degree of urbanisation support or hinder a

high QoS performance?

Are the national postal networks appropriate to ensure the favoured QoS level?
Does a demand for higher quality of postal services exist which justifies the costs of
quality improvements?
In what way does QoS regulation affect the structure of postal networks and the
demand for postal services?
Could current problems of monitoring QoS objectives and requirements be

resolved?
Additionally, this part of the study deals with measurement methods of QoS and
discusses whether standardised Community methods are qualified for measuring the
particular QoS objectives in a suitable way. The analysis encompasses the situation of
the Accession Countries and finally highlights the question whether minimum
requirements or high level objectives are more appropriate. The analysis concludes with
a list of feasible opportunities for future QoS regulation.
The analysis of potential opportunities with respect to QoS objectives and requirements
as well as the discussion on measurement methods and standardisation issues will be
carried out in Chapter 4.
Analysing the need for QoS regulation against the background of ongoing market
changes is a further element of the analysis. The USPs face challenges arising from the
opening of the postal market. Mail substitution as a result of the increasing use of
electronical devices (e-mail, internet, SMS) may additionally reduce mail volumes. This
may have an negative impact on the financial situation of the USPs and thus will result
in a pressure on costs.
Against this background the study raises the question whether the future market
development has an impact on the scope and depth of QoS regulation. Especially the
following questions will be dealt with:
Does competition guarantee a high QoS level for all users?
What are the relations between QoS and the process of mail substitution and with a
more intense competition?
Should QoS regulation be reduced step by step against the background of ongoing
liberalisation?
What QoS dimensions could be subject of market failure in the future postal
markets?
The discussion of these aspects can be found in Chapter 5.
Final Report
Deriving recommendations for future QoS regulation

Finally, the report draws main conclusions from the data and analysis and derives
recommendations for future QoS regulation. Built on the considerations of market
evolution and the feasible opportunities obtained as result of the analysis the study
concludes with deriving policy guidelines and recommendations for the upcoming QoS
regulation within the Community. Inter alia, this last part of the study discusses the
question whether there is a need to protect all postal customers by regulation. Could
private arrangements solve existing market failure, so that a workable competition with
satisfactory postal services would be achieved without regulatory interventions?
Before starting with the report, the scope of the study, necessary definitions and the
applied methodology will be described in the next section.
Final Report
Scope and methodology of the study
2.1
Scope
Services, especially postal services, are characterised by a multitude of dimensions.

Some of these dimensions are regulated by the universal service obligation. Dependent
on the part of the postal value chain that is looked at several different aspects of postal
service quality are involved. Within the study the focus is on universal postal services as
defined by the European Postal Directive.
Providing postal services involves the collection, sorting, transport and delivery of
addressed items including items of correspondence, books, newspapers, periodicals
and parcels. The definition of universal postal services covers several additional
dimensions: these concern the postal items, the structure of the postal network and the
important service characteristics.
From the scope of the Community universal service the following quality dimensions
can be derived. These will be discussed in the study (see Figure 2-1).
Figure 2-1:
QoS dimensions relating to postal services

Reliability
Loss and damage
of postal items
Transit time
Collection
Mode and time

Location (density)
Retail service
Supply of and
access
to information
Sorting
Transport
Sorting
Delivery
Treatment of
complaints and
redress
procedures
Mode and time

Frequency
(daily,weekly)
Most of the postal services are characterised by the fact that postal users are usually
not able to monitor the actual quality; they have to trust in the promises of the providers.
Therefore, the reputation of postal services in general and of postal operators in
particular plays a key role in the decision on the use of postal services in a country.
All postal users senders as well as addressees should at minimum be able to
access postal services at a quality that is defined in the universal service obligation. In
10

using postal services postal customers rely on the delivery of their letters and parcels
within a specified time frame to the correct addressee. Therefore, this general, but most
important objective touches all other quality dimensions related to postal service
provision. The interaction of these dimensions results in a certain degree of reliability
perceived by the customers.
Reliability of postal services implies avoiding loss and damage of mail as far as possible
and a transit time which meets customers needs. Therefore, providing highly reliable
postal services means to organise the network of postal services in a way that it covers
the complete postal value chain from collection to delivery with all the different QoS
dimensions. In the following the different QoS dimensions are briefly described.
Loss and damage of mail

Postal users rely on postal items being carefully treated and conveyed to the
intended destination. Dependent on the number of posted items the sender is
usually not able to observe if the postal service is successfully carried out or not.
Transit or routing time

The actual routing or transit time of a letter or parcel depends on the network
structure as well as the organisation of postal service operations. Usually, postal
operators offer postal services with different transit time objectives (e.g. priority and
non-priority postal services). Meeting the agreed transit time objectives is one of the
main indicators for reliable postal services from the viewpoint of the operators as
well as of the customers. In the study transit time objectives and performance for
domestic as well as cross-border postal services are surveyed. In contrast to
domestic postal services the transit time performance of cross-border services
depends on more than one postal operator. The Postal Directive and other supranational agreements aim at improving the cross-border transit time performance by
setting and monitoring cross-border transit time objectives.
Besides the characteristics of the quality of service with respect to the complete postal
value chain, the quality of service of each interface between senders/recipients and
the universal service provider underlies separate regulations. They are defined as
minimum standards by the Postal Directive and are specified in detail by the European
Member States.
Mode of collection
Items can be inserted into the postal network by using street letter boxes or post
offices (including sorting centres). In rural areas postmen and to a lesser extend
mobile post offices as substitute for small post offices also accept letters as well as
parcels and sell stamps.
Final Report
11
Location of the collection unit

Rules about the coverage of post offices often depend on density criteria (population
density, building density). Sometimes the minimum number and the type of
organisation of these access points are also determined.
Time of collection
Apart from a high density of access points the time of collection also influences the
quality of access. In this context the latest collection time which allows for the next
day delivery is the most important criteria. With regard to post offices the opening
time is a relevant criteria.
Service quality of postal offices

Examples for service quality of post offices are waiting time, appearance, quality
level of consultancy and politeness of the employees. Are there differences between
service quality in retail outlets managed by the postal provider and service quality
provided in agencies? Which postal services can be demanded in which kind of
outlet?
Supply of information and access to information

The information criteria includes several aspects concerning the interfaces between
the postal user and the postal network, e.g. the clearance time of letter boxes,
information brochures about the product portfolio of the postal provider, a
transparent and comprehensive price structure or information about the postal
codes.
Delivery
Frequency of delivery
Currently, Great Britain is the only European Member State where the universal
service provider voluntarily delivers postal items twice a day.7 In most of the
European countries postal items are delivered six times a week (including Saturday
delivery) whereas the EU Directive only requires a minimum frequency of delivery of
five times a week (excluding Saturday).
Time of delivery
The Next day delivery objective does not say anything about the daytime of
delivery. Especially for business recipients an early delivery plays an important role.
However, usually it is not guaranteed that the mail is delivered before midday. That
is the reason why businesses often use P.O boxes where the mail is delivered early
in the morning.
7 Due to cost considerations Consignia plans to finish the second delivery service.
12

Mode of delivery
Usually there are two types of delivery: door and P.O. box delivery. The standard
way to distribute letters in all Member States and also in the Accession Countries is
the delivery to the premises of the addressee. Dependent on the topographical
situation, population density and the length of access time exceptions are possible.
In some states curbside delivery is also possible. In this case the letter boxes are at
the edge of the street.
Besides these quality aspects which are directly related to the whole or to the edge of
the postal value chain it is also an important question how to treat customer complaints
if the provision of a service failed. Is a person or institution defined by the organisation
that is responsible and can be talked to? How long is the reaction time? Are there
explicit rules and routines to treat such complaints?
All these different quality aspects are an essential part of the QoS frameworks on
Community and national level. While the Postal Directive only sets the minimum
conditions, the Member States (MS) are obliged to specify these rules according to their
specific needs and circumstances. The study gives an overview of the applied QoS
frameworks within the current as well as the future Member States (Accession
Countries, AC) which may join the European Community in 2004. The comparison of
the different national frameworks to one another and in relation to the Community
universal postal service conditions set out in the Postal Directive is one of the main
objectives of the study.
The QoS frameworks comprise QoS regulation, measurement issues and actual
performance of concerned QoS dimensions. QoS regulation is more than only setting of
clearly defined QoS objectives. Transit time objectives or waiting time in post offices are
examples for those objectives. In most cases more general requirements are set for
example with regard to the density of access points (street letter boxes and post offices)
or information and complaint issues. Sometimes only measurement of specified issues
is required by regulation without specifying a concrete objective (e.g. measurement of
lost items).
Besides, QoS regulation includes requirements about publication and complaint issues.
QoS regulation additionally sets incentives to guarantee the compliance with QoS
objectives and requirements. In case of missing QoS objectives and requirements the
QoS regulation may provide instruments to penalise the USP.
Additionally, the study will focus on the measurement and monitoring of QoS objectives
and requirements. In this context the development of European measurement
standards plays a key role. As far as QoS dimensions are measured or monitored the
resulting performances will be analysed and compared. This should provide a picture
about the actual QoS on MS-, AC- as well as Community level.
13
Final Report
In Figure 2-2 the scope of analysis is summarised.
Incentives
Customer satisfaction surveys
Access to information
Complaint handling
Evaluation
Loss
Performance
(existing MS, AC)
Domestic transit time
QoS regulation
(existing MS, AC)
Cross border transit time
Postal Directive
Delivery conditions
Scope of the analysis
Access to the postal network
Figure 2-2:
Opportunities
List of potential opportunities
Within this scope of the study, various levels of analysis will be covered. These are
outlined in Figure 2-3.
Figure 2-3:
Levels of the analysis
Dimensions
of the analysis
Areas
of the analysis
QoS regulation
QoS performance
Legal nature
Regulatory vs. voluntary
Political level
Community vs. national
Services
QoS measurement
National vs. cross-border
Scope of time
Current situation vs. evolution
14

The regulatory frameworks on Community and MS / AC levels determine the regulatory

QoS objectives and requirements whereas voluntary objectives are set by the universal
service providers themselves. An additional aspect of the study is to identify these
voluntary objectives and their implementation.
Besides rules and regulations on the Community and the national level additional supranational contracts like the REIMS II and UPU agreements have an impact on actual
QoS regulation, measurement and performance.
Considering the ongoing changes in quality of service provision the study additionally
analyses the past and current situation in each country and sheds light on the expected
future development of the quality of postal services.
Within the Postal Directive the needs of postal users are an important benchmark with
regard to the postal service provision. Besides a user oriented product portfolio this
implies a postal network structure which should be carefully tailored to the needs of
customers. Against the background of the ongoing liberalisation the QoS strategies
followed by the postal operators are a key variable to maintain their hold on the national
markets.
Therefore, the analysis of QoS frameworks should cover different views and opinions.
Besides the USPs sight the view of the customers and consumers are included. They
should provide information about major shortcomings experienced in different countries.
In the course of the study national as well as European associations were asked about
their problems and expectations concerning universal postal services.
Figure 2-4:
Point of views in the perception of quality of postal services
Providers view
(along its postal
value chain)
Quality of
postal
services
Customers/
Consumers
view
Regulators
view
Under competitive conditions the quality of services offered depends on the supply and
demand. The result is a mix of different quality-price combinations oriented to the needs
of the customers on the one hand and technical and economical restrictions faced by
Final Report
15
the companies on the other. Within markets characterised by monopolistic structures a

third party may be introduced in order to substitute the missing market mechanism. On
postal markets this part is taken over by the regulatory framework represented by the
national regulatory authorities.
Against this background, it is also important to look at the involvement of interest groups
like customer and consumer organisations within the procedure of defining the scope of
QoS. This may give additional information how far consumers and customers needs
are taken into consideration within the QoS frameworks.
The group of postal users is a very heterogeneous one. Dependent on the number and
type of postal users represented by an association (large mailers or private households)
the associations might be able to influence the behaviour of the postal service provider.
A main characteristic of a postal service is that only the sender pays for the provision.
Therefore, there is a big group of business and private recipients, who are not the
contract partner of the postal service provider. Especially private households only send
the minority but receive the majority of postal items. Against this background the
interests of businesses as main senders and private households as main recipients
might be very different.
In order to assess the European and national QoS frameworks it is necessary to take
account of these different views. This has been done within the study by integrating the
views of different business as well as consumer associations.
2.2
Methodology of the study
The aim of this chapter is to describe the methodology of information gathering used
within the study.
The above chapter about the structure and the scope of the study has already given
some idea on the information needed. The main instruments used to gather the
information were
Desk research: existing EU-studies (Omega, CTCon, nera, Eurobaromtre),

MS-specific publications, national and Community postal law, annual reports of
postal operators, CEN-publications, regulatory literature)
Development and distribution of target group-specific questionnaires for NRAs

and USPs of the MS and the AC, consumer and business associations, and
other postal operators.
Face-to-face interviews with USPs and NRAs in selected MS (Belgium,

Germany, Greece, Italy, Netherlands, Portugal, Sweden)
16

Face-to-face interviews in nearly all Accession Countries (carried out in the

course of a study8 on the accession and Accession Countries conducted by
WIK-Consult: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Malta, Poland,
Slovak Republic, and Slovenia)
Face-to-face interviews with representatives of IPC and CEN/TC331
Phone interviews with consumer associations and other postal operators

(covering Netherlands, Germany and Sweden)
Participation at the 2nd meeting of the CEN/TC331 Customer Needs Task Force
in Brugge (presentation and discussion of the study)
Two public workshops with concerned stakeholders (representatives of USPs,

NRAs from the MS and AC as well as of European associations like FEDMA,
BEUC, ANEC, EMOTA, and FAEP)
Expert panel in order to discuss some hypotheses and outcomes of the study
Table 2-1 provides an overview about the number of distributed and returned
questionnaires.
All AC-USPs and AC-NRAs as far as they are integrated in the course of the study
answered the questionnaires. Nearly all of these countries are characterised by a high
degree of uncertainty concerning the implementation of the sometimes very recently
introduced regulatory frameworks. It is therefore not surprising, that the answers of the
national USPs and NRAs are contradictory in many cases.
In Malta and Cyprus the regulatory framework for postal services including the
establishment of a regulatory authority has not been laid down yet. Moreover, as the
Cyprian postal operator is still a part of the Ministry the organisational separation has
not been carried out yet. This is planned for the end of 2003. As a result of the lack of a
postal regulatory framework the unofficial Maltese NRA could not provide any answers.
In contrast to Malta the Cyprian NRA has already started its work and sent back an
answered questionnaire. In Poland the Postal Law of 1990 is in the process of ongoing
revision. Therefore the Polish regulator was not able to answer most of the questions. In
Slovenia the missing decree about the scope of universal service provision and related
QoS requirements is being elaborated. It is expected to be finalised during the next
months. In Hungary, the Czech Republic, and the Slovak Republic the legislative
framework for the regulation of postal services has more or less been finalised. From all
this, it follows that the answers of USPs and NRAs given in the course of the study are
not the final truth. Therefore the results have to be interpreted very carefully.
8 Survey on some main aspects of postal networks in EU adhesion candidate countries, study on
behalf of the European Commission, DG Internal market (2003).
17
Final Report
Table 2-1:
Countries
MS
Number of distributed questionnaires and return

Organisation
USP
NRA
15
15
15
14
NRA
AC
USP
10
10
9
9
AC
Total
3.
Face-to-face
interviews
USP
MS
2.
Number of returned
questionnaires
EEA
10
Consumer
associations
56
5
(DE, FI, LU, NL, UK)
Business
associations 3
42
8
(AT, BE, DE, FR, IT, UK)
Consumer
associations
10
1
(PL)
Business
associations 3
7
(CZ, EE, HU, LT, LV, PL, SK)
169
73
NRA
1.
Number of
distributed
questionnaires
32
The Dutch NRA (OPTA) did not answer the questionnaire. Several interviews (phone and face-to-face) help to
answer at least some questions.
In Malta the regulatory framework is not in force yet. Therefore, the still unofficial NRA was not able to answer the
questionnaire.
Thanks to the helpful support of FEDMA more business associations and large mailers got the questionnaire than
planned. Therefore the actual number of questionnaires sent to business associations and customers is unknown.
Without the support of FEDMA the return rate would probably be much lower.
Whereas the return of the NRA and USP-questionnaires is nearly 100%9, the
participation of the consumer and business associations was very restrained. One
reason was surely the length of the questionnaire. Therefore we tried to get at least
comments on the perception of universal postal services by using phone interviews and
follow-up inquiries by e-mail. However, even then the rate of participation was very
low.10 In the study the perception of consumers and business customers should play
an important role. Due to the low return rate of questionnaires and answers especially
of consumer associations (reliable and solid) statements about their perception of postal
services are not possible. Furthermore, answered questionnaires were not sent back
from some MS11 and one AC12.
In order to fill the gap we have included the results of the Eurobaromtre 5813 as far as
possible. In this survey a representative number of consumers in all MS answered very
9 Even if the last questionnaire came quite late (mid of June).

10 Successful phone interviews were carried out with consumer associations of Germany, Italy, and
Finland.
11 Denmark, Greece, Ireland, Portugal, Spain, and Sweden.
12 Slovenia.
13 Eurobaromtre 58 Edition speciale (2002) Lopinion des consommateurs sur les services
dintert general, European Commission, DG Sant et Protection des Consommateurs.
18

general questions about the degree of satisfaction with services of general interest.14
These questions have covered the issues price, quality, complaints, information
transparency as well as service quality.
Against the background of these shortcomings all statements about consumers and
customers perception made in this study should only be interpreted as rough
indications about the actual QoS situation in the European Union.
14 Telecommunication services (mobiles, phones), energy, gas, water, transport services.
Final Report
3.1
19
Description of the status quo current quality of service policies

and performance
The Community and international framework of QoS regulation
3.1.1 Postal Directive (Directive 97/67/EC amended by Directive 2002/39/EC)
3.1.1.1 Objectives
The main objectives of the Community postal policy are to harmonise the development
of the Communitys postal sector in order to establish the internal market for postal
services and to improve quality of those services. Appropriate regulatory provisions
shall ensure, that efficient and reliable postal services of good quality are available
throughout the European Union to all citizens at affordable prices. In the context of a
gradual and controlled liberalisation of postal markets regulation seeks to reduce quality
variations between the Member States. The improved quality of intra-Community crossborder mail shall meet the consumers interests and needs and support the
development of a harmonised Community postal market.
In order to reach this broad purpose the Directive 97/67/EC on common rules for the
development of the internal market for Community postal services and the
improvements of quality of service (Postal Directive) has become effective in 1998. The
Postal Directive establishes a regulatory framework for the Community postal sector.
The ongoing process of liberalisation and various changes in the postal markets
environment, like for example the reform of terminal dues through the REIMS
agreement, make it necessary to introduce measures which support a harmonised
development of postal markets in the Member States as well as the emergence of an
internal market. The main elements of this framework are the definitions of:
the minimum scope of the universal postal service which is to be guaranteed by all
Member States. This obligation covers the different types of postal services and
comprises additional requirements concerning the organisation of the postal network
with regard to access and delivery conditions;
common tariff and accounting principles in order to achieve more transparency;
common upper weight and price boundaries for those services which may be
reserved by a Member State to its universal service provider(s) to the extent
necessary to ensure the maintenance of the universal service;
20

the principles to govern the authorisation/licensing of the provision of non-reserved

postal services and the separation of regulatory powers and operational functions in
the postal sector.
3.1.1.2 QoS requirements regarding postal services

Besides the harmonisation objective, the Postal Directive aims at improving the quality
of Community postal services. For this purpose, Articles 16 to 19 include a number of
specific provisions such as:
Member States shall ensure that QoS objectives are set and published in relation to
universal service;
these objectives shall be set by the European Parliament and Council for crossborder services, and by the Member States for national services;
the QoS objectives shall focus in particular on transit times and on the regularity and
reliability of services;
independent performance monitoring shall take place at least once a year under
standardised conditions.
These provisions show that improving quality of service is a particular goal of the
Community policy for postal services. The Postal Directive lays down minimum
requirements for setting quality of service objectives, performing independent
measurement and publishing results.
Access
The Postal Directive aims at ensuring the provision of a minimum universal postal
service in the Member States. Article 3 assigns the right to the users to be able to
access a minimum range of postal services of a specified quality. These services
should be provided at affordable prices for the benefit of all users, irrespective of their
geographical location. As part of the universal service obligation the Postal Directive
sets minimum requirements for several aspects of QoS. These concern access and
delivery conditions as well as information and publication issues (Article 6). The
Member States are free to set requirements beyond the minimum.
Access to the universal postal service network is one essential issue for the provision of
a universal service and the development of a harmonised European postal sector.
According to the Postal Directive Member States shall ensure that the density of access
points is orientated to the users needs and that users have transparent and nondiscriminatory access to the public postal network. Article 3(2) specifies that Member
States shall take steps to ensure that the density of points of contract, that is of post
offices, and of points of access, mainly street letter boxes, take account of the needs of
Final Report
21
users, both senders and recipients. Given that the Directive only provides the general
framework concerning the access conditions, a wide range of different access
obligations can be found in the Member States.
Collection and delivery
Article 3 (3) stipulates that postal operators should provide at least one clearance and
one delivery every working day but not less than five days a week. Subject to specific
circumstances or geographical conditions the NRAs may grant exceptions to this
minimum frequency for collection and delivery. Delivery has to take place to all
addresses or, with the permission of NRAs, to P.O. boxes or other locations that are
regarded to be appropriate by the NRAs.
Information
Article 6 requires Member States to ensure that the USPs provide information on the
universal service to customers and consumers. Users have the right to obtain
sufficiently detailed information on the universal service offered on a regular basis. This
concerns particularly the general conditions of access to the services and prices.
Additionally, the Postal Directive requires the postal operators to publish quality of
service objectives and information on the actual performance (Article 18, 3). The
information is to be published in an appropriate manner.
Quality of service objectives
The main principle outlined in the Postal Directive is that the Member States should
ensure that generally the USPs have to meet the specified objectives and requirements
concerning the QoS dimensions as well as publication and access to information
issues. With respect to measurement standards developed by CEN the MS shall make
sure that the USPs refer to the standards published in the Official Journal. An
independent institution which is not related to the USP shall carry out the performance
monitoring.
With regard to the scope of QoS objectives t is laid down in the Postal Directive that the
MS should ensure that QoS objectives are set and published with respect to national
universal service. Here special focus is on transit times, regularity and reliability of
postal services. The wording postal services implies that not only 1st class services
shall be regulated by QoS objectives but also other services (e.g. 2nd class and/or direct
mail services and parcel services). In the course of this study the scope of regulatory
QoS objectives with respect to universal services will be analysed and compared.
The Postal Directive has to be implemented into national legislation. Here it is allowed
for some degree of variation in the national definitions. Furthermore, MS are under an
obligation due to Article 17 of the Directive. Within this article it is laid down that quality
objectives for national mail have be compatible with the ones for cross-border mail.
22

3.1.1.3 QoS objectives for cross-border mail services

One key area of the Postal Directive focuses on the improvement of intra-Community
cross-border postal services. In order to achieve this objective the Directive explicitly
sets common quality of service objectives for intra-Community cross-border mail which
shall contribute to the development of high-quality postal services within the internal
market. At Community level the Postal Directive defines QoS objectives for transit times
concerning the fastest standard category of cross-border letter mail services. According
to the Appendix of the Postal Directive 85% of this mail category shall be delivered
within three days (D+3) and 97% within five days (D+5). These objectives are the
minimum to be implemented into national legislation. However, there is no Community
regulation with respect to parcel services or non-priority letter mail services.
3.1.1.4 Consequences of QoS performance

In order to ensure a free and continuous conveyance of cross-border mail the postal
operator in the country of destination has to be compensated for its delivery service.
Bilateral agreements between the respective national postal operators are one way of
handling this compensation. However, the costs of bilateral negotiations rise
exponentially the more parties have to be negotiated with. Thus, a so-called terminal
dues system has been developed for cross-border mail items and is binding for many
parties.
The remuneration for a postal operator delivering inbound cross-border mail is often
discussed. Here it has to be taken into consideration that the various USPs are
operating under very different economic conditions and perform very differently in terms
of cost efficiency and quality of service. According to Article 12 tariffs have to be geared
to costs. Thus, terminal dues for intra-Community cross-border mail have to be geared
to the costs of processing and delivering the incoming cross-border mail too. Moreover,
the remuneration should also be subject to the quality of service achieved (Article 13).
The REIMS agreement15 enables the national USPs to satisfy this requirements of the
Directive. It aims to gear terminal dues to cost and quality of service with respect to
transit time. Negotiations on the REIMS agreement among national public postal
operators started more than seven years ago. At the beginning of 1995, fourteen USPs
signed a preliminary agreement that set terminal dues equal to 80% of domestic
postage rates after a six-year transition period. A revised version REIMS I was
ratified in January 1996. However, in 1997 this first REIMS agreement expired because
some postal operators refused to sign the agreement.
15 Multilateral agreement on the remuneration that most EU USPs pay each other for the
delivery of incoming cross-border mail (terminal dues).
Final Report
23
A follow-up agreement REIMS II had to be worked out which also took into account
some competition issues raised by the European Commission. These especially
focused on equal treatment of mailers and addressees across the European Union.16
Up to October 1998 most national universal service providers had signed this modified
agreement. The agreement is open to public and private operators on condition that
they are universal postal service providers.
In contrast to other Terminal Dues systems REIMS is the first multilateral system that
steps towards a greater cost orientation. For the delivery of inbound cross-border mail
the USP is assigned a percentage of its domestic single item tariff. This way it is
intended to approximately reflect the actual cost of inbound mail delivery.
Furthermore, the REIMS II agreement for the first time links the terminal dues to quality
of service aspects. The amount of money each postal operator receives depends on its
record for delivering international mail on time. Since the effective amount of
compensation is related to quality aspects, the REIMS II agreement requires the postal
operators to improve their domestic performance. Therefore, REIMS II provides a
strong incentive for the USPs to increase their quality of service. This kind of selfregulation of quality contributes to a high degree to the amelioration of the quality of
postal service, both domestic and cross-border.
The following table summarises the transit time objectives set by REIMS II. The
participating postal operators are divided into three groups A, B, C characterised by
different objective levels.
The objectives are monitored by using the so-called UNEX system. On behalf of the
International Post Corporation (IPC)17 Research International continuously measures
the transit time of cross-border items. To monitor the conveyance of letters the UNEX
system uses a chip which is embedded into test letters. This chip makes it possible to
monitor the movement of the test letter and identify periods of inactivity. This track and
trace facility is highly efficient in monitoring cross-border quality and therefore has been
essential for the implementation of the REIMS II agreement. In order to be able to
monitor the quality objectives set by REIMS II Research International only has to
measure the transit time from the Office of Exchange in the destination country to the
final delivery point. This implies that the measurement procedure necessary to monitor
the REIMS quality objectives is less complex than measuring the transit time
performance between two countries from collection to delivery. Any operator failing to
meet the above defined transit time objectives is subject to penalties set out in the
agreement.
16 The REIMS agreement is subject of an exemption from European antitrust rules. This exemption is
currently under discussion mainly because of missing third party access and problems in the degree
of cost orientation (Does the share of 80% really reflects the cost of transport and delivery in the
destination country). The final decision about the future duration of the exemption is expected in the
mid of 2003.
17 IPC is a cooperative association of 23 national postal operators, including all REIMS II contract
parties.
24

Table 3-1:
Transit time objectives set by REIMS II for incoming cross-border mail

items
Year
1998
1999
2000
2001
2002
Group
D+1 objective (1)
90%
85%
80%
95%
90%
85%
95%
90%
85%
93%
90%, 91.5%
85%
93%
90%, 91.5%, 93%
85%
Group A:
Austrian Post, La Poste/De Post (Belgium), Post Danmark, Posti (Finland), Iceland Post, An Post (Ireland),
EPT (Luxembourg), Norway Post, Posten AB (Sweden)
Group B:
La Poste (France), DPAG (Germany), Poste Italiane (Italy), CTT Correios (Portugal), Royal Mail (United
Kingdom)
Group C:
ELTA (Greece) and CTT Correos (Spain)
(1) The objective D+1 means that a specified percentage of incoming mail will have to be delivered to its final destination
within one working day following its arrival at the office of exchange, provided that it arrives there before the Latest
Arrival Time (latest acceptable time of touchdown).
With regard to domestic mail, progress is difficult to track due to a lack of harmonised
and independently monitored quality measurement systems. In order to mitigate these
shortcomings the European Commission supports the development of harmonised
measurement methods for the quality of service performance of postal services.
3.1.2 Technical standardisation by CEN/TC331
3.1.2.1 Postal Directive provisions

The Postal Directive (article 20) states that harmonisation of technical standards shall
be continued, taking into account in particular the interest of the users. The European
Committee for Standardisation (CEN) shall be entrusted with drawing up the technical
standards applicable in the postal sector. It shall take account of the harmonisation
measures adopted at international level, particularly those of the UPU. The Postal
Directive also states that Member States shall ensure that the USPs refer to the
Final Report
25
European standards where necessary in the interest of the users, particularly

concerning information about the universal service. It is in this framework that
standardisation mandates have been issued by the Commission to CEN concerning
postal services.
Concerning quality of service more specifically, the Postal Directive states in article 16
and following that the independent performance monitoring to be carried out in relation
to the universal service shall be made under standardised conditions to be specified by
the Postal Directive Committee18. The rationale for these Postal Directive provisions is
that a common methodology for measuring the quality of the universal service is
necessary in order to be able to evaluate the convergence of the quality of service
throughout the Community.
Indeed, using standardised methods ensures that the measurement is done in an
objective and non-discriminating way and meets the requirements of the Postal
Directive. It ensures that reliable and correct information is collected which can be
presented to regulators and the public in a comprehensive way. Particularly consumer
organisations and customer groups strongly support the establishment of European
standards. Standards enable them to compare the quality of service levels in the
Member State. Only standardised measuring methods allow a unambiguous
comparison of service quality and thus enhance the credibility of the results. As postal
operators and regulators can use the standardised measurement methods as well,
present shortcomings with respect to quality of service measurement can be mitigated.
Furthermore, standardised measurement methods may help to keep the cost of
measuring down. They could also make it easier to find contractors familiar with the
methods and to evaluate the work of contractors for measuring and auditing.
3.1.2.2 CEN/TC331: organisation and mandates

CEN
CEN is a non-profit international scientific and technical organisation which mission is to
promote voluntary technical harmonisation in Europe in cooperation with world-wide
bodies (e.g. ISO) and its partners in Europe. The Members of CEN are the national
standard setting bodies of the EU Member States, the EFTA countries, the Czech
Republic and Malta. The Members develop and ratify European Standards19.
18 Regulatory Committee established by article 21 of the Postal Directive.

19 In addition to the members, CEN also has affiliates, which are the national standardisation bodies of
CEECs I.e. Albania, Bulgaria, Croatia, Cyprus, Estonia, Hungary, Latvia, Lithuania, Poland, Romania,
Slovakia, Slovenia and Turkey. Affiliates may participate in certain CEN meetings and they receive all
general and technical documentation from CEN.
26

The CEN develops 3 types of standards:
EN standards: these are permanent and official European standards which

become official national standards in all CEN member countries. More
concretely, national standardisation organisations which are members of the
CEN have to withdraw conflicting national standards.
TS standards (previously ENV): these Technical Specifications are experimental

standards with a limited duration. If the national standardisation organisations
which are members of the CEN have to promote them, there is no impact on
existing national standards.
TR standards: these are Technical Reports.
CEN/TC331
The CEN standards for postal services are developed by a dedicated Technical
Committee within CEN (TC331). Its work concentrates on defining standards for three
specified fields delegated to the following Working Groups:
Quality of service measurement
Hybrid mail
Automatic processing (e.g. standardisation of postal marking)
Each Working Group consists of pan-European representatives of heterogeneous
organisations. These combine standardisation skills (from CEN and its national
standardisation members), international and national regulatory knowledge (including
CERP) as well as industry skills (I.e. postal operators, consulting organisations,
consumer organisation, equipment manufacturers, software vendors, IPC, IDP,
Posteurop, other experts). 2 Task Forces are complementing the 3 Work Groups with
regard to Terminology (in order to ensure consistency of all standards) and Customer
Needs (in order to ensure that the CEN/TC331 activities are properly taking account of
the users interests and needs).
27
Final Report
Figure 3-1:
Organisation of TC331
Technical Committee 331

(TC331)
WG1
Quality of service
WG2
WG3
Hybrid Mail
Addresses & automatic

identification of items
Terminology
Task Force
Task Force on
customer needs
Due to the specific importance of CEN liaisons and relations exist with several
stakeholder organisations. CEN/TC331 for example cooperates with the Universal Post
Union (UPU). A Memorandum of understanding signed in 2001 establishes a framework
that allows the existing co-operation to be significantly enhanced through defined
processes and procedures, clear principles for related aspects such as mutual
standards recognition and Intellectual Property Rights and the establishment of a
Contact Committee. Further liaisons are in place between CEN/TC331 and International
Post Corporation (IPC) as well as between the CEN/TC331 and Posteurop. As the
European Committee for Postal Regulation (CERP) includes a dedicated
Standardisation Working Group, it is also closely associated to the CEN/TC331
activities. Moreover, relations have been established with user organisations such as
the Federation of European Direct Marketing (FEDMA), the European Mail Order and
Distance Selling Trade Association (EMOTA) and the European Consumers
Organisation (BEUC).
Commission mandates
Based on the Postal Directive provisions, the Commission issued two mandates to CEN
in order to begin working on technical harmonisation. The underlying aim was to
increase the interoperability of postal networks in the Member States and to enhance
the availability of services offered to users. The initial Commission mandate to the CEN
(M/240) in March 1996 required the development of 16 European standards concerning
postal services, encompassing quality of service measurement and operational or
informational aspects. Working Group 1, concentrating on quality of service
measurement, deals specifically with independent end-to-end measurement capabilities
(both domestic and cross-border) and complaints and redress procedures as well as
measurement of lost mail.
28

The second Commission mandate to the CEN (M/312) in October 2001 includes 11 new
work items proposed by the CEN/TC331 following an extensive industry consultation
process. These work items cover new topics mainly related to IT within the postal sector
and additional fields of QoS measurement. The 4 work items concerning quality of
service dealt with by Working Group 1 can be outlined as follows :
Drawing up one or several standard(s) with respect to the methodology to measure
the quality of the access to postal services and of the postal delivery. This subject
encompasses measurements or quality indicators such as queuing time for
accessing postal services, availability of letter boxes, access to service information
or collection time, collection frequency, delivery windows (i.e. timeframes within
which deliveries take place), physical condition of mail or incorrect delivery of mail.
Developing a standard with respect to the methodology to measure domestic and
cross-border end-to-end transit times of parcels services by the use of a track and
trace systems. The scope of this standard is being widened as far as possible in
order to be able to measure other postal services where a monitoring system is in
use, too. Furthermore, the possibility of measuring the loss of parcels within the
same standard shall be examined.
Undertaking a preliminary study (possibly followed by drawing up a standard) on the
methodology to measure the quality of hybrid mail services in domestic and crossborder traffic. One of the quality indicators could be the monitoring of the transit time.
Other types of quality aspects must be of interest to the customers and would have
to be identified and assigned measurement rules.
Undertaking a preliminary study (possibly followed by drawing up a standard) on the
measurement of the quality of delivery services for non-addressed mail items. The
standard should measure the reliability of deliveries (delivery at a specific day or
within a given time period). Other and/or additional aspects of quality could be
considered such as the physical condition of mail piece when delivered or the
coverage achieved within a specified objective area
In addition to the above 4 new work items, 2 work items are identified in the M/312
mandate concerning the extension of existing work items for the measurement of quality
of service. The objective for these work items is not necessarily to develop new
standards but to amend existing standards in order to ensure that they are adapted with
ongoing EU evolutions with respect to both domestic and cross-border mail:
Enlargement: Necessary amendments to existing standards may be identified in
order to make it possible to apply the standard to all enlargement countries
Multiple operators: The ongoing gradual and controlled market opening of postal
services for competitive entry may require to adapt existing standards so that they
could be used by other operators than USPs (for which the existing standards were
originally mainly designed).
Final Report
29
3.1.2.3 Status and recent development

Since 1998 CENs Technical Committee 331 has been developing a set of European
standards for postal services. Due to geographical peculiarities, specific postal
traditions and cultural differences across the Member States these standards do not
aim for an exactly defined common measurement system. As a guideline they rather
outline the minimum requirements to be applied for the measurement of the related
issues. This work is essential as it contributes to a common framework for the
measurement of quality.
As regards quality of service the following standards have been adopted so far:
EN13850:2002 Measurement of transit time of end-to-end services for single piece
priority mail and first class mail.
This standard has been developed in order to provide a standardised technique that
can be used throughout Europe to measure the transit time for priority and first class
mail through samples representing real mail flows. It specifies conditions for
independent measurements of end-to-end transit times with a unique method at the
European level, valid for both national and cross-border mail. This method clearly
defines minimum requirements with respect to the constitution of test letters,
geographical stratification, and further mail characteristics, statistical and counting
rules as well as auditing and reporting obligations. It allows a real auditability of the
results expressed, basically, as the percentage of letters delivered end-to-end within
D+n days within a postal operators network or within a network of different national
networks of postal operators (as for cross-border mail). It goes beyond most existing
systems that have been previously used by regulators and postal operators.
EN14508:2002 Measurement of the transit time of end-to-end services for single
piece non-priority mail and 2nd class mail.
This standard uses the same technical expertise as for single piece priority mail.
EN14534:2003 Measurement of transit time of end to end services for bulk mail.
This standard defined a method for measuring end to end transit time for bulk mail,
either for domestic or cross-border flows.
EN14012:2002 Measurement of complaints and redress procedures.
This standard is concerning with the measurement of the number of complaints and
the speed with which they are handled. The standard will ensure that information is
collected, analysed, and reported in a consistent manner so that it can be tracked for
quality control and audit purposes. It provides a classification system for complaints
and some indications on minimum handling requirements for redress procedures.
EN14137:2003 Measurement of loss of registered mail and other types of postal
service using a track and trace system.
30

One further work item is under development concerning a method to measure the loss
and substantial delay in priority and first class single piece mail using a survey of test
letters. Measuring the loss of non-registered mail is a complex issue. An initial draft for
such standard is being circulated and due to the complexity involved, it has been
decided to produce an experimental standard (TS) at this stage.
3.1.2.4 Implementation of adopted standards

The work on standardisation is in progress. Several standards have already been
adopted by CEN and more will be adopted in the near future. Most work items
developed under the initial Commission mandate will result in European standards by
the end of the year 2003. As a result, there is a need to implement the standards within
Community postal services.
Once the standards are formally adopted by CEN, the following steps need to be taken
for the European standards to be transposed in the national standardisation
frameworks:
Official European standards (EN) become national standards when included in the
catalogue of national standards (ratification). Conflicting national standards are
automatically and simultaneously withdrawn when the European standards are
implemented.
The CEN postal standards shall be given the status of a national standard either by
publication of an identical text or by endorsement. The national applications should
fulfil the minimum requirements to satisfy the information interests of the NRAs, the
postal customers and the postal operators themselves. The reference of the
standard may be published in the Official Journal of the European Communities
(OJEC). Such publication may also determine the applicability of the standards in
relation to European Directives.
As CEN standardisation is generally subject to voluntary involvement,
implementation usually just involves technical and operational aspects. However, the
Postal Directive is setting up a specific framework for the CEN standards concerning
postal services. Concerning quality of service, the Postal Directive goes beyond the
voluntary use (in relation to Articles 6, 16 and 20 in particular) by requiring Member
States to ensure that the quality of the universal service is measured under
"standardised conditions" to be defined in the framework of the Postal Directive
Committee. In this context, implementation of certain technical standards adopted by
CEN may be required in the Member States. Technical standards which may
become "standardised conditions" in the framework of the Postal Directive
Committee are permanent (EN) standards concerning the measurement of quality of
service within the universal service.
Final Report
31
According to the Postal Directive the Committee should assist the Commission in
developing measures on technical standardisation. The Postal Directive Committee,
which includes representatives of the Member States and is chaired by the
Commission, is meeting annually to monitor the application of the Postal Directive. For
technical standards adopted by the CEN, and particularly for those which may become
a "standardised method" in the meaning of the Postal Directive, the Commission should
provide appropriate information to the Postal Directive Committee members concerning
the adopted standards, the related regulatory implications ("standardised conditions" or
voluntary use) as well as the next steps to be taken (e.g. publication of the standards
reference in the OJEC, deadline for Community implementation if appropriate).
Endorsement by the Postal Directive Committee is required prior to any CEN standard
eventually becoming "standardised conditions".
In 2002, the Postal Directive Committee endorsed the Commission proposal for the
EN13850:2002 CEN standard to become "harmonised conditions" for measuring quality
of service within the universal service, and agreed that the deadline for implementation
in the Member States shall be 1 January 2004 for domestic services (1 January 2005
for cross-border services. Other EN standards adopted by the CEN since then
concerning measuring quality of service within the universal service may be proposed to
become "standardised conditions" in the future.
In order to avoid misunderstandings it should be pointed out that CEN standards, as
such, do not create any obligation to carry out performance monitoring of quality of
service. If the quality of service aspect covered by a CEN standard is not measured in a
Member States, neither the adoption of the standard by the CEN nor the decision to
establish it as "standardised conditions" in the framework of the Postal Directive
Committee would require the measurement to take place in the Member State in
question. Per definition, the purpose of "standardised conditions" is to ensure that
essential aspects of the quality of the universal postal service are measured in a
harmonised way across the Community (whether the measurement is required by
regulation or performed voluntarily by a USP) so that convergence of the performance
can be monitored.
The CEN standards provide minimum requirements and allow existing measurement
systems to be enhanced. Operators or other bodies may wish to go beyond these
minimum requirements in order to produce information to identify and correct specific
areas of poor performance. Moreover, the standards do not state how and when results
should be shared with postal customers and users, who will order measurement to take
place, and who will pay for the measurement. These subjects are outside the standards.
They must be determined by legal or regulatory requirements. Therefore, the
implementation has to establish a specific approach allowed in the standard which shall
be applied in the particular Member State. The Postal Directive provides that NRAs are
responsible for ensuring that the implementation of the mandatory technical standards
by the organisations concerned is done in compliance with the set principles, within the
regulatory deadlines and under transparent and non-discrimination principles.
32

3.1.3 UPU: Quality of Service Fund, objectives and measurement issues

Established in 1874, the Universal Postal Union (UPU) with its Headquarters in the
Swiss capital Bern, is the second oldest international organisation after the International
Telecommunications Union. With 189 member countries, the UPU is the primary forum
for cooperation regarding postal services worldwide. The UPU works towards the goal
of ensuring that all people have affordable and reliable access to postal services. One
of its future roles will be to develop and monitor standards for the provision of a
universal postal service, including such features as access to service, efficiency,
customer satisfaction, security and reasonable pricing. Against this background the
UPU provides technical assistance, training and consultancy services in order to
improve the quality of the postal service.
The creation of the Quality of Service Fund (QSF) was decided on by the Postal
Operations Council as part of its Beijing Congress Terminal dues proposal.20 The fund
is used to support projects aimed at improving the quality of the universal postal service
focussing on letter-post services, in particular the speed, reliability and security of
international mail exchanges. Additionally, projects could cover the following fields:
access to services and delivery issues, liability and treatment of inquiries, customer
satisfaction, and the design and implementation of costing and pricing systems.
The QSF is maintained by a 7.5% increase in the terminal dues rate of 3.427 SDR per
kg applied to mail flows from industrialised to developing countries. Projects to be
supported by the QSF shall be carried out in the developing countries under the
responsibility of the national postal administrations.
It is not possible to finance the complete project by using QSF. Parts of the project have
to be financed by the operator itself or by other country-specific sources. In case of
financial restrictions faced by the operators this could hinder the operators to use this
QSF.
Besides the classical developing countries the Accession Countries are also able to
fund QoS projects by using QSF. It is not for sure that these countries will be
reclassified as developing countries after the next UPU congress in September 2004
(Bukarest, Romania). In subsection 3.7.5 the status of current and finalised QSFprojects with regard to the Accession Countries is described.
Besides the QSF measurement of cross-border transit times is organised by the UPU.
Based on bilateral agreements between postal operators objectives are set by the
parties and monitored by the UPU measurement system at least once a year. Usually
only those country to country relations characterised by important mail streams are
20 The last UPU congress took place in Beijing, China in 1999.
Final Report
33
covered. Explicit rules prescribing a linkage between terminal dues and quality of
service do not exist yet. But it is possible to voluntarily implement this type of conditions
within the bilateral agreements mentioned above.
3.2
The national QoS framework and performance in the EU
This section covers the current EU Member States. Information related to the AC, is
reported in section 3.3.
3.2.1 Product portfolio of the national universal service providers in the EU
3.2.1.1 Scope of universal services on Community and national levels

A main objective of the Postal Directive was to establish a Community universal service
that defines minimum standards to be met in all Member States. It is stated in the
Directive that the universal service within the European Community encompasses both
letters and parcels up to specific weight limits. The universal service includes postal
services for letters up to a weight limit of 2 kg and domestic parcels up to a weight limit
of 10 kg. For international parcels from other Member States a weight limit of 20 kg is
set. Although the obligation for domestic parcels is lower it is suggested to the Member
States to adjust the weight limit for domestic parcels to that for international parcels.
Furthermore, the universal service includes registered and insured services for letters
and parcels. With registered services the proof of postage and delivery is provided.
Furthermore, registered mail is insured against the risk of loss, theft and damage
providing a fixed level of compensation. Insured services compensate the sender in
case of loss, theft and damage up to a chosen value.
Table 3-2 below shows that the national universal service obligation in some countries
exceeds the minimum requirements of the Directive. 10 Member States (Austria,
Denmark, France, Germany, Greece, Ireland, Italy, Portugal, Sweden and the UK) have
adopted a 20 kg maximum limit for domestic parcel delivery within the universal service
area. They have increased the weight limits as allowed by the Directive.
In case of Finland the definition of universal service goes beyond the Directives
requirements. Here the weight limit for cross border parcels has been enhanced to 30
kg. Luxembourg and Spain have implemented a weight limit for intra-Community crossborder parcels at 10 kg, therefore beneath the Directives guideline. However, the
Directive requires the Member States to ensure the delivery of parcels received from
other Member States weighting up to 20 kg, notwithstanding the national universal
34

service definition. Therefore, the weight limit for incoming cross-border parcels in these
two countries is 20 kg as well.21
Table 3-2:
Weight limits of the universal service (in kg)
Member State
Letter items
AT
BE
DE
DK
EL
ES
FR
IE
IT
LU
NL
PT
SE
SF
UK
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
Parcels
Domestic
Cross-border
20
10
20
20
20
10
20
20
20
10
10
20
20
10
20
20
20
20
20
20
10
20
20
20
10
20
20
20
30
20
Sweden and the UK reported that they have no weight limit for priority letter mail. This is
of no practical relevance as in both countries the tariff structure for priority mail is such
that heavier items will not be sent by priority mail. In terms of the Directive a postal item
exceeding 2 kg is a parcel or more correctly a postal package. As a consequence,
Table 3-2 states 2 kg as weight limit for letters in Sweden and the UK.
All national definitions of the universal service area comprise registered and insured
items. The weight limits for these services are the same as those for letters and parcel
services.
3.2.1.2 Postal services within the scope of Community universal services

Besides using weight limits the scope of the universal service can be defined with
respect to the products offered by the postal operators within the universal service area.
According to this definition the following postal services are provided in the Member
States (see Figure 3-2):
21 Looking at the EFTA States, Norway has adopted weight limits in accordance with the Directive. In
Iceland domestic parcels up to 20 kg are within the universal service area. Universal services for 1st
class letters are limited to 100 g. Weight limits for direct mail, newspapers, publications and registered
and insured items as well as 2nd class mail do not exist. Thresholds for cross-border mail have not
been reported by the Icelandic NRA.
35
Final Report
Figure 3-2:
Services provided within the universal service
AT
BE
DE
DK
EL
ES
FR
IE
IT
LU
NL
PT
SE
SF
UK
1st class
Parcels
2nd class
Direct mail
Service within the universal service, but not provided
Newspapers,
magazines
Books,
catalogues
1st class letter mail and parcel services are provided in all Member States. Although the
service is within the universal service the Austrian, German, Spanish, Irish and
Luxembourgs USPs do not offer domestic 2nd class mail. The Danish, the Dutch, the
Luxembourgian and the Swedish USPs do not offer direct mail. These postal items are
treated as 1st or 2nd class mail. As a country-specific feature, bulk mail heavier than 100
g is not part of the universal service in the Netherlands. Like in Finland the delivery of
newspapers, magazines and other publication is not within the scope of the universal
service in the Netherlands as well. In Austria, Denmark and the UK there is no special
service for books and/or catalogues. These items are delivered and priced as any other
mail.22
In Finland, Greece and the Netherlands 2nd class letter services are available, but these
services only encompass bulk mail in those countries (see Figure 3-3).
22 The Norwegian USP provides all services but direct mail. In Iceland 2nd class mail is not available.
36

Provision of 2nd class mail
Figure 3-3:
no provision (AT, DE,

IE, LU, ES)
single-piece and bulk

(BE, DK, FR, IT, PT,
SE, UK)
only bulk (SF, EL, NL)
The definition of universal postal services is closely related to transit times. However,
the actual transit time defined in the Member States for similar services within the
universal service varies. For example, all countries, except for Spain, have a D+1 transit
time objective for 1st class mail. In Spain the objective is D+3. In most cases 2nd class
mail is to be delivered within three days. For direct mail the range of transit time
objectives varies from a D+1 objective in the UK to a D+7 objective in France.23
Table 3-3:
Transit time and service definition
Transit time
objective
1st class mail
D+1
all MS except for ES
D+3
ES
2nd class mail
Direct mail
UK
DK, SF, IT, PT, SE, UK
D+4
FR
D+5
EL
D+7
SF
EL, PT
FR
no objective
BE, NL
AT, BE, DE, ES, IE, IT
no provision
AT, DE, ES, IE, LU
DK, LU, NL, SE
Almost all USPs in the Member States provide their customers with the opportunity of
work sharing to a certain degree. The subsequent Figure 3-4 illustrates the existing
opportunities across the Member States.
23 In the UK there are different transit time definitions for direct mail depending on the specific features of
the service. For more details see case study of the British transit time objectives beneath.
37
Final Report
Figure 3-4:
Possiblities of work sharing (number of Member States concerned)
12
Prepaid/metered
13
Letter items
Pre-sorting 1
7
Pre-sorting 2
6
Pre-coding
Outward SF
Inward SF
5
8
Prepaid/metered
10
Parcels
Pre-sorting 1
Pre-coding
Outward SF
Inward SF
4
5
6
For senders different opportunities of work sharing exist. One way is to send prepaid or
metered mail franked by franking machines. Moreover, there is the possibility to pre-sort
mail by postal code or even according to the delivery sequence. Most USPs offer the
opportunity of pre-sorting, especially by postal code. Further possibilities of work
sharing are pre-coding and the transport to the outward or inward sorting facility. These
three latter options of cooperation have been made available only in a few Member
States (see appendix MS for details). Greece is the only country not offering any
alternative of work sharing.
3.2.1.3 Postal services outside the scope of Community universal services

Apart from registered and insured items, value-added services are outside the universal
service obligations. The USPs voluntarily provide these services to meet the demand of
customers. Figure 3-5 outlines the value-added services presently provided in the
Member States by the USPs.
Track and trace technologies for parcels, registered and insured items are available in
most Member States. In many cases USPs without track and trace technologies for
some or all mentioned products plan to introduce these value added services in the next
two years. (e.g. the Belgian USP for registered and insured items in 2003 and for
38

parcels in 2004). In 2004 track and trace technology will probably be available for
parcels in every Member State.
Hybrid mail is provided in 10 Member States. The USPs of Greece and Luxemburg
intend to supply this service in the near future whereas the Austrian, Danish and British
USPs do not have plans so far to offer hybrid mail services (see appendix MS for
details).
Figure 3-5:
Hybrid mail
Provision of value added services
10
Track & trace for
Parcels/packages
Insured items
Registered items
12
10
11
Realized
Planned
Beside value-added services the USPs provide further postal services going beyond the
scope of the universal service definition of the Postal Directive. Almost all postal
operators offer express and courier services and the distribution of unaddressed items
while a document exchange is only provided by the Belgian USP (see Figure 3-6; for
details see appendix MS).
39
Final Report
Figure 3-6:
Services outside the universal service
Document exchange
Courier
Express
12
13
Unaddressed items
14
3.2.2 Definition and setting of national QoS objectives in the EU

This chapter reviews all QoS objectives set within and beyond the scope of Community
universal service definition. Although the analysis is focusing on regulatory objectives,
voluntary objectives are also considered as far as they are publicly available. Due to the
lack of information and confidentiality issues this study does not take account of
voluntary objectives set by the USPs that are for internal use only.
3.2.2.1 Regulatory and voluntary objectives within the scope of universal service
3.2.2.1.1 Transit time

Figure 3-7 shows those domestic services for which regulatory transit time objectives
exist within the Member States. In all Member States but Austria, regulatory transit time
objectives are implemented for domestic priority mail . 8 countries have introduced
regulatory transit time objectives for parcels, 5 countries for 2nd class mail, 2 countries
40

for direct mail and 4 countries for newspapers and/or magazines.24 Portugal is the only
country having a transit time objective for books. According to the Quality of Service
Convention signed between the NRA and the USP, a QoS indicator related to
newspapers, books and periodicals has been defined there.25
Extent of regulatory transit objectives in the Member States26
Figure 3-7:
AT
NL
SF
IE
EL
SE
BE
LU
ES
DE
IT
DK
FR
PT
UK
1st class
Parcels
2nd class
Direct mail
Newspapers/Magazines
Books/Catalogues
24 In France the previous contractual plan covered the years 1998 till 2001 and has been renewed for
2002. This plan included objectives for 2nd class mail and direct mail. Since 2001, La Poste has fixed
an objective for a parcel which is included in the scope of the universal service. This product will
probably be objective in the next contractual plan that is still under process.
25 Concerning domestic mail a regulatory transit time objective is only set for 1st class mail in Iceland.
The Norwegian USP faces regulatory objectives for 1st and 2nd class mail as well as for domestic
parcels.
26 Newspapers, magazines, books and catalogues are not part of the universal service in Finland and
the Netherlands.
41
Final Report
Domestic 1st class mail

Table 3-4 lists the regulatory transit time objectives for domestic 1st class mail in effect
in the Member States in 2003. In Belgium, Germany, Ireland and Luxembourg these
objectives only concern single-piece mail. The recently adopted Austrian transit time
objectives will come into effect in 2004. Spain is the only country having only defined a
D+3 objective. All other national USPs face a D+1 objective.
Table 3-4:
Member State
Regulatory transit time objectives for domestic priority or 1st class

mail in 200327
Objectives
D+1
D+2
95%
98%
BE
92%
97%
DE
80%
95%
DK
97%
EL
82%
AT
94%
87%
98%
LU
95%
99%
NL
95%
PT 3
93.2
SE
85%
98%
98%
IT
SF
1.
2.
3.
4.
84%
D+5
100%
90%
2
IE
UK
D+4
93%
ES
FR
D+3
99.5%
99%
97%
95%
4
92.5%
99.9%
Objectives for 2004. No regulatory objectives in Austria so far.

Objectives for 2002. Objectives for 2003 not yet established.
Additional objective in Portugal: 99.84% D+10.
st
The stated objectives refer only to stamped and metered 1 class mail. In addition, for 83% of the
postal code areas next day delivery shall success at least in 90% of all deliveries. For objectives of
other kinds of 1st class mail see the table below.
In some Member States the objectives for domestic 1st class mail increase over time:
The Belgian regulation aims for reaching a yearly performance increase of 1

percentage point. The basic objective in 2001 was 90% D+1.
In France the objectives have raised 1 percentage point each year until they
reached the current level started in 1998 with 80% D+1 and 95% D+2.
27 Iceland and Norway have both implemented an 85% D+1 objective in addition with a 97% D+3
objective for domestic 1st class letters.
42

Greece is characterised by major amendments of the objectives from 2001 to 2002.

Instead of 70% D+1 and 87% D+3 the levels were enhanced to 77% D+1 and 90%
D+3.
In Italy a performance of 75% D+1 was the objective in 2000, 80% D+1 for 2001
and 2002; since 2003 the objective is 87% D+1.
Starting with 93% in 2001 Portugals objective increases 0.1 percentage points each
year.
The transit time objectives are usually not regionally differentiated. In 2002 the only
exception was Ireland. Ireland is divided into 27 counties for administrative purposes.
Beside the national objective a regional objective exists for mail posted and delivered
within the same county (94% D+1 for single piece items only). These regional objectives
formally continue to exist in 2003 although now, after having increased the national
objective to 94% D+1, it is equal to the national objective.
Furthermore, in some countries, for example in Denmark, Finland, Greece or the UK,
certain delivery routes are excluded from national transit time objectives. These
exeptions concern rural areas being difficult to access and offshore islands where
postal services depend on the availability and timetable of local ferry services. Apart
from Greece (7% of all routes) these exemption only concern a marginal percentage of
routes.
Figure 3-8 gives a summarising overview over the different levels of the D+1 transit time
objectives being in effect in 2003 across the Member States. In the further course of our
survey we will compare the actual performance with the performance aimed at.
43
Final Report
Regulatory D+1 objectives for domestic 1st class mail in the EU

States in 2003
Figure 3-9:
100
97
95
95
95
95
94
93,2
92,5
92
90
87
85
85
84
82
80
80
75
DK
SF
LU
NL
IE
PT
UK
BE
IT
SE
FR
EL
DE
ES*
AT*
Domestic parcels
Regulatory transit time objectives for domestic parcels exist in eight Member States:
Denmark, France, Germany, Italy, Luxembourg, Portugal, Spain and the UK (see Figure
3-10). Moreover, in Austria a regulatory objective (90% D+2) will be introduced in 2004.
Voluntary objectives with respect to the transit time of parcels exist in Finland and
Sweden.
Figure 3-10:
Transit time objectives for packages and parcels
No objectives:
AT, BE, EL, IE, NL
Regulatory:
DE, DK, ES, FR,
IT, LU, PT, UK
Voluntary: SE, SF
In Spain and Austria no regulatory D+1 objective for domestic 1st class mail in 2003.
44

The definitions of the national objectives vary substantially. While Denmark and
Luxembourg have D+1 objectives, other Member States allow for longer transit times as
shown in Table 3-5.
Table 3-5:
Member State
Transit time objectives for packages and parcels in 2003

Packages/ parcels
D+1
DE
D+2
D+3
D+5
50%
75%
80%
DK 1
99%
ES
FR 2
85%
IT
90%
LU
95%
PT
SE
91,7%
3
SF 4
97%
95-96%
UK
1.
2.
3.
4.
*
D+10
90%
99.9%
Only C2C parcels. For B2B and B2C parcels 100% of the parcels shall be delivered within D+1.
This objective only applies to the tracked and traced parcel Collisimo.
Voluntary objective only for B2B parcels.
This is a voluntary objective for parcels. The exact objective level for parcels is depending on the product.
Additionally, 98% of the parcels with same-day delivery (D+0) shall accomplish this claim.
In Norway 85% D+4 and 97% D+6 are implemented as regulatory objectives.
As an exception, the Danish regulation does not differentiate with respect to regional
aspects but to market segments. Different objectives are set for parcels posted from
consumers to consumers (C2C), from business customers to private households (B2C)
and from business customers to business customers (B2B)
Other domestic postal items
In many countries transit time objectives are defined for other domestic postal items, i.e.
2nd class mail, direct mail, newspapers and periodicals, and other publications. Figure
3-11 gives a general overview over the number of Member States that provide these
services. It also points out if a regulatory or voluntary objective is set.
45
Final Report
Figure 3-11:
Transit time objectives for other domestic postal items within the
universal service
2nd class
Direct mail
Newspapers
Other publications
0%
100%
Regulatory objective
Voluntary objective
No objective
No provision
Table 3-6 specifies these regulatory or voluntary objectives for the Member States. For
2nd class mail the common transit time objective is a delivery within 3 days (D+3). The
objective level varies between 92% in Italy and 98,5% in the UK. Only the French set a
lower, 4 day delivery objective (97% D+4). For direct mail regulatory objectives are in
effect in France and the UK. Like Belgium, Denmark and Portugal the UK also have
regulatory objectives for the delivery of newspapers and/or periodicals. An objective for
other catalogues only exists in Portugal (the same like for newspapers/periodicals).
46

Table 3-6:
Member
State
Transit time objectives for other domestic postal items in 2003

2nd class mail
Direct mail
BE
Newspapers/ Periodicals
Other
publications
(e.g. books)
82% distributed before 7.30 a.m.
DE 1
DK 2
95% D+4
97% D+3
97.5% D+1
99.1% D+2
100% D+1 (newspapers)
97% D+2 (periodicals)
97% D+4 (mass sendings of
magazines)
EL 1
FR
IT
100% D+5
100% D+5
97% D+4
97% D+7
planned
95% D+5
96% D+3
85% D+3
98% on date of issue
92% D+3,
97% D+4,
99% D+5
PT
96% D+3
SE
97% D+3
SF 6
96% D+3
UK
98,5% D+3
91% D+1
90,5% D+1
99,9% D+6
97,5% D+3
97,5% D+3
96% D+3
97,5% D+7
1.
2.
3.
4.
5.
6.
*
Voluntary objectives.
Objectives for newspapers and periodicals are regulatory but their levels are set by the operator.
nd
Additionally, regional objective for 2 class mail: 90% D+2 intra-departmental zone.
The objectives are regulatory except for the direct mail objective.
nd
This objective is voluntary and applies only for 2 class bulk mail.
Voluntary objectives. Delivery of newspapers and periodicals in Finland isnt part of the universal service.
nd
In Norway 85% D+4 and 97% D+6 objectives for 2 class letters are set by licence.
Royal Mail does not have a special newspaper service. Thus, the British objective is for
Presstream services in general (for magazines published weekly, fortnightly or
monthly). Magazines are individually addressed and enveloped and are pre-sorted by
the publishers to mail centres and delivery offices. Hence, the UK objective is for
periodicals rather than newspapers. As the Royal Mail Product portfolio is characterised
by a broad variety of services28 the British regulation accommodates to this multiplicity
of services with highly differentiated transit time objectives (see Table 3-7). Looking at
this variety of transit time regulations the degree of variation among the Member States
becomes obvious.
28 Besides Presstream, 1st and 2nd class mail (each with diverse attributes) Royal Mail provides a service
called Mailsort encompassing pre-sorted items with a least number of 1400 direct selections. This
service encloses direct mail.
47
Final Report
Table 3-7:
Transit time objectives in the UK

st
1 class
(D+1)
2nd class
(D+3)
Stamped & metered
92,5%
98,5%
Postage Paid Impression
90,6%
97,4%
Response Services
90,3%
97,5%
Products
Special Delivery
99%
Mailsort 1 (D+1)
91%
Mailsort 2 (D+3)
Mailsort 3 (D+7)
Presstream 1 (D+1)
Presstream 2 (D+2)
Direct Mail
(variable)
Press
(variable)
91%
97,5%
97,5%
97,5%
90,5%
97,5%
st
Additionally, for all these products objectives are defined with a longer transit time, e.g. in the category of 1 class mail
99,9% of stamped and metered items shall be delivered within 4 days.
Cross-border letter mail:

An important objective of the Postal Directive is to improve the quality of postal services
within the Community. Against this background the Directive has explicitly set transit
time objectives for cross-border mail: 85% for D+3 and 97% for D+5 for the fastest
standard category of service. The cross-border objectives laid down in the Member
States and the EFTA States throughout comply with the demands of the Postal
Directive, with the exception of Greece29 where there is an adjustment process: in
reaction to performance improvements the transit time objectives for cross-border
priority mail have significantly been increased in the last three years (see Appendix MS
for more detail). Full compliance with the EU objectives can be expected within the next
years.
Cross-border parcel services:
A cross-border transit time regulatory objective for intra-Community parcels is laid down
within the German regulation. 80% of the parcels have to arrive at the office of
exchange within 2 days. The same is planned in Austria, but with a 90% level.
Voluntary transit time objectives for cross-border parcels are in effect in Finland and
Portugal. The Portuguese USP intends to deliver 95% of the intra-Community parcels
within 7 days. 95% of the parcels to and from other destinations are intended to be
delivered within 10 days. In Finland the objective depends on the specific product and
the destination area and spreads from D+1 to D+6 (in each case 98% of affected
parcels).
29 in 2003: 85% D+1 for outgoing mail and 80% D+1 for incoming both only valid for those Member
States with a direct flight connection.
48

3.2.2.1.2
Loss and delay of postal items
Regulatory objectives
As it is shown in Figure 3-12 a regulatory objective with respect to the loss and delay of
postal items is only set in Portugal. In this Member State, a dynamic increase of
objective levels over time is implemented. The objective refers to substantial delay
(domestic 1st letter considered as substantially delayed after 10 days; domestic 2nd
class letter after 15 days). While in 2001 maximum 1,8 of all domestic priority and
non-priority should be affected by substantial delay, the objective in 2002 was 1,7.
For 2003 not more than 1,6 of domestic priority and non-priority postal items affected
by substantial delay will be acceptable.
Figure 3-12:
Objectives with respect to loss of mail in 2003
voluntary objective:
DK
no objective:
AT, BE, DE, EL,
ES, FR, IE, IT, LU,
NL, SE, SF, UK
regulatory
objective: PT
Until April 2003 in the UK Royal Mail was obliged by its licence to provide estimates of
overall loss and delay to USO products. The USP had to deliver 100% of items within
15 working days of their particular due date. As a proxy for loss undelivered items after
this delay should be measured as part of the end to end quality measurement surveys.
This has been done by building up estimates of individual contributary causes (e.g.
misdelivery) which have been assessed in a variety of ways ranging from individual
surveys and crime incident recording to rather rudimentary assumptions. Several
attempts to measure loss using these surveys have been very unsatisfactory.
Therefore, the NRA and Postwatch (the UK Postal Consumer body) have recently
abolished the objective.
Voluntary objectives
A voluntary objective is applied by the Danish USP. Here not more than a rate of
0,01 of all letters and parcels affected by loss or delay will be accepted.
49
Final Report
Regulatory requirements for measuring loss and delay

Although there are no objectives laid down, regulatory requirements to measure the
number of lost or delayed mail items may exist in some Member States. Besides
Portugal and the UK this only applies to Sweden. In France the requirement to measure
the rate of lost mail is under discussion. The French NRA considers introducing an
obligation to measure the rate of loss of insured items.
Voluntary measurement of loss and delay
Apart form Denmark, Sweden and United Kingdom, measurements of the rate of loss
and damage are undertaken, on a voluntary basis, in Belgium, Finland, Greece and
Luxembourg as well as in Iceland and Norway. The Belgian and the Irish NRAs
consider requiring to measure the rate of loss and damage of registered mail in the
future in case standardised measurement methods can be implemented.
In total, loss and substantial delay is measured in more than half of the Member States
(8), even though only two of the USPs involved are required to do so by regulation.
Figure 3-13:
Measurement of lost mail
no measurement:
AT, DE, ES, FR,
IE, IT, NL
requirement: PT,
SE, UK
voluntary
measurement: BE,
DK, EL, LU, SF
3.2.2.1.3 Access to universal postal services

The Postal Directive requires from the USPs in the Member States a daily collection at
least five days a week. This minimum requirement is met in every Member State as well
as the two EFTA States which answered the questionnaire. In some regions there are
even two collections per day. Moreover, the Directive aims for a reasonable and good
access to the postal network for all customers. Access conditions are required to be
transparent and non-discriminatory. Thus, Member States have to ensure a customeroriented density of points of contact (i.e. post offices) as well as of points of access
50

(especially letter boxes). According to a study carried out by CTcon these requirements
are more or less implemented by all Member States.30 Figure 3-14 gives an overview
over the number of states having implemented regulations with respect to different
aspects of the access to the postal network (for details see appendix MS).
Figure 3-14:
Regulatory requirements with respect to the access to the postal

network
Daily clearance time
Queuing time
Minimum opening hours
Information about next

collection
Marking last collection
Provided information
Minimum services
10
Nonetheless, the regulatory obligations with regard to post offices and letter boxes are
very heterogeneous.
Concerning letter boxes the density of posting points is regulated in some Member
States. For instance in Belgium letter boxes must be distributed across the whole
territory in a well-balanced way. At least one letter box per district must have the last
collection carried out at 5 pm or rather 7 pm in communities where justified (based on a
yearly evaluation of the needs of the customers). The other letter boxes must give
information on the nearest letter box where a later deposit is possible.
30 CTcon (2001), Study on the conditions governing access to universal postal services and networks.
51
Final Report
Concerning post offices, the situation is similar. For example, Germany regulates the
total number of post offices subject to rules of distance. In Belgium and Finland at least
one post office or postal service point in each Community is required. In contrast, in
Ireland the number of post offices is not regulated at all. In Austria and Greece
requirements with respect to the hours of business are set. The post offices have to be
opened for at least 20 hours and 30 hours per week respectively. In Luxembourg the
requirements for the hours of business depend on the location of the offices (urban or
rural). In Belgium the access to postal offices must be ensured at least a few hours per
week out of the working hours.
In many Member States it is mandatory to provide certain information in the post offices.
In most cases the general contract terms and conditions as well as price lists must be
accessible (e.g. Denmark). Moreover, actual updated information about the services
shall be provided. Requirement for minimum services encompass in most cases the
provision of universal postal services.
In Spain and the UK specific requirements with regard to the average waiting time in
post offices are set. In Belgium and Portugal in addition to that queuing time objectives
have been implemented. The maximum waiting time according to the Belgian regulation
is 4 minutes. However, due to the forthcoming secondary postal legislation this
objective will be revised. In Portugal the average waiting time for customers shall not
exceed 3 minutes and 35 seconds.
Figure 3-15:
Maximum queuing time as QoS objective
regulatory objective:
BE, PT
no objective:
AT, DE, ES, FR, IT,
LU, NL, SE, SF, UK
voluntary objective:
DK, EL, IE
Post Denmark has set a voluntary queuing time objective. At least 85% of the
customers shall not wait longer than five minutes to be served. The Greek USP aims at
an average waiting time of not more than five to eight minutes. In Ireland 90 percent of
the customers shall be served within five minutes.
Apart from Denmark, Greece and Ireland where voluntary objectives exist there are no
queuing time objectives set across the Community (see Figure 3-15). In the UK a
52

waiting time objective has recently been abolished as a result of the licencing process
for 2003/2004. It provided for at least 94 percent of the postal users being served within
five minutes.
In Finland voluntary objectives with respect to minimum opening hours, average waiting
time, minimum service portfolio, access to information about postal services and
appearance of the postal outlet are laid down in different manuals. However, the
performance is not separately measured. This information is to be gathered by
comprehensive customer satisfaction surveys.
Summarising, the national regulatory provisions to guarantee a reasonable and good
access for all customers differ to a high degree.
3.2.2.1.4 Delivery of postal items

The Postal Directives requirement to deliver at least every working day is met by all
Member States. Figure 3-16 gives an overview over those countries that even outperform this EU objective. In Denmark, France, Germany, Italy, the Netherlands and the
UK a delivery on Saturdays is also provided.
Figure 3-16:
Deliveries per week
six deliveries: DE,

DK, FR, IT, NL, UK
five deliveries: AT,
BE, EL, ES, IE, LU,
PT, SE, SF
Although the licence requires Royal Mail only to deliver parcels five days a week, in the
UK these items are also delivered on Saturdays together with the letter mail. In contrast,
in Denmark parcels are only delivered five days a week, whereas Saturday delivery of
letter items forms part of the universal service obligation. In Belgium and Luxembourg
the USPs are obliged to deliver newspapers on Saturdays, but not other mail. In
Final Report
53
Austria, Finland, Greece, Ireland, Portugal, Spain and Sweden Saturday deliveries do
not exist at all.31
In some countries daily delivery can not be guaranteed in remote locations. An example
for such an exception from daily delivery is Greece. In this Member State 7% of all
routes are excluded because of their difficult access (islands, highlands, rural areas).
Due to logistical restraints a few households of the Scandinavian countries in rural
areas or on remote islands are provided with service less than five days a week. A
small number of exceptions to the requirement for daily delivery to the door exist in the
UK for reasons of health and safety or difficult access conditions. The majority of these
excepted households are provided with a daily delivery to an alternative delivery point
(such as a curbside box). In rural Irish areas deliveries to mailboxes located on or
adjacent to the addressee's home or premises rather than to the door is a small but
emerging trend, too.
In the Scandinavian Member States there are requirements with respect to the latest
time of delivery. In the 200 largest Swedish cities delivery must be carried out before 1
pm and in the rest of the country before 3.30 pm. In Finland the latest delivery time is 4
pm. Very differentiated provisions are applied in Denmark. Delivery of letters to private
addressees has to be finished before 1 pm, to business addressees before 10 am. An
early delivery must be available for customers using post boxes or paying an extra
surcharge for very early delivery. Parcels must be handed over to business addressees
sooner than 10 am and to shops previous to 1 pm. The delivery of parcels to other
recipients including private consumers must be completed by 9 pm.
In the UK the postal licence simply requires a single delivery every working day to the
home or premises of every individual in the UK. Nonetheless, urban areas generally get
two deliveries a day, rural areas one delivery a day. There are voluntary objectives to
complete the first delivery in urban areas by 9.30 am and in rural areas by 1.30 pm.
However, Royal Mail will move to one delivery a day for all areas over the next two
years. Thus, these objectives will be substantially altered as part of the move to a single
daily delivery.
3.2.2.1.5 Access to information

According to Article 6 of the Postal Directive the USPs have to provide the customers
with sufficiently detailed and updated information on the universal service, particularly
on the general conditions of access to the services, on prices and on quality levels. The
information has to be published in an appropriate manner. Figure 3-17 illustrates the
31 In Iceland mail is delivered five days a week. In Norway delivery also takes place on Saturdays.
54

variety of information provided by the national USPs, either because of a regulatory

obligation or on a voluntary basis.
Figure 3-17:
Postal code system
12
Loss & damage
Access to postal network
Complaints and redress

procedures
12
Products and prices
13
Transit times
13
Regulatory requirement
Voluntary provision
In all Member States regulatory requirements with respect to the access to information
have been implemented. These provisions focus on information about products and
prices, transit times as well as complaints and redress procedures (see appendix MS
for details).
3.2.2.1.6 Complaints and redress procedures

The Postal Directive requires Member States to ensure that there are adequate
consumer protection measures in place. Article 19 imposes an obligation on the USPs
to publish once a year information on the number of complaints and the way they dealt
with. The regulatory impact of this aspect of the Postal Directive has been significant, as
national legislations in the Member States have made specific organisations
responsible for dealing with complaints.
55
Final Report
Figure 3-18:
Statutory points of contact
n/a
NL
only NRA
NRA & 3rd party
only USP
DE, DK
AT
IT, SE
BE, FR,
IE, UK
USP & 3rd party
LU, PT, SF
NRA & USP
NRA & USP & 3rd party
EL, ES
As Figure 3-18 points out, dissimilar provisions have been implemented in the Member
States as regards the treatment of complaints. In Austria, Denmark and Germany the
USP is not required by national law to constitute a point of contact. The statutory point
of contact in these Member States is the NRA, although the USP might have customer
complaint procedures of his own. In Austria the Central Postal Services Office
(Postbro) is additionally involved. On the contrary, in Italy and Sweden all complaints
are directly referred to the USP. The NRAs have not set up a point of contact. However,
if users complaints to the USP have not been satisfactorily resolved, the Italian NRA
provides an opportunity of appeal. The Swedish regulator does not act as a court of
appeal for customers who are not satisfied with Sweden Posts handling of their
complaints. They merely have the possibility to contact their local consumer guides or
the National Board for Consumer Complaints in order to try to reach a settlement.
In Finland, Luxembourg and Portugal both the NRA and the USP establish a point of
contact. As a general rule, the USP is the first point of contact for customers wishing to
file a complaint. The USP is primarily engaged in the handling of the complaints (point
of action). The role of the NRA is more to supervise that the operator provides adequate
complaints and redress procedures than to deal with individual complaints. Only in case
of disagreement between the customer and the USP shall the NRA become involved
either as an arbitrator or in some cases referring the dispute to either the courts or, if
available, a consumer body for resolution. Such a consumer organisation or
56

ombudsman is established in seven Member States: Greece and Spain (working

together with the USP and the NRA), in Belgium, France, Ireland and the UK (only
working together with the USP) and, as mentioned above, in Austria (only working
together with the NRA). If customers are dissatisfied with the result of their disputes
they may file their complaints at this second instance. The ombudsman respectively the
consumer organisation will then seek a solution acceptable to both parties and submit a
recommendation.32
The majority of Member States do not have a consumer body dealing specifically with
postal customer complaints. However, the UK is an exception in this respect. Postwatch
has been established as a constitutional body protecting and promoting the rights of
postal customers. Postwatch represents the interests of customers of all licensed postal
operators and has a very close relationship with the other UK NRA, Postcomm. It has a
strong position requiring the USP to set up complaint procedures. Postwatch analyses
complaints and their treatment, especially with regard to quality standards and prices.
All USPs reported that they established a specialized point of contact for the treatment
of complaints independently from regulatory requirements. Furthermore, all USPs have
installed a standardised procedure to handle complaints. This is meant to ensure an
effective treatment of users requests at all levels within the organisation of the USPs.
Figure 3-19:
Maximum handling times of complaints as QoS objectives
Regulatory:
BE, ES, FR,
IT, LU, SE
No objectives:
AT, DE
Voluntary:
DK, EL, IE, NL,
PT, SF, UK
Regulatory objectives with respect to the maximum time accepted for the handling of
complaints are laid down in six Member States. In the other Member States, the USPs
32 In Norway the USP is in charge for the handling of complaints. In Iceland both USP and NRA provide
a point of contact.
57
Final Report
implemented voluntary objectives whereas in Austria and Germany there are not any
objectives in this respect (see Figure 3-19). In Italy and Sweden the USPs have set up
own temporal thresholds for the dealing with complaints in addition to the regulatory
objectives. Depending on the application of EN14012 it is possible that a regulatory
upper time limit for the handling of complaints will be introduced in Ireland in the near
future.
Figure 3-20:
Maximum handling time objectives for domestic mail (in days)
SF
IE
7
10
14
EL, SE, UK
DK, NL
30
PT
IT
40
BE, ES, FR, LU, SE
30
50
IT
As shown in Figure 3-20, the voluntary handling time objectives for domestic mail
generally allow for shorter time intervals than the regulatory ones. The accepted time
spreads from 5 days in Finland to 14 days in Denmark and the Netherlands. Exceptions
are Portuguese CTT and Poste Italiane with objectives of 30 and 40 days respectively.
In Italy this rather long period is shorter than the regulatory objective provided for (50
days). According to the voluntary maximum handling time of the Portuguese USP and
the regulatory objectives set in the other Member States apart from Italy, complaints are
to be dealt with within 30 days. A detailed overview over all objectives with respect to
the maximum handling time of complaints can be found in the appendix MS.
58

3.2.2.1.7 Customer satisfaction

Customer satisfaction surveys are an essential instrument to assess the customers
perception of quality in the USPs operations and services. In none of the Member
States precise regulatory objectives with respect to customer satisfaction are
determined. Only in France customer satisfaction in post offices has been established
as regulatory requirement in the contractual plan. However, further definitions of this
requirement do not exist. In Belgium a customer satisfaction objective is under
development. Belgian La Poste, is currently the only USP in the Community that is
required to conduct customer satisfaction surveys under the supervision of the Belgian
NRA (BIPT).33
Figure 3-21:
Use of customer satisfaction surveys by the USP
No use: EL, LU
Public use: DK, PT,

SE, SF, UK
Internal use:
AT, BE, DE, ES,
FR, IE, IT, NL
Although there are no regulatory requirements Figure 3-21 illustrates that customer
satisfaction surveys are carried out in the majority of Member States. The only Member
States where this monitoring instrument is not in use are Greece and Luxembourg. In all
the other Member States, as well as in the two EFTA States, the USPs measure
customer satisfaction on voluntary basis (except La Poste in Belgium). Six USPs have
set voluntary objectives (Denmark, Finland, Norway, Portugal, Sweden and the UK) and
also publish the results. On the other hand, the monitoring results are for internal use
only in Austria, Belgium, France, Germany, Iceland, Ireland, Italy, the Netherlands and
Spain.
Voluntary objectives concerning customer satisfaction are mainly defined and measured
using a customer satisfaction index as performance indicator. In Denmark, for example,
33 This is laid down in the new Management Contract
59
Final Report
the European Performance Satisfaction Index (EPSI) is used. This is based on a

questionnaire addressing the customers perception of Post Denmark. The questions
concern both the general image as well as specific aspects such as the waiting time in
post offices, the product and service portfolio offered, the delivery quality, the customer
service and the complaints procedures. On this basis an EPSI index for private
customers (objective: 73 points) and an EPSI index for business customers (objective:
71 points) is developed. The same methodology is used in Finland, Norway, Portugal
and Sweden (see appendix MS for detailed objectives).
In three Member States, Ireland, Portugal and Sweden, the NRA additionally evaluates
customer satisfaction: While the Portuguese regulator monitors the same criteria as the
USP, the Swedish NRA just assesses the customers use of and satisfaction with the
post offices. In Ireland the scope of the regulators surveys changes from year to year
depending on the requirements. In the UK the consumer body, Postwatch, performs its
own customer satisfaction surveys.
3.2.2.2 Setting procedure of regulatory QoS objectives

The preceding chapter 3.2.2.1 has highlighted in detail the variety of regulatory
objectives that have been implemented across the Community. Before the survey
analyses the actual QoS performance and related measurement issues the definition
process of regulatory objectives and requirements shall be looked at.
Figure 3-22:
Organisation responsible for setting regulatory QoS objectives
Ministry/Legislation
: DE
Legislation:
BE, SF
Ministry:
AT, DK, EL, LU, NL
NRA/USP:
PT
NRA:
ES, IE, SE, UK
NRA/Ministry:
FR, IT
Figure 3-22 shows that the responsibility for setting regulatory QoS objectives differs
from Member State to Member State.
In short, setting regulatory objectives is a government responsibility in eight Member
States, while it is more a regulatory issue in the remaining seven Member States.
60

In Austria, Denmark, Luxembourg, Netherlands and Spain the Ministry responsible for
postal issues lays down regulatory objectives. The same is true for three other
countries. While in France and Italy the Ministry sets the QoS objectives in co-operation
of the NRA, in Germany QoS objectives and related requirements are the result of a
legislative process on the basis of a Ministerial proposal.
In Belgium and Finland QoS objectives are set in a legislative process without the
intervention of the Ministry. In Ireland, Spain, Sweden and the UK the NRA is
responsible to lay down and implement QoS obligations. In Portugal QoS objectives are
the result of an agreement between the NRA and the USP.
NRAs and USPs are involved in the process of constituting the regulatory objectives in
most of the Member States. The NRA has, in seven Member States, a direct or joint
responsibility for setting the objectives. However, the regulator is not included in the
implementation at all in Austria, Denmark and Luxembourg. Except for Luxembourg the
national USPs are integrated in the definition process. In Belgium, Finland, Germany,
Ireland, Spain and the UK competitors are also involved in the procedure. The situation
in the Netherlands has not been taken into account as the Dutch regulator did not
provide any information.
Figure 3-23:
Involvement of important stakeholders in the definition process of

regulatory QoS objectives
USP
AT, BE, DE, DK, EL, ES, FR, IE, IT, PT, SE, SF, UK
NRA
BE, DE, EL, ES, FR, IE, IT, PT, SE, SF, UK
Customers
Competitors
BE, ES, IE, IT, PT, SF, UK
BE, DE, ES, IE, SF, UK
No information for the Netherlands.
13
11
Final Report
61
The objective setting process directly takes account of the concerns of the customers in
seven Member States. An example for this is the UK. Before the licence was issued in
2001, the regulatory authority Postcomm published a draft licence and thus consulted
all interested parties. The comments on this draft licence were taken into account in the
decision making process of Postcomm. In Portugal the NRA also invited customers
representatives to comment on the draft agreement. The Irish NRA publishes a
consultation paper inviting comments on the issues raised before making its decisions.
In seven countries (not taking account of the Netherlands) customers are only indirectly
involved or not taken account off at all. In Germany customers representatives were
invited to comment on the draft of the ordinance. These comments were taken into
consideration by the Minstry in the legislative process. In Austria customers
representatives are members of the price commission that deals with tariffs and general
conditions for services in the reserved area. In Sweden the postal users are integrated
into the process via different NRA surveys.34
3.2.2.3 QoS objectives outside the scope of universal service
As previously outlined in chapter 3.2.1.3, all USPs provide postal services outside the
scope of the universal service area in addition to universal services. Examples for those
services are express services, document exchange services, courier services,
distribution of unaddressed items or even value-added services like the guaranteed onday delivery of addressed advertising mail. In none of the Member States are regulatory
objectives set for the quality of these services. The regulation focuses on universal
services. According to the NRAs, regulation beyond universal services seems neither
legitimate nor necessary. Workable competition and free market evolution in this area
shall ensure a satisfactory service and economic results benefiting customers. In case
of dissatisfaction of the customers with the offered services on these mostly competitive
markets they can choose another operator.
Although there are no regulatory objectives set, most USPs have implemented
voluntary objectives for these services in order to monitor their business strategies.
Only a few of these objectives are published. For example Finland Post intends to
deliver 90% of all unaddressed mail within three days. Swedish Posten AB aims to
convey 97% of its hybrid mail within D+1. Moreover, the Swedish USP does not make a
difference between universal service and other services in some parts of its business.
For example, Posten ABs objectives with respect to customer satisfaction are set
taking account of the quality perceived by the customer. Here the perception of the
quality of service (for example the reliability) is monitored with respect to all services.
Hence, it is difficult to separate the perception of universal services and non universal
services.
34 In Iceland regulatory QoS objectives are set by the Ministry and the NRA, in Norway only by the latter.
In both countries the USPs are involved in the procedure, but neither competitors nor customer
groups.
62

3.2.2.4 QoS objectives for other postal operators providing universal services
In 9 Member States other postal operators than the USPs provide postal services within
the scope of the universal service (see Figure 3-24). In France, Germany, Greece,
Sweden and the UK the USP is currently the only provider of universal services.
Figure 3-24:
Other postal operators providing universal services
n/a: NL
no: DE, EL, FR,
SE, UK
yes: AT, BE, DK,
ES, IE, IT, LU, PT,
SF
QoS objectives for other postal operators than the USPs will only be legally defined in
Belgium (they are not specified yet but will be defined in the upcoming secondary
legislation). In all the other Member States specific objectives for the services offered by
other postal operators do not exist. In Germany QoS objectives are defined for the
universal service operator in general (not for the USP in particular)
3.2.3 Performance and measurement of QoS in the EU

Following the review of the QoS objectives, the present section reviews the actual
performance of the Community USPs and the applied measurement techniques.
3.2.3.1 Transit time
3.2.3.1.1 Intra-Community cross-border letter mail services

The comparison of the USPs transit time results for single-piece priority and first class
cross-border mail shows that the performance has continuously improved over the past
few years (see Figure 3-25 below). On average, the performance now exceeds the
objectives of the Postal Directive. In 2002, 93.5% of single piece intra-Community
cross-border mail was delivered to the final addressee within three days of posting
(D+3), compared with only 69.1% in 1994. Moreover, 98.8% was delivered in D+5,
compared with 92.4% in 1994.
63
Final Report
Figure 3-25:
Intra-Community overall performance in D+3 (single piece items of

correspondence of the fastest standard category)
100
95
93,5
92,5
92
90,7
90
85,6
EU objective
85
80
1998
1999
2000
2001
2002
Source: IPC UNEX Year Results 2002
On average in 2002 the end-to-end transit time was 2.2 days (see Figure 3-26).
Figure 3-26:
Average delivery days intra-Community cross-border mail
2,6
2,5
2,3
2,3
2,3
2,2
1,5
1998
1999
Source: IPC UNEX Year Results 2002
2000
2001
2002
64

As Figure 3-27 shows, the average D+2 delivery performance reached 76.7% in 2002.
This means that today more cross-border priority mail is delivered in D+2 than was
delivered in D+3 in 1994.
Figure 3-27:
Cumulative performance in 2002
100
93.5
98.8
97.5
90
92.4
80
99.3
96.2
99.6
98
99.7
99.8
98.9
99.3
99.8
99.6
84.3
76.7
70
69.1
60
50
43.5
40
30
20
10
15.4
7.7
0
D+1
D+2
D+3
D+4
D+5
1994
D+6
D+7
D+8
D+9
D+10
2002
Source: IPC UNEX Year Results
Besides the average transit time, the consistency of performance is another important
indicator of transit time quality. A closer look on the country-to-country relations reveals
that 81% of the intra-Community mail flows now meet or top the 85 percent objective,
up from a half in 1998, and one third in 1994.35
In 2002 most of USPs have probably realised a D+3 performance over 90 percent with
respect to the entirety of their mail streams.36 According to the Postal Directive the
objectives (D+3 85%, D+5 97%) shall also be met for each of the bilateral flows
between two Member States (currently 210 relations). About one out of six county-tocountry mail streams fail to meet the 85% D+3 requirement (see Figure 3-28).
35 For more details see IPC, UNEX Year Results 2002.

36 IPC do not provide such country-specific transit time results. However, the high performance of some
countries for almost all of their bilateral flows induces an overall result over 90 percent.
65
Final Report
Figure 3-28:
Share of bilateral mail flows meeting the cross-border D+3

objective in 2002
9,0%
30,0%
8,6%
<80
95-100
80-85
85-90
90-95
15,2%
37,1%
The shortcomings mainly affect relations from/to Greece. The Spanish USP and to a
less degree the Austrian USP have also problems to meet the objectives.
Figure 3-29:
Country-specific number of bilateral relations missing the objective

in 2002
16
14
12
10
8
6
4
2
0
BE
DE
DK
FR
SE
Outgoing D+3
LU
NL
UK
Outgoing D+5
PT
IT
Incoming D+3
SF
IE
AT
Incoming D+5
ES
EL
66

Figure 3-29 illustrates for each Member State how many outgoing or incoming mail
streams fail to meet the D+3 and D+5 objective.37 Greece did not achieve the 85% D+3
and the 97% D+5 objectives for six outgoing and all incoming flows respectively.
Nevertheless, quality improvements in Greece have been significant over the past years
(see appendix MS for details). If this trend continues it would be possible that Greece
will reach the objective for most of its bilateral mail flows in 2004.
3.2.3.1.2 Domestic letter mail services

Domestic 1st class mail
The transit time performance for domestic 1st class mail is outlined in Figure 3-30. In
seven Member States the regulatory objectives have been reached.38
Transit time objectives and performance for domestic 1st class mail
(D+1)
Figure 3-30:
AT*
ES*
48
EL
77
IT
80
DE
76,8
FR*
84
95,4
80
SE
84
85
82,7
BE
IE
UK
PT
NL
LU
SF
DK
40
50
60
Regulatory objective
70
80
96,2
91
90
92
91,6
92,1
93,1
93,1
95,6
95
97,2
95
95,8
95
93,6
97
90
100
Performance
37 Norway missed the D+3 objective only for 1 outgoing and 1 incoming route. Iceland fails to meet the
objective for 5 outgoing and 12 incoming mail streams.
38 In Norway 86.7% of domestic 1st class mail was delivered within 1 day (objective: 85%). In Iceland the
same objective is in effect. Here the USP achieved a performance of 87.4%.
In Spain and Austria no regulatory D+1 objective for domestic 1st class mail in 2003. The performance
data of France is from 2001.
67
Final Report
A considerable over-performance can be stated in Germany and Sweden. However, the

objectives in these countries are set at a rather low level.
In Greece, the objective has been missed significantly. Instead of the aspired 77% only
48% of domestic 1st class mail was delivered to the addressee on next day. Moreover,
major under-performance can be observed in Belgium and France. Although the
performance of the Danish USP is quite good (93.6%) it underperforms because of the
especially high regulatory objective level (97%). The Spanish USP managed to deliver
96.3% of domestic 1st class letters within 3 days (objective: 90%). 73.1% were delivered
in D+1 without having a corresponding objective (see appendix MS). In Austria an
objective did not exist in 2002. Performance data for Austria is not available.
Figure 3-31:
FR*
D+2
BE
D+2
IT
D+2
DE
D+2
LU
D+2
EL
D+3
IS
D+3
NO
D+3
SE
D+3
IE
UK
ES*
PT
88%
Objectives and performance for domestic 1st class mail with respect
to reliability
D+3
D+4
D+5
D+10
90%
92%
94%
Performance
96%
98%
100%
Objective
Concerning the reliability of 1st class letter mail most Member States have set additional
objectives with longer transit times. These objectives spread from D+2 in five countries
to D+10 in Portugal. Only in Denmark, Finland and the Netherlands there is no objective
Objectives in Austria will become effective in 2004. In Denmark, Finland and the Netherlands merely a
D+1 objective exist. For Ireland, Portugal and the UK no performance data is available. The figures for
France and Spain are those of 2001.
68

implemented that aims for the reliability of the 1st class service. Figure 3-31 illustrates
these objectives and compares their level with the actual performance in 2002.
Domestic 2nd class mail
As it is shown in Figure 3-32, the D+3 transit time objectives for domestic 2nd class mail
have been reached by almost all USPs that offer this service and face a regulatory or
voluntary objective.
Royal Mail narrowly missed the objective. In contrast, French La Poste clearly failed to
deliver 97% of its 2nd class mail within the targeted four days. Only 81.4% of the letters
were conveyed to the recipient within this time frame (see appendix MS for details).39 In
Austria, Germany, Ireland, Luxembourg and Spain 2nd class mail is not part of the
product portfolio of the USP. The Belgian and the Dutch USPs offer 2nd class service
but neither face regulatory nor voluntary objectives. The Greek USP is subject to a
voluntary D+5 objective. However, performance data is not available.
Transit time objectives and performance for domestic 2nd class mail
(D+3) in 2002
Figure 3-32:
FR
D+4
DK
D+3
IT
D+3
PT
D+3
SE
D+3
SF
D+3
UK
D+3
75
81,4
97
97,2
97
91,8
90
97,4
95,9
97,1
97
96,4
96
98,3
98,5
80
85
Objective
90
Performance
95
100
39 The Norwegian USP managed to deliver 96.6 percent of the domestic 2nd class letters within four days
(objective: 85%).
69
Final Report
Domestic parcels
For domestic parcels the Danish and the British USPs did not meet the regulatory
transit time objectives (see Figure 3-33). The Danish performance is quite good (95.9%
of the parcels arrived in one day). The underperformance is due to a very high
regulatory objective level (99% for C2C parcels).40 In the UK the transit time
performance has constantly gone down recently (see appendix MS). As a
consequence, Royal Mail clearly missed the 90% D+3 objective in 2002 (81.6%). For
Finland and Germany it is reported that the objectives have been achieved in 2002.
However, explicit performance data is not available.41
Figure 3-33:
Transit time objectives and performance of parcels
DK
D+1
95,9
SE
D+1
97
97
LU*
D+1
97,4
99
95
85,9
D+2
FR
D+3
ES*
85
71
50
PT
D+3
UK
D+3
91,6
91,6
81,6
90
96,6
D+5
IT*
40
60
90
80
Objective
100
Performance
Direct mail services

Direct mail services are not explicitly offered by the USPs of Denmark, Luxembourg,
Netherlands and Sweden. In Austria, Belgium, Ireland, Italy and Spain the USPs neither
face a regulatory nor a voluntary objective. Figure 3-34 compares all (regulatory of
voluntary) objectives currently in effect in the Member States with the actual
performance in 2002 (for details see appendix MS).
40 In Denmark the QoS objective level is in general very demanding.

41 Performance in Norway: 95.9% D+4 (objective: 85%).
Figures from 2001.
70

Figure 3-34:
Transit time objectives and performance for direct mail in 2002
UK
D+1
SF
D+3
91
96,7
85
78
95
96
D+4
DE
D+5 }
PT
D+5
95
95
FR*
D+7
97
94,1
Objective
Performance
Newspapers and/or periodicals

For newspapers and/or periodicals regulatory objectives have been implemented in
Denmark, Portugal and the UK. Figure 3-35 illustrates the performance in 2002 (for
more details see appendix MS). As the regulatory objective in Belgium became effective
only in 2003, performance data is not available yet. The German performance narrowly
missed the voluntary objective (see appendix MS for details).In Finland the delivery of
newspapers and/or periodicals is beyond the universal service. However, the Finnish
USP provides this service and has set a voluntary objective: 98% of periodicals shall be
delivered on the date they are issued. This objective was met during the last four years.
Figures from 2001.
71
Final Report
Regulatory transit time objectives and performance in 2002 for

other domestic services
Newspapers,
periodicals, books
D+3
Presstream 1
D+1
Presstream 2
D+3
Newspapers
D+1
Magazines
D+2
Mass sendings of
magazines
D+4
97,5
95,9
93
90,5
DK
UK
PT
Figure 3-35:
99,1
97,5
97,1
100
86,6
97
98,1
97
80
90
Objective
100
Performance
3.2.3.1.3 Measurement issues

The performance data above gives a first impression of differences in quality of postal
services provided in the Member States. However, it has to be borne into mind that this
data has been generated on the basis of different methods of measurement and
therefore cannot be directly compared.
The transit time performance of single piece intra-Community cross-border priority mail
is measured by IPC. Based on a continuous measurement method (UNEX) IPC
publishes results every sixth months. Furthermore, IPC measures the transit times of
EPG parcels for their members.42 In some Member States measurement of crossborder priority mail to other countries outside the EU is conducted as well. In most
cases the measurement is limited to certain flows, e.g. in Belgium only mail streams to
Switzerland, Norway, Iceland, USA, Canada and Japan are taken into account. In
Finland a continuous regular measurement is conducted for mail streams from/to some
42 EPG parcels guarantee a day-certain delivery. The process of conveyance is monitored by track and
trace. QoS standards are backed by penalties for late delivery.
72

Accession Countries. On a irregular basis the transit time to other countries is also
measured there. For cross-border parcels the transit time is regularly measured only in
Portugal using a methodology approved by the Portuguese NRA.
All regulatory domestic objectives are measured frequently except for the recently
implemented newspaper objective in Belgium. The latter shall irregularly be controlled
three to four times a year by the Belgian NRA. In Germany the parcel objective is
measured by the USP but the track and trace method includes only parcels while
packages are not taken into account. Moreover, the measurement technique used by
the USP is not approved by the NRA. This is also true for the transit time measurement
of parcels by Poste Italiane. In France the transit time performance for 2nd class and
direct mail is regularly measured but the methods applied are also not agreed by the
NRA. Besides these particular case the measurement procedures are generally
approved by the national regulator (see appendix MS for details).43
In some countries measurement is not only conducted by the USP but also involves the
NRA. Figure 3-36 illustrates which organisation carries out transit time measurement of
domestic 1st class letter mail in the Member States.
Figure 3-36:
Organisation responsible for the measurement of transit time of 1st

class letter items
NRA/USP: BE, DE,

EL, IE
USP: DK, FR, LU,

NL, PT, SE, SF,
UK
NRA: ES, IT
Ministry: AT
In eight Member States (Denmark, Finland, France, Luxembourg, Netherlands,

Portugal, Sweden and the UK), only the USP measures the transit time performance of
43 In both Norway and Iceland measurement takes place continuously. Opposing to Norway, the
measurement method in Iceland is not approved by the NRA.
Final Report
73
the domestic services (the same is true for the two EFTA countries that answered the
questionnaires). The analysis is in almost all cases carried out by external companies.44
In Spain only the NRA evaluates the domestic performance by an external consultancy.
In Italy the NRA is responsible for the measurement of 1st and 2nd class mail carried out
by a consulting firm. Poste Italiane measures the performance for parcels, registered
and insured items, newspapers and other publications on its own.
In a number of Member States the domestic transit time of 1st class mail is
independently measured by both the USP and the NRA. For example, in Belgium, 1st
class performance is measured both by the USP and the NRA. Additionally, the NRA
determines the performance for newspapers whereas the USP also evaluates the
transit time for 2nd class mail via a consulting firm. In Germany, an external research
company evaluates the transit time performance for 1st class mail and newspapers and
periodicals on behalf of the USP. As mentioned above, Deutsche Post also monitors the
performance for parcels by track and trace. The German regulator additionally
measures 1st class mail. A similar situation can be found in Greece and Ireland. Apart
from the USP the NRA measures the transit time of 1st class mail (by external firms in
both cases).
The transit time measurement in Austria shows some peculiarities. The performance for
domestic parcels including insured items is controlled by the USP itself. However, the
ministry is responsible for measuring 1st class mail. This is carried out by an authorized
institute.
The measurement of 1st class performance is based on continuous techniques in all
Member States except Austria where performance figures are the result of an annual
evaluation. Furthermore, it should be pointed out that there are no requirements set in
Austria so far. So, measurement takes place without any regulatory or voluntary
objective being set.
The measurement methods vary enormously between the Member States. This makes
it very difficult to compare the quality performance among them. Concerning 1st class
mail Figure 3-37 gives an overview if specific features have been covered by the
applied measurement designs. If the performance is measured by both the USP and the
NRA the characteristics of the USPs measurement is considered as the forthcoming
standard EN 13850 holds them responsible for the implementation.
44 The Danish USP determines the transit time performance of newspapers, registered and insured
items and domestic parcels by own measurement. An external consulting firm measures transit times
st
nd
for domestic 1 and 2 class mail.
74

Figure 3-37:
Characteristics of the sample design for the transit time

measurement of domestic 1st class mail45
Single-piece and bulk
All types of induction
All weight classes
10
All formats
10
All types of delivery
10
All regions and

distances
15
The sample design takes account of single piece and bulk items only in five countries.
This means that only a minority of 1st class mail is monitored in these Member States. In
the UK the mandated agency runs separate surveys in order to do so. In Belgium,
Germany, Ireland and Luxembourg the 1st class objectives just concern single piece
items. However, in Finland, Greece, France, Italy, Portugal and Spain the surveys
merely include single piece letters as well although the 1st class transit time objectives
in those Member States also refer to bulk items.
Variations in terms of representativeness of the measurement go beyond the single
piece vs. bulk mail issue. More specifically, only ten Member States monitor all formats
and weight classes whereas the sample designs take account of all regions and
distances in all Member States (see appendix MS for details). In ten Member States all
types of delivery are covered. Partly among others, deliveries to P.O. boxes are
excluded from measurement in Belgium, the Netherlands, Portugal and the UK.
However, mail to PO boxes is generally a rather small proportion of total mail and could
45 In Norway all criteria are fulfilled. Measurement in Iceland does not cover all formats and all weight
classes.
75
Final Report
become difficult to sample accurately. Against this background it is surprising that the
Spanish NRA reported that only deliveries to P.O. boxes are included in measurement.
The sample design covers in seven Member States all types of induction (see Figure
3-38). The Finnish survey only includes the induction at sorting centres. In Portugal and
Spain this sort of posting is left out as well as the collection from senders premises and
the submission at franchised service points. The latter are excluded in Belgium and
Luxembourg, too. Moreover, the Greek, Italian and Dutch measurements do not take
account of all kinds of induction (see appendix MS for details).
Figure 3-38:
Types of induction
Agencies
Sender premises
Sorting centers
Post offices
Street boxes
10
13
14
Having this in mind a real comparison between the performance monitoring data of the
Member States is not possible. Against this background standardisation will help to
provide a harmonised, workable method for the measurement of transit times. In order
to ensure consistent application of the standardised method, an autonomous body for
auditing and controlling the measurement is needed.
76

3.2.3.2 Loss and damage of postal items

Many USPs reject measurement of loss and damage. In their view such a measurement
system would just be costly, complex and with low real validity. Thus, the high cost and
information problems deter many postal operators from measurement. In consequence,
the Austrian, Dutch, French, German, Irish, Italian and Spanish USPs do not measure
lost of mail. Like in Ireland, internal statistics on lost items might be based on the actual
number of customer enquiries received and recorded under the relevant mail category.
Only the Portuguese USP is required to measure substantial delay by a representative
sample. On behalf of CTT an independent agency conducts the study using a
differentiated methodology based on real mail flows and approved by the regulator.
Royal Mail has made several attempts to measure loss using surveys but was not
satified with this as a method. In order to deal with this effort, information about lost mail
is gathered from the customer complaints system in the other countries. There the USP
does not measure the number of lost items but the number of complaints. The related
complaints are simply counted over a certain time period.
Figure 3-39:
Definition of loss and/or substantial delay of domestic priority mail

in days
DE, SF
DK
7
10
30
ES, NL, SE
1st class
PT
17
2nd class
UK
1st class
15
10
2nd class
19
Mailsort
23
Regulatory
Voluntary
Final Report
77
A legal definition for when mail is classified as being lost or substantially delayed merely
exist in Portugal and the UK (see Figure 3-39). In both countries the definition depends
on the service and therefore on the transit time objective for the affected postal item.
For instance in the UK, items are classified as lost if they arrive over 15 working days
after due date of delivery. Comparable specifications of lost domestic mail are
voluntarily defined in Denmark, Finland, Netherlands, Spain and Sweden. In Italy a
delay of 30 days only applies for a potential loss of domestic registered mail. In other
countries lost or delayed items are not classified in terms of the number of days for
which they have been recorded as missing. In Belgium and Luxembourg domestic mail
is considered lost after unsuccessful investigations. In Ireland, enquiries from customers
relating to undelivered items, the items in question are treated as lost items unless there
is a reason to suspect delay. In France a legal definition is under development.46
3.2.3.3 Access to universal postal services
3.2.3.3.1 Network requirements

In the view of the postal users the access to the postal network is a very important
issue. As a consequence, diverse requirements regarding customers access are set in
each Member States. In order to actually become effective these obligations have to be
well monitored. Figure 3-40 illustrates implemented access requirements fulfilling this
condition.
The applied monitoring methods vary between the Member States, depending on the
specific requirements. For example, in Germany the number of letter boxes and the
latest daily clearing are monitored via consumer complaints whereas special control
procedures verify whether the number and distribution of post offices comply with
regulations. In France La Poste is required to draw up annual documents showing that
the stipulations are met. Casual inspections are applied in Luxembourg and Portugal. If
the NRA additionally measures the transit time performance then clearance frequency
and latest daily collection could indirectly be monitored by the end-to-end surveys. In
Belgium there is no monitoring of the requirements so far, but some elements will be
monitored pursuant to the new secondary legislation. As a peculiarity, the Greek
regulator has not the monitoring capability although there is an obligation to control the
adherence to the access provisions.
46 In Iceland (regulatory) and Norway (voluntary) mail is defined as lost after a delay of 30 days.
78

Complete independence in reducing the number of access points is hardly given in any
Member State. Political constraints often limit the ability of the postal operators to close
unprofitable offices. The British licence specifies the minimum density of access points,
so Royal Mail can change the numbers of access points autonomously, provided it
complies with these criteria. Groups of customers may campaign against post office
closures but cannot legally prevent them. The conditions for the German USP are
similar. Deutsche Post is not dependent on stakeholders but has to respect the
stipulations of the Postal Universal Service Ordinance (PUDLV). According to the
Finnish postal law there must be at least one postal point (post office or agency) for
customers in every municipal. Regarding letter boxes the Irish USP is required to meet
criteria laid down by the regulator as well. Moreover, it may be necessary in certain
instances to give assurances to the Minster that closure of an outlet will not result in a
marked deterioration in service to the local area. In France La Poste is legally allowed
to decide autonomously, but its part of the negotiations with the state and therefore a
political issue, too.
Figure 3-40:
Monitoring of access objectives
Queuing time
Clearance frequency
Opening hours
Letter boxes
Latest daily clearing
No. of post offices
Minimum services
8
10
In some other Member States the possibilities to reduce the number of access points
are even more constrained. Post Danmark is allowed to change the number of letter
points without consultation of stakeholders but similar conditions do not exist as regards
post offices. For the closure of post offices a detailed procedure is laid down by the
Final Report
79
Danish Ministry of Transport. According to this all relevant, local stakeholders shall be
consulted before Post Denmark decides on the closure of a post office. In Belgium all
districts must have at least one post office or postal service point. This post office can
only be replaced by a point of services with the agreement of the municipality. If La
Poste wishes to suppress a post office or an access point to postal services that is more
than five kilometres away from the nearest post office or point of postal services, it has
to be submitted to the State in the framework of a consultation process. If the
consultation does not give any result within 3 months, the USP is free to adapt its
network. The Portuguese USP has the obligation to maintain the postal network in
terms of quality and quantity, according to an agreement to be established with the
regulator. Deliberations concerning post offices must be previously communicated to
the NRA. Neither can post offices be opened or closed nor can opening hours be
changed without an ex-ante permission of the regulator. Before the NRA gives an
authorization, it asks for the opinion of municipalities. In the Netherlands a minimum
level of access (letter boxes, outlets) is fixed by law. A five year plan for outlets from
2001 to 2005 has been agreed by the Minister. In Sweden every change in the number
of post offices and each reduction of letter boxes affecting more than one person must
be reported to and authorized by the NRA.
In most Member States the USPs do not intend to change the number of letter boxes
(for details see appendix MS). In Ireland the demographic profile of the country will lead
to low increase of the amount of letter boxes (one out of every three new houses built
located in rural areas).. In Spain even a strong increase in the number of letter boxes is
planned. In contrast, in Denmark, France and Italy the USPs are determined to reduce
letter boxes. In Denmark, for example, there is currently more and more business mail
handed in by other means than letter boxes. As a consequence, Post Danmark intends
to adjust the number of letter boxes to the altered circumstances.
In Austria, Denmark, France, Ireland, Portugal and Sweden the USPs want to decrease
the number of postal outlets (see appendix MS). The context behind this common trend
are rather different. In Sweden, Denmark and Austria the reduction planned is due to
costs. In small Austrian towns and villages the revenues of postal outlets are so low that
the USP incurs a financial loss. In Denmark the number of customers has gone down
due to the fact that more and more payments, previously made at postal outlets, today
are made electronically. As part of a restructuring, some of the traditional agency run
post offices in Ireland will gradually be replaced by postal outlets. These will partly be
operated by third parties and will offer a limited range of basic services. The Portuguese
USP also intends to reorganize its postal outlet network as approximately 80 percent of
its post offices are not profitable. The British USP expects a strong decrease in its
postal outlets. The national government changes the way pensions and benefits are
paid. According to Royal Mail this will considerably reduce the income of the post office
network. Hence, the current size could not be sustained.
80

3.2.3.3.2 Queuing time

In 2002 regulatory or voluntary objectives with regard to the average waiting time in
post offices were in force in six Member States. Table 3-8 shows whether these
objectives have been achieved or not.47
Table 3-8:
Queuing time objectives and performance in 2002
MS
Objective
Performance
BE
4 min maximum waiting time
achieved
DK
85% waiting less than 5 min
81%
EL
5 - 8 min average waiting time
10 - 15 min
IE
89%
PT
3 min 35 sec average waiting time
4 min 46 sec
UK
94,1%
The measurement methods seems different across the concerned countries. In Portugal
the average waiting time is continuously measured by sampling of real customers at
post offices. The Danish USP electronically registers the waiting time. On behalf of
Royal Mail an independent research agency ran mystery shopper surveys to check the
average waiting time. Belgian La Poste uses mystery shopping and related
investigations as well. The Greek measurement system is under elaboration so that
detailed information on the applied method is not available yet.
3.2.3.4 Delivery of postal items

The conditions under which mail must be delivered vary in a number of ways. Figure
3-41 gives an overview what modes of delivery are present within the Community.
47 In Norway 93.3% of the customers were served within 10 minutes (voluntary objective: 95%).
81
Final Report
Figure 3-41:
Modes of delivery
Central places
Curbside
10
Poste restante
15
P.O. boxes
15
Premises of the
addressee
15
Delivery to the premises of the addressee is the regular mode in all Member States.
The share of this type of delivery measured as percentage of the addressees
represents across the Community between 80 percent (e.g. Germany, Italy) and 99.5
percent in the UK.
Although the proportion of postal items delivered through poste restante is negligible
in almost all Member States, this mode is like the handover to P.O. boxes provided in
every country. The USPs generally provide individual boxes in their local post offices for
those customers who want to collect their mail there. In Germany about 20 percent of
the postal items are handed out via those P.O. boxes. In many other countries this
share is between 3 and 10 percent (see appendix MS for details). In 3 countries mail is
delivered to central places. In those cases mail might be simply delivered to the post
office and must be collected by the recipient. But only in Greece a notable proportion
(10 percent) is delivered in this way. Furthermore, ten Member States provide a delivery
to curbside boxes at the end of the addressees drive. This might be more common in
rural or suburban areas, where drives are long, than in urban areas. This mode of
delivery is mostly envisaged if delivery to the premises of the addressee is not possible
due to exceptional geographical conditions. Overall the share of this mode is rather
small (3 percent in Ireland at the best).
82
Figure 3-42:

Effective monitoring of delivery obligations
n/a: NL
yes: BE, DE, EL,
IE, PT, SE, SF,
no: AT, DK, ES,
FR, IT, LU, UK
As Figure 3-42 points out, the modes of delivery are regularly and effectively monitored
in seven Member States.48 In Portugal, for instance, the quality of service results and
the system itself are audited annually by an independent company. Based on the audit
results the Portuguese regulator may determine or recommend some alterations to the
present arrangement. The Swedish USP has to report annually the number of
households excluded from five days collection and delivery respectively and has to
announce interruptions in the production process. Within the framework of its end-toend QoS monitoring system the German NRA controls for the rules of delivery.
Luxembourg is an example for a Member State without effectual monitoring. The
amount of complaints is very low so that intensive control seems unnecessary from the
viewpoint of the Luxembourgian NRA.
3.2.3.5 Access to information

The USPs use different means to make information available. Figure 3-43 shows the
channels applied by the postal operators across the Community. In almost all
countries49 specific channels are required. For instance, in ten Member States
information must be given in the annual report. Moreover, information possibly must be
circulated by leaflets, announcement in post offices or other locations open to the public
or by the USPs internet homepage. Sometimes these media of information provision
are even voluntarily applied by the USPs without any obligation. Further means are
used by some of the USPs such as press releases, call centres or announcements on
television and radio.
48 Effective monitoring also in Norway.

49 No information as regards the situation in the Netherlands.
83
Final Report
Figure 3-43:
Public locations
Website
Leaflets
Channels of information provision
Annual report
10
Post offices
10
Regulatory requirement
Voluntary provision
The transparency and clarity of the information provided by the USP via the above
mentioned channels is assessed by 9 NRAs as good and by 5 NRAs as adequate.
Neither an excellent nor a poor or unsatisfactory judgment was marked by one of
the national regulators in the questionnaire. For example, the Portuguese regulator
considers the transparency and the clarity of the information provided by CTT as good
due to the fact that it complies with the minimum requirements defined by law.
Information regarding quality of service indicators, complaints, perception surveys,
prices and characteristics of goods are published. The Belgian NRA attributes the good
transparency and clearness of information provided by La Poste to the enhanced
customer-orientation. The Austrian, France, German, Greek and Irish regulators judge
the information policy of the USPs merely as adequate. The German NRA for instance
stated that the post office employees are not always aware of all required information
and of recent changes in the service provided.
84

Figure 3-44:
Assessment of the transparency and clarity of provided information
0
Good
Adequate
Poor
Note: No information for the Dutch NRA:
3.2.3.6 Handling of complaints and redress procedures

Postal Customers can place complaints in different ways: personally at post offices, by
mail, phone, e-mail and via website or call centre. These media of complaints are
provided in every Member State besides Greece and Ireland (see appendix MS). In
Greece customers cannot notify their dissatisfaction electronically by e-mail or the
internet homepage yet. In Ireland the construction of a dedicated website is currently in
process.
Figure 3-45:
Initial acknowledgement reply
no: AT, DE, DK, IT,

PT, UK
yes: BE, EL, ES,
FR, IE, LU, NL, SE,
SF
85
Final Report
In every Member State a standardised handling of complaints is installed. In nine of

them the complaint management system comprises an initial acknowledgement reply in
case the investigation of a request probably takes longer than expected (see Figure
3-45). In Sweden the USP gives information about registration, name and telephone
number of the responsible employee within two days. Such a time limit is also given in
Belgium (8 days), Luxembourg (10 days) and Spain (15 days). In the other Member
States concerned no time period is explicitly specified (see appendix MS for more
details).
Figure 3-46 gives an impression of the categories which can be identified in the
frameworks of the national complaint management systems. Merely in Greece and
France complaints are not classified and recorded in specific categories.
Figure 3-46:
Categories of complaints
Information
Access conditions
Treatmant of complaints
6
7
8
Address change
10
Delivery/Collection
10
Mis-delivery
11
Postal personnel
11
Item lost
13
Delay
13
Damage
13
The analysis of complaints is rather difficult due to the lack of data made available by
the Member States. The data available for 8 MS shows that in almost all of them the
majority of complaints in 2002 concerned loss of mail (see Figure 3-47). Only in Greece
most complaints pertained to the delay of postal items. Moreover, a generously
proportioned share of complaints was motivated by mis-delivery and discontent with
delivery and/or collection. Most complaints in Germany in 2002 affected insured letters.
This special service prior offered by Deutsche Post was ceased that year. The resultant
huge amount of complaints completely distorts the structure of complaints as it used to
be. Thus, the German figures for 2002 are not included in the figure. In the years before
most complaints in Germany affected loss or substantial delay of postal items, too.
86

Figure 3-47:
Spreading of complaints in 2002
80%
BE
DK
EL
ES
IT
LU
SF
UK
60%
40%
20%
0%
Others
Complaints
Access
Personnel
Information
Mis-delivery
Delivery,
Collection
Change of
address
Damage
Delay
Loss
Very differentiated data is available for Portugal. The NRA quarterly obtains information
sent by the USP on the number of received and resolved complaints and average
handling time as well as the amount of received information requests (see Table 3-9).
Table 3-9:
Handling of complaints in Portugal

2000
2001
2002
Complaints
7263
8572
8935
Resolved
6619
7366
7619
Rate
91,1%
85,9%
85,3%
Information requests
12879
14362
22222
Average handling time
75
57
39
Objective
30
30
30
In all Member States but Finland and Germany explicit redress procedures are
available. The design strongly differs between the countries. In order to quote an
example, Table 3-10 illustrates the redress procedures in Ireland. Information about the
possibility of reimbursement is available in every concerned Member State.
87
Final Report
Table 3-10:
Explicit redress procedures in Ireland
Service
Reimbursement
Registered letters (domestic)
320 - 1750
Registered letters (international)
35 - 900
Insured letters (inward international only)
up to 1000
Insured parcels (domestic)
150 - 1000
Insured parcels (international)
100 - 1000
The lesser of either the amount of loss or damage
actually sustained or 40
Non-insured parcels
3.2.3.7 Customer satisfaction

Apart from Greece and Luxembourg the USPs in every Member State perform
customer satisfaction surveys. Figure 3-48 illustrates the most important issues covered
by these surveys.
Figure 3-48:
Issues of customer satisfaction surveys
Cross-border transit
time
Loss and damage
Letter boxes
2
6
7
Delivery
Complaints
Post offices
10
12
In some countries the investigations additionally comprehend the behaviour of the

postal personnel, the quality of consulting service of the call centres or the degree of
satisfaction with offered services and prices.
88

The surveys differentiate between customer groups in every Member State involved
apart from Austria and the Netherlands (see appendix MS). Business customers and
private consumers are distinguished as well as small and large customers. Only the
customer satisfaction studies of Royal Mail just concern large and small business
customers whereas private postal users are neglected.
Voluntary objectives as regard customer satisfaction are set in four countries: Denmark,
Finland, Portugal and Sweden. In the UK customer satisfaction results are measured
and published without a related public objective. Accordingly, 30 percent of all business
customers of Royal Mail are very satisfied with overall service provided. The Danish
USP missed its voluntary objectives in 2002. The EPSI index for private customers only
adds up to 70 points (objective: 73 points) and the EPSI index for business customers
even results just in 60 points (objective 71 points). As reasons for the
underperformance Post Danmark stated the recent introduction of new price and format
based pricing system for letters. Customers obviously still need to become fully familiar
with this system. Moreover, increased waiting times at post offices had a negative
impact on customers satisfaction. The Finnish USP also fails to achieve its objectives.
The general customer satisfaction index (objective 85 points) adds up to 80 points for
business customers and 73 points for private customers. The index with regard to
reliability (objective: 90 percent) makes 85 points for business customers and 87 points
for private customers. The results of Swedish Posten AB slightly fall below the
objectives. The overall customer satisfaction makes 61 instead of 62 points aimed at,
the reliability was evaluated 68 points (objective: 71 points) and the index for business
partners results in 60 points (objective: 63 points). Posten AB holds the introduction of a
new service net responsible for the underperformance. In contrast the Portuguese USP
outperforms its overall satisfaction objective (70 percent) by 8 percentage points.
3.2.3.8 QoS dimensions outside the scope of universal postal service

Regulatory objective have not been set outside the universal service. The USPs have
internal objectives for the services in this area but performance data is in almost all
cases confidential (see information concerning few exceptions in appendix MS).
Particularly for services outside the universal services USPs use alternative measures
to ensure a high quality of service. Figure 3-49 gives an overview over the extent to
which such instruments are applied in the Member States.
89
Final Report
Figure 3-49:
Application of other QoS measures
Advanced
quality control
processes
Contractual
guarantees
DK, FR, IE, PT, SF
ISO 9000
AT, FR, IE, PT
ES, FR, IE,

NL, SE, SF
3.2.4 Consequences of missing quality of service objectives

The Directive does not require penalties in case QoS requirements are not met.
Nevertheless, it requires the NRA to take corrective action for example in form of legal
consequences. But the threat of such legal consequences seems to be rather low.
Figure 3-50:
Threat of regulatory consequences in the view of the stakeholders
Complaints
5
3
Information
Cross-border transit time

Letter boxes
Loss
6
6
4
Post offices
Delivery
8
10

NRA
USP
11
90

The answers of NRAs and USPs being asked for possible consequences in case of
QoS failure expose a considerable disparity (see Figure 3-50). Penalties may be
statutory implemented in the countries, but the USPs, if they are aware of the
consequences at all, do not recognize them as a threat to their business.
So far, penalties have been implemented in three countries for five QoS objectives : in
Greece with respect to domestic transit time, cross-border transit time and delivery, in
Italy with respect to domestic transit time, and in the UK with respect to cross-border
transit time. Figure 3-51 gives an overview on possible penalties that could be imposed
on USPs across the Community if they do not manage to meet the transit time
objectives imposed on them. Again the perception of possible consequences differs
between postal operators and regulators. Most of the NRAs stated that there is a
possibility of fines whereas USPs do not realise this threat but fear compensations in
first line.
Figure 3-51:
Kind of penalties in case of transit time failure
Loss of public grants
Compensations to
Customers
Price setting limitations
Fines
USP
NRA
7
2
2
3
5
10
Final Report
91
Although most management contracts with the USPs provide for penalties some NRAs
seem to fear their actual imposition. Possibly they feel penalties would be obstructive to
the growth of the operator and preferred to play a more supportive role. By way of
example for further problems, the Luxembourgian NRA does not supervise the
compliance of objectives and requirements due to a lack of adequate resourses for
monitoring. The introduction of straight penalties for those USPs not meeting the QoS
objectives and requirements might be suitable to guarantee the compliance with the
QoS regulation across the Community. A direct link between QoS failure and penalties
could possibly be appropriate as it would be a simple and sensible disciplinary
mechanism.
In this context price setting limitations might be an effective way to sanction those USPs
failing to meet the QoS objectives. In Portugal quality aspects play an important role in
the annual price review. Thus, the extent to which CTT is allowed to raise prices for
postal services dependents on the degree to which they achieve a weighted QoS
objective. This weighted QoS objective combines the performance with respect to
transit time, the rate of mail not delivered within specified periods as well as queuing
times at counters. Hence, if the USP fails to meet quality standards, prices could be
lower. In Italy financial penalties are also part of the price cap that is applied to the USP.
For each percentage point below the objective level a penalty is automatically imposed
on the USP. The REIMS agreement proved that limitations in price setting result in a
strong incentive to increase quality of service.
3.2.5 Publication of quality of service issues

The publication of QoS objectives and performances informs customers and regulators
about the services of the USPs and additionally provides an important incentive for the
USPs to ensure a high quality of postal services. If the USPs know that the information
on a bad quality of service will become public they have a strong incentive, in order to
protect their reputation as service provider, to avoid such a bad quality of service
performance. The Postal Directive uses this incentive and in Article 18.3 therefore
provides for the a requirement to publish quality levels.
92

Figure 3-52:
Issues of publications
Loss & damage
Delivery
2
4
6
Customer Satisfaction
surveys
Access to postal
network
Complaints and redress

issues
Transit time
13
15
On the international level the obligation to publish the performance is met for crossborder mail. IPC half-yearly distributes to the public the results of UNEX. However, on
national level these requirements with respect to domestic mail are not fulfilled in every
Member States (see Figure 3-52). In particular this is true for the publication of
complaints issues. Only ten USPs provide information on the number and the treatment
of complaints. Whereas in Belgium and France the ombudsman and in Germany the
NRA publish these results, there is no provision of this information at all in Greece and
Luxembourg.
3.3
National QoS framework and performance in the Accession Countries
3.3.1 Universal postal services and other services

In most of the Accession Countries the scope of universal postal services corresponds
to the requirements of the Postal Directive with regard to the weight thresholds. In Malta
the regulatory framework is being elaborated but has not been ratified by the Parliament
yet. Therefore the scope of universal postal services has not been defined so far. In
Table 3-11 the scope of universal services for the Accession Countries is summarised.
93
Final Report
Table 3-11:
Country
2.
3.
Domestic postal services

Letters
Parcels
CY
CZ
EE
Cross-border postal services

Letters
Parcels
20
20
15
10
20
HU
10
20 incoming
10 outgoing
LV
all
20
all
20
LT
10
10
10
10
MT
1.
Scope of universal service (in kg)
PL 3
10
20 incoming
10 outgoing
SK
10
20 incoming
10 outgoing
SL
20
20
CY
20
20
The Czech NRA does not provide a weight limit. The NRA only states that parcels as far as accepted by the
foreign postal operator are included.
In Malta the regulatory framework is still not in force. Therefore neither the scope of universal services nor the USP
are yet legally defined. The information is based on the draft postal law.
In Poland the information is based on the draft version of the postal law which is not in force yet. According to the
postal law of 1990 letters up to 2kg are included as well as parcels without stating any weight threshold.
In all Accession Countries but Latvia letters up to 2kg and parcels at least up to 10 kg
are covered by the postal universal service obligation. A remarkable result of the
comparison of service portfolios within the universal service area is that in the majority
of the countries the delivery of newspapers and magazines is excluded from the
universal services area. Nevertheless it is provided by the majority of USPs50. Figure
3-53 describes the scope of universal postal services in the AC.
50 With exception of the Czech, Slovak and Latvian USP.
94

Scope of domestic universal postal service51
Figure 3-53:
CZ
LT
PL
SK
EE
LV
CY
MT
SI
HU
1st class
Supplementary Source:
Parcels
2nd class
Newspapers/Magazines
Other publications
WIK-Consult, Survey on some main aspects of postal networks

in EU Adhesion Candidate Countries, 2003.
A common misunderstanding in the questionnaire was the statement of the USPs to

have direct mail products offered. However, a closer analysis showed that the so called
direct mail is handled within the same mail flow as first class or, if separately provided,
second class mail. Second class letter services are provided in Hungary, Poland and
Slovakia. According to the interviews carried out in the countries we assume that none
of the other countries provide second class services. In Poland the first class service
has only been introduced in July 2002.
Focusing on value-added postal services the majority of USPs offer services beyond
the universal service, such as express and courier services as well as distribution of
unaddressed items.52 The Cyprian USP only provides courier services and the delivery
of unaddressed items. In addition to the services above, the Polish USP and Malta Post
provide document exchange services.
51 Direct mail is not included in the figure. None of the countries provide a direct mail product with
different transit time objective than the first or the second class service. The USPs usually make
individual contracts with direct mailers. Therefore this mail is categorised as a type of bulk mail.
52 With exception of the Latvian and Cyprian USP.
Final Report
95
The use of track and trace systems can be used as an indicator for the technical
development of the USPs in the AC. Recently track and trace technology has been
introduced for registered (Malta, Slovakia) and express services (Hungary, Malta,
Poland, and Slovakia). The Czech USP implemented tracking and tracing technology
for parcel services. The USPs of Cyprus, Estonia, Malta, and Slovenia intend to
introduce track and trace systems for parcels and partly for registered and insured items
in the near future (see appendix AC).
3.3.2 Objectives, performance, and applied measurement methods

In the following chapter the particular QoS dimensions will be described in more detail.
Domestic transit time objectives and performance
Six Accession Countries have defined D+1 transit time objectives (possibly completed
by more objectives) within their regulatory framework. On the other hand, four
Accession Countries still have not yet transposed the Postal Directive requirements in
the national regulatory framework: Latvia, Malta, Poland and Slovenia. For these
countries within the study the voluntary objectives set by the USPs are used.
Table 3-12 summarises regulatory and voluntary transit time objectives for domestic
first class mail.
Estonia is the only country that applies regionally differentiated transit time objectives:
within urban areas the Estonian regulatory framework defines an objective of 90% of
the mail being delivered within D+1, while within rural areas 90% of the mail is to be
delivered in D+2. In Latvia and Slovenia D+1 objectives still do not exist. Nevertheless,
according to the statements of the Slovenian USP, nearly all letters are delivered the
next working day. Across the EU Accession Countries the percentage of mail that has
to be delivered D+1 varies from 70% (Cyprus) to 94% (Slovakia).
96

Table 3-12:
Country
Regulatory
objectives?
D+1
CY
Yes
70% 1
CZ
Yes
EE
Yes
HU
LV
2.
3.
4.
5.
6.
7.
Yes
Yes
MT 5
PL 6
SK
4
89%
D+2
90% (urban areas)

75%
D+3
90% (rural areas)
90%
100%
80%
90%
No
90%
95%
No
80%
Yes
94%
No
D+5
90%
No
LT
SI
1.
Regulatory and voluntary transit time objectives for domestic 1st

class mail (2002)
100%
100% 7
The objective is stated by the NRA. The operator and the regulator have not agreed on the objective. The internal
objective set by the Cyprian postal operator is D+1 50% and D+3 85%.
According to the USP's information 90% (objective 2003). In the period from 1999 to 2002 the objectives were
increased per one percent each year.
The objectives for 2003 are 80% D+1 and 95% D+3. From the beginning of 2004 the objectives will be 85% (D+1)
and 97% (D+3) according to the Decree 254/2001.
The transit time objectives stated for Latvia and Slovenia are based on their old postal law. Objectives similar to
those in the Member States are not set yet.
The objectives are set by Malta Post. They are therefore voluntary and non-binding due to missing regulatory
framework.
The objectives are set by the Polish USP. The NRA expects regulatory transit time objectives for priority and nonpriority mail in 2004.
As announced by the Slovenian regulator a D+3 transit time objective was fixed within the Rules of the General
Terms and Conditions for the provision of postal services. But a measurement method does not yet exist. The new
Postal Act does not specify transit time objectives and secondary legislation is still not finalised.
Cyprus, Hungary and Malta failed to meet the D+1 objectives in 2002. The main
reasons for this according to the respective USPs are problems with sorting processes
and logistical shortcomings. In the case of Cyprus the delivery network in rural areas is
based on so-called agents which are not employed by the postal operator, and the
operator is not able to effectively monitor these agents. Moreover, for the transportation
the public bus system which is based on long-term contracts is used. The sorting of mail
is done only during daytime. The result of these circumstances is a very low transit time
performance in Cyprus.
97
Final Report
Figure 3-54:
D+1 objectives and performance of domestic first class services in

the AC (in %)
SI*
LV*
49
CY
70
67
HU
75
84
MT
LT
80
CZ
90
89
89
PL
93
94
80
95
94
SK
EE
90
40
50
60
Objective
70
80
90
97
100
Performance
In those countries where the operator also provides 2nd class services regulatory
objectives were set for these services (Hungary and Slovakia) or are at least already
planned (Poland).
Table 3-13:
1.
Transit time objectives and performance for non-priority mail
Country
Transit time objective
HU 1
D+3 75%
D+5 90%
PL
Planned in 2004
SK
D+2 91,5%
Performance
93,1%
From the beginning of 2004 the objectives according to the decree 254/2001 will be in force: D+2
80%/ D+4 97% for parcels, and D+3 85% / D+5 97% for all other postal services (including direct
mail and non-priority mail services). In 2003 the objectives are D+2 75% / D+4 90% and D+3 80%/
D+5 95% respectively.
With respect to domestic parcel services half of the countries already implemented
transit time objectives. In most cases they are also already monitored. Information
about the measurement methods being applied has not been asked for. For the Czech
In Latvia and Slovenia D+1 objectives do not exist.
98

USP it is highly probable that the UPS uses the tracking and tracing information to
monitor the transit time of insured parcels. The other postal operators still do not apply
tracking and tracing technology for parcel services. However, Slovakia plans to
introduce tracking and tracing technology for parcels in 2004.
Table 3-14:
Regulatory transit time objectives and performance (as far as

measured and published) for domestic parcel services (2002)
Country
Transit time objective
Performance
D+2 99,5%
D+2 99,9%
HU
D+2 70%
D+4 80%
D+2 99,4%
D+4 100%
LV 2
D+5 100%
D+5 100%
LT 3
D+2 80%
D+3 90%
D+2 98.8%
D+3 100%
SK
D+2 93% (1st class)

D+3 93% (2nd class)
D+2 96,4%
D+3 93,5%
CZ
1.
2.
3.
Only for insured parcels, using tracking and tracing

The transit time objective is based on old Latvian postal law, it is not monitored by the NRA
According to the statement of the NRA the transit time is measured by the USP 5 times a year. The performance
has not been stated.
Cross-border transit time objectives and performance

With respect to cross-border postal services the majority of the AC still have not set any
transit time objectives (see Table 3-15).
Table 3-15:
Country 1
CY
Regulatory and voluntary transit time objectives for cross-border mail

services
Direct flight
connection:
D+3 75%
D+5 90%
CZ
Planned in 2004
HU
D+3 85%
D+5 97%
No direct flight
connection:
D+3 50%
D+5 85%
D+3 85%
D+5 97%
MT
1.
2.
3.
SK 3
Planned in 2005
SI
Planned in 2004
The other countries which are not listed neither have a regulatory nor a voluntary objective.
In effect since July 2003.
Currently the Slovakian USP is required to ensure that exit of the mail from the country will be done within the same
transit time as for delivery of domestic items (D+1).
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Final Report
In Cyprus and Hungary regulatory objectives are set (the Cyprian objectives are valid
since the second half of 2003). Moreover, the Maltese USP has already set the
voluntary objectives according to the Postal Directive. In further three Accession
Countries the introduction of regulatory cross-border transit time objectives are planned.
However, so far the NRAs and USPs obviously still focus on solving national problems
like improving the domestic transit time. However, the solution of these problems is
strongly related to the solution of the cross-border problems. Until now none of the
operators has joined the REIMS II agreement. Therefore, the incentives set within this
agreement are not effective in these countries.
The quality of service performance in the Accession Countries is not measured within
the UNEX system used by the USPs in the EU. However, seven out of the ten countries
participate in the UNEX Lite measurement which is a less cost intensive version of
UNEX.53 The UNEX Lite methodology only takes the postal relations between large
cities of the respective countries into account. The UNEX-Lite methodology involves
other limitations (e.g. only 20g, machine-written standard letters are used as test
letters). Due to this limited scope the results are not representative for the total mail
stream of the countries and not even for the included cities. It is rather highly probable
that the results overestimate the actual cross-border performance as the measurement
only takes account of high traffic relations. In Table 3-16 the number of measured
relations and the minimum/maximum-performance of the participating AC are
summarised.
Table 3-16:
2.
Cross-border incoming
Cross-border outgoing
Min
Max
Min
Max
Number of
Relations 1
CZ
72.4 (IT)
95.0 (SK)
72,1 (HU)
94.9 (SK)
10
EE
82.2 (DK)
92.2 (SF)
94.5 (SE)
95.8 (SF)
HU
63.1 (DE)
76.4 (SK)
34.3 (IT)
79.1 (CZ)
10
MT
57.7 (FR)
87.0 (UK)
47.1 (IT)
87.8 (UK)
PL 2
67.9 (HU)
86.6 (SE)
45.3 (IT)
95.2 (SE)
10
SI
74.7 (HU)
91.9 (SK)
34.0 (IT)
87.8 (SK)
SK
63.7 (HU)
94.9 (CZ)
52.5 (HU)
95.0 (CZ)
10
Country
1.
Transit time performance of single-piece cross-border mail. Results

from UNEX Lite (full year results, 2002)
Number of relations concerning origin and destination countries within the current and future
Community
The Polish USP stated that ES and NL are also measured (perhaps for the first time in 2003)
Source: IPC UNEX lite results FY 2002
53 Cyprus, Latvia, and Lithuania do not participate to the UNEX Lite system in 2002.
100

With respect to the compliance with cross-border transit time objectives the
performance strongly varies between the AC. It should be taken into account that most
of these countries are at the very beginning of the economic integration process. Thus,
the organisation of the international mail flows as well as the importance of intraCommunity mail flows for the countries differs strongly.54 Furthermore, the number of
direct transport devices is very low compared to the actual mail volumes per postal
relation. Most of these countries have to make use of foreign hubs (e.g. the Baltic
countries make use of Scandinavian hubs like Helsinki or Stockholm) and thus need
additional time.
USPs as well as NRAs were asked to provide information on the applied measurement
methods in order to assess the reliability of the applied measurement methods and their
relation to the CEN-standard EN 13850..
Table 3-17:
Independent monitoring implemented in 2002 (domestic priority mail)
Measurement
Countries
Independent monitoring
CZ, SK
Independent monitoring under preparation
CY, LV 1
EE, HU, LT, MT, PL, SI 2
Monitoring realised by USP

1.
2.
According to the interview results the Latvian NRA is preparing a monitoring method which would be realised by
the NRA itself. First results will be published earliest in summer 2003.
The Slovenian USP stated that transit time is internally monitored.
Until now, the transit time is monitored by an independent institution in the Czech and
the Slovak Republics whereas in Estonia, Hungary, Malta and Poland as well as in
Slovenia the transit time is monitored the USP itself.
Table 3-18:
Measurement method approved by NRA?
Measurement
Independent monitoring
Independent monitoring under
preparation
Monitoring realised by USP
1.
2.
3.
Method approved by NRA
Method not approved by NRA
CZ, SK
PL 1
CY 2
HU, MT
LV
3
EE, LT, SI
The Polish regulator did not make any statements about transit time. According to the Polish USP the method is
approved by the NRA. In the interview the NRA stated that he has recently started with a measurement of transit
time on its own.
Both the Cyprian NRA and USP answered that the measurement method is approved by the NRA. In fact, the
NRA has still not looked at the method because of time constraints.
According to the statements of the Maltese Post the method is approved by the regulator. This is somewhat strange
because the Maltese NRA is not in force yet.
54 See WIK-Consult, Survey on some main aspects of postal networks in EU Adhesion Candidate
Countries, 2003.
101
Final Report
The method applied by the Hungarian USP is already approved by the NRA (Table
3-18). In Poland according to the interview results it is highly probable that the
measurement method has not yet been approved by the NRA because of the still not
revised postal law.
In about half of the countries an independent institution on behalf of the NRA or the
USP is or will conduct the measurement. Usually the measurements are regularly
conducted. In three cases (EE, LV, SI) measurement is only carried out annually. The
Latvian, Maltese, and Polish USPs do not publish their transit time performance yet.
According to the Polish USP the NRA annually publishes the transit time results.
According to our findings derived from the interviews, it is our view that in Hungary, the
Czech Republic and the Slovak Republic the applied measurement methods seems to
be the most reliable. With exception of Latvia the applied measurement methods are
usually developed by the USP as far as domestic postal services are concerned.
3.3.2.2
Loss and damage of postal items
In none of the AC objectives like a maximum number of lost items have been set so far.
However, in every AC except for the Baltic countries the number of lost postal items is
measured. Currently the Hungarian and the Czech USPs are obliged to do so whereas
the Cyprian, Maltese, Polish, Slovakian and Slovenian USPs voluntarily measure the
loss of domestic postal items. The main focus in these countries is on registered and
insured items as well as on parcels.
Figure 3-55:
Measurement requirements of lost postal items within the AC
No measurement
LT, LV, EE
Regulatory
HU, CZ
Voluntary
CY, MT, PL, SK,
SI
According to the Hungarian NRA, the USP is required to carry out measurements on
lost items independently of the respective postal service. However, the Hungarian USP
actually only collects information on lost registered and insured items. The Lithuanian
NRA plans to introduce an obligation to measure lost and damaged items. The year of
this planned introduction has not been stated. The Lithuanian USP plans to measure
domestic and cross-border registered/insured items in 2005.
102

3.3.2.3
The following Figure 3-56 shows the density of outlets (number of outlets per 10.000
inhabitants).
Figure 3-56:
MT
Number of outlets and street letter boxes per 10.000 inhabitants
14,8
1,3
PL
13,0
2,1
15,2
LT
2,7
SI
2,8
SK
HU
3,2
CZ
3,3
EE
13,7
12,6
10,5
18,1
25,7
3,9
LV
23,6
4,1
6,0
CY
0
14,6
10
15
outlets per 10,000 inhabitants
20
25
30
street letter boxes per 10,000 inhabitants
Sources: UPU; WIK-Consult, Survey on some main aspects of postal networks in

EU Adhesion Candidate Countries, 2003
It is interesting to see that in the Accession Countries the number of outlets does not
vary much. An exception to this is Cyprus that has a very high number of outlets. In this
case it is worth noting that only 50 of the post offices are owned by the operator itself
whereas more than thousand are so-called agents owning small businesses. Besides
providing basic postal services these agents are also responsible for the delivery and
collection of mail in the respective village.
Table 3-19:
Additional requirements regarding post offices
Minimum opening hours

Minimum services
Queuing time
No requirements
Regulatory requirements
Voluntarily requirements
CY, CZ, HU, LV, SK, SI
MT, PL
CY, CZ, EE, HU, SK
MT, PL
CY, CZ, EE, HU, LV, SK

HU
LT, MT, PL
103
Final Report
Queuing time plays a role only in Hungary. In none of the other countries is this
requirement mentioned. Requirements with respect to minimum business hours or
minimum services as well as the access to information exist in a higher number of
countries. With regard to the question on the access to information the answers of the
NRAs and USPs have sometimes been contradictory.
3.3.2.4
Delivery of postal items
According to the data collected in the course of the AC-study55, mail is delivered 5 days
per week in six cases and 6 days per week in 4 cases on six days per week. In addition
to that, the Estonian USP conducts two daily deliveries in urban areas.
Table 3-20:
Country
Standard Delivery Days Per

Week
Less deliveries
in some areas
Two daily deliveries in

urban areas
CY 1
Yes, in some rural areas
No
CZ
No
No
Yes, on islands without

daily ferry.
Yes, in major cities.
No
No
No
No
EE
HU
LT
1.
2.
3.
4.
Delivery conditions
LV
No
No
MT
No
No
PL
No
No
SI 4
Yes, in remote alpine areas

representing approx. 0,6%
of all households
No
SK
No
No
In Cyprus mail is delivered six days in some major urban areas. In rural areas with villages below 200 inhabitants
the agents (not employed by the Cyprian postal operator) usually deliver the mail in mail boxes located on central
places.
In Estonia the USP states 6 days as standard, the NRA 5 in rural and 6 in urban areas.
Six day delivery in some parts of the country (major urban areas).
Different from the Slovenian NRA the Slovenian USP states 5 deliveries.
In Slovakia, the Czech Republic and Cyprus regulatory requirements with respect to
delivery exist. According to the Slovakian and the Czech NRAs postal items have to be
delivered at the latest at 4 pm. The delivery to isolated parts is ensured as long as the
residential unit has at least 50 inhabitants and is placed only one kilometre away from a
residential unit with regular delivery services. The Cyprian NRA states that the delivery
frequency varies between urban and rural areas without describing the difference.
55 See WIK-Consult, Survey on some main aspects of postal networks in EU Adhesion Candidate
Countries, 2003.
104

3.3.2.5
Figure 3-57 presents the scope of information provided by the USP.

Figure 3-57:
Information provided by the USP
Loss
CY
except HU, LT, LV,
MT
Transit time
Access to postal
network
except LT, LV, MT
ZIP Code
except LT
Complaints
except LV
Product information
all USP
10
With respect to transit time objectives and performances the Hungarian, Lithuanian,
Latvian and Maltese USPs do not provide any information. Product information is
offered in every AC whereas information about loss and damage according to the
statement of the NRA is only provided in Cyprus. With respect to transit time and
complaint procedures some of the USPs voluntarily provide information.
105
Final Report
Figure 3-58:
Current use of information channels
Public locations
CY, CZ, LV, SK, SI
Annual report
except LT, LV, MT
Homepage
except MT
Post offices
except MT
Printed info
all USP
10
Figure 3-58 gives an overview of the use of information channels. The majority of USPs
uses at least four media: printed information, post offices, the annual report and
surprisingly the internet. Only the Maltese USP does not publish information within the
post offices/agencies. It just makes use of printed information.
Half of the NRAs are of the opinion that the provided information is of good quality. The
Estonian USP provides a poor quality of information according to the Estonian NRA.56
Figure 3-59:
Quality of information in the view of the NRAs
Good:
CY, CZ, LT, SK
Poor: EE
Adequate:
HU, LV, SI
Note:
PL and MT did not answer the question.
56 In our view the Estonian NRA means the quality of information provided to the NRA (not to the
customers).
106
3.3.2.6

According to the Postal Directive the procedures for handling complaints have to be
transparent, non discriminatory, fast and simple. This general requirement of the
Directive has to be specified within the national law.
Figure 3-60:
Legally required points of contact
no requirement:
MT, PL
NRA, USP
CY, CZ, EE, LV,
LT, SK, SL
only USP: HU
Regulatory requirements with respect to complaints and redress procedures already

exist in three of the AC. All USPs are in charge of the handling of complaints. Moreover,
with the exception of Lithuania all USPs have defined a point of contact for the
customer. The Lithuanian USP intends to introduce such a point of contact in 2005.
Figure 3-61 shows whether a point of contact is legally required in a country. While in
most of the countries the NRA as well as the USP are responsible for the handling of
complaints in Malta and Poland neither the NRA nor the USP are under an obligation to
provide a point of contact for customer complaints. In Hungary only the USP is
responsible for the handling of complaints.
Figure 3-62:
Standardised handling of complaints
No
CY, LV, LT, SI
Yes
CZ, EE, HU, MT,
PL, SK
The majority of the USPs has already introduced a standardised complaint handling
procedure (Figure 3-62). The Slovenian operator plans to introduce a standardised
procedure as soon as the legislation is finalised.
107
Final Report
Figure 3-63:
Voluntary handling time objectives of the USP
30 days
HU, LT, PL, SK
Less 10 days
EE, MT, SI
No handling time
objective
CY, CZ, LV
Only in Estonia and Poland regulatory objectives with respect to the time needed to
handle a complaint are set. In Estonia the objective just concerns the handling time of
the NRA (2 months). In Poland according to the old Postal Law a maximum of 90 days
is allowed. As summarised in Figure 3-63 the voluntarily set handling times are much
lower than the regulatory requirements. These voluntary objectives vary form 7 to 30
days for domestic postal services. While the Estonian USP has set an objective of only
10 days the Polish USP implemented a 30 day objective. The Cyprian, Czech and the
Latvian USPs do not set any objectives with respect to handling time of complaints.
3.3.2.7
Customer Satisfaction
The majority of USPs makes use of customer satisfaction surveys (Figure 3-64). The
measurement is voluntary in these countries. Whereas the Latvian USP does not intend
to make use of customer satisfaction surveys in the near future, the Cyprian and the
Lithuanian USPs plan to do so.
108

Figure 3-64:
Use of customer satisfaction surveys in the AC
No
CY, LT, LV
3.3.2.8
Yes
CZ, EE, HU, MT,
PL, SK, SI
Legislative procedures of QoS objectives and requirements
Figure 3-65 shows the involvement of interest groups in the legislative procedure to set
QoS objectives. Malta is not considered in this evaluation. The Maltese USP answered
that it sets the QoS objectives and requirements autonomously due to a lack of
regulatory framework.
Figure 3-65:
Involvement of interest groups in the objective setting procedure
Customer Groups
CY, HU, SI
Competitors
CY, HU, SI
NRA
except EE
USP
all
10
109
Final Report
All the USPs as well as almost all NRAs are involved in the legislative procedure to set
QoS objectives. The only NRA not involved is the Estonian NRA. In Estonia this task is
left to the Ministry. In Slovenia, Hungary and Cyprus customers and consumer groups
are involved. In addition to that in Poland the trade unions are integrated into the
process especially with respect to questions concerning the access to the postal
network (post offices).
Table 3-21:
Responsibility for setting regulatory QoS objectives (NRA-answer)
Country
Responsible organisation
Organisations involved
CY
NRA
all groups
CZ
Ministry, NRA
NRA, USP
EE
Legislation, Ministry
USP, Ministry
HU
Ministry
all groups
LV
NRA
NRA, USP
LT
NRA
USP, NRA
MT
n/a
n/a
PL
Ministry
USP, NRA
SK
NRA
USP, NRA
SI
Legislation, Ministry, NRA
all groups
Table 3-21 shows which of the involved organisations is responsible to set QoS
objectives. The table is based on the information provided by the NRAs.
3.3.2.9
QoS objectives outside the scope of universal postal service
Most of the postal operators in the Accession Countries also provide value added
services and the delivery of unaddressed mail. With regard to these services QoS
objectives are internally implemented. In some cases the postal operators provided
information on the scope of these voluntary objectives. The stated objectives mainly
concern the transit time of courier or express services.
3.3.3 Consequences of failure

In most of the AC, as described in Figure 3-66, the failure to meet the objectives and
requirements with respect to universal postal service results in a penalty (fines) for the
USPs. Thus, it is more interesting to see which country still has not implemented such
penalties. However, the statements of the USPs and NRAs are somewhat contradictory.
Particularly in Slovenia the situation is not transparent.
110

Figure 3-67:
Existence of penalties in case of failure to meet QoS objectives and

requirements
CY, CZ,
EE,HU,SK,SI
CY, CZ, HU,
MT,SK
Yes
LT, LV
No
LT, PL, SI
MT, PL
n/a
EE, LT
NRA
USP
The result makes clear that there is a high degree of uncertainty what penalties in which
cases are applied (see Figure 3-68).
Figure 3-68:
Penalties with regard to the different quality dimensions
Customer satisfaction
HU, SK
CY, HU, SK
CY, HU, MT, SK, SI
CZ, HU, SK, SI
Complaints
CZ, MT, SI
CY, CZ, EE, SK
Loss and damage

Access: post offices
CY, HU, SK, SI

CZ, EE, HU, SK, SI
CY, HU, SK, SI

CY, CZ, HU, SK, SI
Delivery issues
CY, HU, SK, SI

CY, CZ, EE,HU, SK,
Access: letter boxes
CZ, HU, SK, SI

CY, CZ, EE,HU, SK,
3
NRA
5
USP
Final Report
111
3.3.4 Publication
The requirement to publish QoS objectives and the related QoS performance is an
important incentive instrument to guarantee universal service provision at a specified
quality level. In the majority of the AC the USPs are still not committed to publish QoS
objectives, requirements and the related performance. Table 3-22 gives an overview of
the situation.
Table 3-23:
Legal commitment to publish
USP committed to publish QoS issues
CY, CZ, HU, LT
USP not committed to publish QoS issues
EE, LV, MT, PL, SI, SK
Despite the legal obligation to publish QoS issues, the Hungarian USP it does not
publish any of these issues. The situation is similar in Cyprus and Lithuania. On the
other hand the Estonian and the Slovakian USPs publish some issues without being
obliged to do so. Table 3-24 shows in which countries QoS issues are published.
Table 3-24:
Actual publication of QoS issues by USPs
Publication of QoS issues by USP
CZ, EE, SK
No publication of QoS issues
CY, HU, LT, LV, MT, PL, SI
Note:
In case of Cyprus the NRA at least publishes the results of transit time measurement.
The common publication media of the USPs is the annual report. Information about
domestic transit time performance and about access conditions to the postal network
(e.g. number of street letter boxes, number of post offices) is provided in most of the
countries. The other QoS dimensions particularly information about complaints, crossborder transit time performance and loss play a minor role.
3.3.5 Status of QSF concerning the Accession Countries

As it is shown in Figure 3-69 about 10 % of the available funding for QoS projects are
used by a couple of Accession Countries. The same amount is expected to be received
in the next 3 years. As mentioned in 3.1.3 the use of this Fund is linked with the country
classification as an industrial or developing country. Against the background of the
expected future classification of these countries they ought to try to install additional
projects which can be partly financed by the Quality of Service Fund.
112
Figure 3-69:

Use of QoS fund by the Accession Countries (in thousand $, status

March 2003)57
586
5.925
4.732
Amounts already committed to approved projects

Amounts available for new projects
Amounts to be received between now and 2005 (estimated)
57 Presentation of Jean-Philippe Ducasse about QSF, issues and challenges for Accession Countries.
Held in Brussels 12.-13.3.2003.
113
Final Report
3.4
Summary: status quo and resulting opportunities
This section draws a kind of family picture summarising the QoS objectives,
performance figures and measurement issues in the Member States and Accession
Countries. Based on a comparison, shortcomings and failures are identified in order to
derive a list of potential opportunities for the future QoS regulation. The catalogue will
be the starting point for the subsequent analysis in chapter 4 which leads to the
identification of the "feasible" opportunities. Figure 3-70 gives an overview of the
structure of the comparative approach that is used as a basis for deriving the potential
opportunities.
Incentives
Delivery conditions
Performance
Complaint handling
Scope and depth

of QoS regulation
Loss
Legal transposition
Postal Directive
Deriving potential opportunities
Cross border transit time
Figure 3-70:
List of potential opportunities
3.4.1 Legal transposition of the Postal Directive

In a first step the status of legal transposition of the Postal Directive in the Member
States and the Accession Countries is examined. Are the minimum requirements laid
down in the Postal Directive implemented in the national QoS regulations? In case that
the Postal Directive is not properly transposed yet, the remaining issues and the
problems to be solved are highlighted.
As a starting point, Table 3-25 gives a first comprehensive overview. It encompasses a
brief assessment of the level of heterogeneity and states identified problems.
Different types of penalties and sanctions established

Requirements are not fulfilled in every MS
Reliable service
Customer-oriented access
to postal network
Every working day across

the whole area
Provision of detailed and

updated information
Transparent, simple and

inexpensive procedures
No minimum requirements
for surveys
Corrective action by the

NRAs when necessary
Publication of objectives
and performance
Loss and damage
Access to universal
service
Delivery of postal
items
Access to
information
Complaints and
redress
Customer
satisfaction
Consequences of
QoS failure
Publication
Limited opportunity to set Community objectives

Wide variations in definition of loss and substantial delay
Limited opportunity to set density criteria, queuing time
objectives et al. on Community level
No objectives for loss of mail in 13 MS and all AC

Requirement for measuring loss only in 3 MS and 2 AC
Requirements implemented by all MS
Surveys in all MS but EL and LU
High heterogeneity with respect to the handling of complaints
Double instances in almost all MS (in different form) and most AC
Transposed in all MS
Transposed in all MS and AC
Information published varies widely
Most penalties (e.g. fines) are not recognized as threat
Use of different methodologies and indices
Results of the surveys are mostly not published
Standardised methodology not obligatory so far
Comprehensive provision not required in every AC yet
Latest time of delivery possibly varies within MS (and AC)
Limited opportunity to set Community objectives
High heterogeneity (both in terms of services covered and levels)
Regulatory obligations are very heterogeneous across the MS
Limited scope of universal service covered by objectives
30% to 50% of the universal service subject to QoS objectives
LV, MT, PL, SI to transpose; situation unclear in CY, CZ
Transposition completed just in some ACs (D+1 as reference)
QoS objectives for entire

universal service
No reliability objective (e.g. D+3) in DK, NL, PT, SF
Few MS have only implemented a D+1 (speed) objective
Domestic transit
time objectives for
other services
LT, LV, PL and EE to define and transpose

AT to set objectives as planned; no D+1 objective in ES
Most MS have set objectives, mainly D+1 objectives
Compatible with crossborder objectives
CZ, SI and SK to transpose as planned
High degree of harmonisation as almost all MS adopted the Postal

Directive minimum requirements as national objectives
Domestic transit
time objectives
1st class mail
EL objectives not in conformity
Problems
In most MS & 3 ACs transposed (+ planned in 3 ACs)
Transposition and harmonisation
85% D+3 (speed)

97% D+5 (reliability)
Minimum Postal
Directive requirements
Transposition of the Postal Directive

Cross-border transit
time objectives
QoS aspect
Table 3-25:
114
Final Report
115
The cross-border transit time objectives (85% D+3, 97% D+5) have been transposed in
almost all MS. Thus, the degree of harmonisation is high. Only in Greece the current
objectives do not comply with the Postal Directive. However, the Greek objectives have
been continuously upgraded over the last years. Full compliance with the Postal
Directive can be expected within the near future.
The Accession Countries seem to need some time until they are able to comply with the
Postal Directive. Regulatory cross-border transit time objectives according to the
Directive are hardly set in any Accession Country so far.
Domestic transit time 1st class mail
As suggested by the Postal Directive all Member States but Austria have implemented
domestic transit time objectives for 1stclass mail. In nearly all MS the USPs have to fulfil
regulatory D+1 objectives. In Austria this objective will become effective in 2004. The
only remaining exception is Spain. Here only a D+3 objective is in force as D+1 services
are not provided. Concerning the reliability of 1st class letter mail four MS have not set a
supplementary objective.
Objectives for 1st class letters have only been set in a few AC so far. In most AC they
still have to come into effect in order to ensure compliance with the Postal Directive.
Transit time of other domestic services
In contrast to 1st class letters a consistent pattern for the transit time regulation of
domestic parcels, 2nd class mail and other services could not be identified. The
regulatory frameworks in this respect are very heterogeneous across the MS.
Loss and damage
Besides transit time objectives the number of lost postal items provides information
about the reliability of postal services. Even if it is suggested by the Postal Directive
requirements concerning loss and delay are set only in a minority of the MS and AC.
Moreover, the definitions when mail items are considered as lost essentially vary.
Access and delivery conditions
The conditions for access and delivery in the Member States are generally sufficient to
meet the Postal Directives requirements. Moreover, national regulations ensure that
information on products, prices, legal provisions and quality aspects is satisfactorily
provided. Although with respect to these issues the national regulatory frameworks are
116

very heterogeneous, the Postal Directive can consequently be considered to be

transposed in the MS as well as in the AC58.
Complaints handling
Customers often do not understand the complaint handling procedures. Particularly

private consumers do not have the possibility to change their provider in case of poor
performance. In order to express their dissatisfaction and problems they use complaints
as voice strategy. Therefore, simple and transparent procedures for the handling of
complaints are seen as a very important instrument for postal customers, especially for
the smaller ones.
Consequently, the Postal Directive requires such transparent and simple procedures for
dealing with customers complaints. However, in practice the treatment of complaints
varies from country to country. The Postal Directive requirement for a double instance
process is not met in Sweden and a few AC. Regulatory objectives on complaint
handling (e.g. maximum handling time) are even not set in many MS and AC.
Though not required by the Postal Directive, the USPs of almost all MS and even of the
majority of the AC regularly conduct customer satisfaction surveys. The outcome of the
investigations is in general only for internal use of the USPs. If results are published,
this is done in an aggregated manner e.g. by using a customer satisfaction index.
Incentive structure
Incentives are the main driver of economic interactions. Institutional arrangements can
stimulate the postal operators to meet the customers expectations and to adjust the
quality of their services to markets needs. In this context the possible imposition of
penalties and the obligation to publish QoS objectives and performances are important
incentives to attain a specified service quality. According to the Directive the NRAs are
responsible to take corrective action where necessary. Furthermore, QoS objectives
and performance results shall be made public. In reality, these requirements are not
fully transposed in the MS and in particular in the AC.
Conclusions
1. The transposition of the minimum requirements of the Postal Directive can be

considered as almost completed in the present MS.
58 As far as the regulatory framework is revised in the AC.
Final Report
117
2. However, there are some compliance issues in some MS where action still is
needed. All ACs do not comply with the Postal Directive yet.
3. The transposition and application of provisions of the Postal Directive is
characterised by high heterogeneity.
The heterogeneity might create a risk for regulatory asymmetry. Therefore, a closer look
at the scope and depth of the regulations is required.
3.4.2 Scope and depth of QoS regulation

In the following the scope and depth of QoS regulation within the present Member
States and the Accession Countries will be appraised. The review of the legal
transposition of the Postal Directive revealed a very heterogeneous implementation of
the provisions into national law of the MS. This section stresses the subject whether
regulation (i.e. objectives, measurement requirements, other regulatory requirements)
covers a wide range of QoS aspects or is more focused on some specific features. The
main discrepancies will be reviewed in order to
-
understand the main principles of the national regulatory QoS frameworks,
identify best practice59,
identify potential opportunities for improving QoS regulation, in particular in terms of

homogeneity.
3.4.2.1 Importance of QoS and corresponding regulation in customers view

Regulatory interventions in postal markets aim at mitigating possible market failures in
favour of the postal customers. Therefore, it has to be ensured that the focus of
regulation aligns with the customers view of important QoS issues. Before going into
details of the regulatory frameworks, the view of customers organisations on QoS
objectives and requirements is reviewed. In Figure 3-71 the degree of importance of
particular QoS dimensions in the MS and in the AC stated by these organisations is
pointed out.60
59 Poorly designed or ineffectively implemented regulation can have a significant impact on the efficiency
and competitiveness of an industry or sector. Best practice aims to ensure that the regulatory regime
accomplish the stated objectives as quickly and inexpensively as possible. In identifying effective and
less burdensome ways of achieving regulatory goals the adoption of better regulatory practices
contributes to increased confidence in regulation.
60 As already discussed in the methodology of the study, the reflected opinions are only rough
indications about consumers/customers view.
118

Figure 3-71:
Important aspects of postal services in customers view
100%
80%
60%
40%
20%
Member States
TT CB
Letter boxes
Post offices
Access to
information
Contractual
terms
Information
in general
Delivery
conditions
TT dom
Complaints
Customer
service
Quality in
general
Loss
Price
0%
Accession Countires
In general, quality is considered as a highly important issue. According to the

respondents the most relevant subjects in the Member States are prices, domestic
transit times, loss and delay, customer service and the handling of complaints.
In the AC the reported customers view is similar. Here domestic transit time, loss and
delay and the treatment of complaints are also considered to be essential. In addition to
that, delivery conditions, the access to information as well as the quality of information
are regarded to be very important.
In present Member States as well as in the Accession Countries cross-border transit
time only plays a minor role from the viewpoint of the respondent associations.
Interviews with customers and consumers representatives suggest that business
customers generally have a high priority for short transit times. Transit time is regarded
by private consumers to be an important issue as well. But private consumers
additionally appreciate the reliability of a service to an increasing extent. Compared to
business users, they increasingly tend to prefer certainty, on what is going to happen
with their mail (especially in case of cross-border mail).
119
Final Report
3.4.2.2 Focus of QoS regulation in the Member States and Accession Countries
The scope of QoS regulation varies across the Member States. In all of them regulatory
requirements exist with respect to the conditions of access and delivery as well as to
the access to information. However, these requirements (e.g. density criteria, latest
delivery) considerably differ between the countries.
Only in a minority of the MS the regulatory objectives cover a wide range of QoS
aspects (see Figure 3-72). QoS regulations with regard to transit times are the most
common. Moreover, in six MS objectives for the treatment of complaints (maximum
handling times) have been implemented. Maximum waiting times and objectives with
regard to loss and damage play a minor role in national QoS regulation. In none of the
MS requirements or objectives are set for services beyond the universal service.
Figure 3-72:
Regulatory QoS objectives in postal markets
AT
DE
DK
EL
IE
NL
SF
UK
ES
FR
IT
LU
SE
BE
PT
Transit time
Complaints
Queuing time
Loss & damage
Compared to the current MS the scope of QoS regulation in most AC looks very much
alike (see Table 3-26). In these countries regulatory objectives and requirements are
implemented with respect to transit time, the access to the postal network, delivery, and
the access to information. The lack of some of these objectives and requirements in
several countries might be due to outstanding revisions of national law so far, e.g. in
Malta and Poland. With respect to the treatment of loss, the handling of complaints as
well as customer satisfaction surveys, the scope of the QoS regulation varies.
120

Table 3-26:
Regulatory objectives and requirements in the Accession Countries
Country
Transit time
Loss &
damage
Access
Delivery
Access to
information
Complaint
issues
Customer
satisfaction
CY 1
CZ
EE
HU
LV
LT
MT
PL
SK
SI
1.
2.
3.
4.
According to secondary legislation, becoming effective presently.

Secondary Legislation not finalised so far.
Regulatory framework has not been laid down yet.
Based on the Act on Posts and Telecommunications 1990; revision is in process.
3.4.2.3 Transit time regulation

Table 3-27 illustrates that the scope of universal service covered by regulatory
objectives is limited. There are significant variations in scope and depth of transit time
regulation between the Member States. Besides 1st class mail the main focus lays on
2nd class mail and parcels. However, voluntary objectives are quite common.
Table 3-27:
Focus of transit time objectives within the universal service in the

Member States (coverage in % of USPs providing the service)
Services 1
No objectives
Cross-border 1st class (15)
100%
0%
0%
Domestic 1st class (15)
100%
0%
0%
Domestic 2nd class (10)
50%
30%
20%
Domestic Parcels (15)
53%
13%
33%
Direct mail (11)
18%
36%
45%
Newspapers, magazines (13)
31%
8%
62%
Other publications (9)
11%
0%
89%
1. Number of USPs providing the corresponding service in brackets.
Final Report
121
Hence, the proportion of the postal universal services being subject to regulatory
objectives and requirements differs from country to country. However, in terms of mail
volume this proportion could not even approximately be specified due to lack of
appropriate data. Merely some general statements about the coverage are possible. In
countries like Portugal, France, Italy and UK all types of postal services are covered by
transit time objectives (nearly 100%). In countries like Sweden, Belgium, and Greece
where the transit time of the second class and direct mail services is not regulated
between a quarter and half of the letter mail volume is subject to transit time objectives.
This is also valid for USPs which do not offer particular second class services (e.g.
Germany).
Apart from Greece the cross-border objectives laid down in the present Member States
do comply with the Postal Directive: 85% D+3 and 97% D+5 of the fastest standard
category. The objectives refer to the entirety of intra-Community cross-border mail
traffic. Additionally, the Directive requires that the cross-border transit time objectives
shall be met for each bilateral country-to-country relation. The feasibility of the latter
requirement is not guaranteed within the current as well as in the enlarged Community
due to multitude and heterogeneity of bilateral mail flows that have to be taken into
account.
Potential opportunity:
Relaxing the share of country-to-country flows which have to achieve the objectives
Economic feasibility of the current cross-border transit time objectives
Instead of 210, 600 mail flows have to be monitored in the enlarged Community.
Therefore, it could be taken into consideration to reduce the share of the monitored
bilateral flows that have to meet the objectives, for example 90 percent of the countryto-country relations to a Member State have to reach the objectives.
Measurement costs
The multitude of countryto-country relations partly characterised by very low mail

volumes have to be monitored. Depending on the required statistical accuracy the
measurement costs per mail flow could be rather high. Against this background the
requirements with regard to the measurement method could be eased.
122

Only in a minority of the Accession Countries cross-border transit time objectives are
set in compliance with the Postal Directive. So far, it does not seem realistic to assume
that most of the AC were able to quickly adopt the requirements of the Postal Directive.
Furthermore, the group of the AC is not homogeneous.
Identification of a transition period for the Accession Countries

Based on the previous comparison it seems that the regulatory frameworks in the
Accesion Countries do not comply with the objectives set by the Postal Directive. They
should be integrated step by step within a specified transition phase. Against this
background appropriate transition periods for the Accession Countries may be
identified.
In order to have a closer look on the scope and depth of domestic transit time regulation
in the MS, Table 3-28 summarises the main issues (e.g. objectives, measurement) with
respect to this quality dimension.
As required by the Postal Directive, domestic transit time objectives for 1st class letters
are set or will soon come into effect in every Member State and Accession Country.
Almost all MS have set D+1 objectives for their fastest standard category. Eight
Member States have an objective above 90 percent. In Spain the fastest standard
category is a D+3 service, in Austria the objective will be in force not before 2004. The
objective levels in the Member States range from 80% in Germany to 97% in Denmark.
In four Accession Countries comparatively high objectives with respect to domestic 1st
class transit time have been set.
EN 13850
Voluntary
measurement
CEN Standard
EN 14534
EN 13850
15
5 (D+2)
3 (D+3)
1 (D+4)
1 (D+5)
10
13 (D+1)
1 (D+3)
14
15
single-piece
EN 14534
2 (D+2)
2 (D+3)
1 (D+4)
1 (D+5)
EN 14508
1 (D+5)
1 (D+6)
EN 14534
3
EN 14534
Under
development
2
(D+1)
1 (D+5)
1 (D+10)
2 (D+3)
1 (D+5)
1 (D+5)
1 (D+6)
8
2 (D+1)
2 (D+2)
3 (D+3)
1 (D+5)
5
4 (D+3)
1 (D+4)
10
4 (D+3)
1 (D+4)
13
11
9 (D+1)
1 (D+3)
123
Newspapers,
magazines
*
15
Direct mail
10
bulk
Parcels
single-piece
Domestic 2nd class
15
bulk
Domestic 1st class
* In Finland the delivery of newspapers and magazines is outside the universal service.
15
15
(D+5)
15
(D+5)
(D+3)
15
15
(D+3)
15
bulk
15
single-piece
Cross-border 1st class
Scope and depth of transit time regulation within the universal service in the Member States
Regulatory
measurement
Voluntary
objective
Regulatory
objective
(reliability)
Regulatory
objective
(speed)
MS where
service offered
Table 3-28:
Final Report
124

Ten Member States have set additional objectives with a longer transit time (e.g. D+3)
that aims at the reliability of 1st class service and corresponds to the D+5 cross-border
transit time objective.
Implementation of an additional objective for 1st class mail with a longer transit time
In order to ensure compatibility with the cross-border D+5 objective (or D+4 in case of
upgrading) it could be necessary to set a supplementary objective besides the D+1
objective (e.g. D+2 or D+3) in the Member States. These additional objectives would
aim at ensuring the reliability of 1st class letter service and address the tail (abnomally
long delays) of delivery.
The methodologies for the measurement of domestic transit time also differ. In five MS
the measurement includes single-piece and bulk mail whereas in ten MS only singlepiece items are included. In four MS out of the ten the transit time objective and the
measurement method have the same basis. This means that the transit time objective is
only valid for single-piece items and thus corresponds to the measurement method. In
the other six countries the basis of the measurement does not comply with the definition
of the national transit time objective. Thus, in the majority of the MS the transit time
performance for bulk mail is not measured in spite of the requirement.
Enforcing bulk mail standard

A European standard for measuring transit time of bulk mail (EN 14534) has just been
adopted by CEN. That makes it possible for the Member States to measure the transit
time of both single-piece and bulk items. Thus, the measurement would cover the whole
scope of the objectives.
Against this background the concerned Member States could consider to expand their
transit time objectives in order that they cover also bulk mail in addition to single-piece
mail.
Since the Directive does not specify that the cross-border objectives set in the annex
only apply to single piece mail, the measurement of cross-border transit times by IPC
should also include bulk mail items appropriately measured by EN 14534.
Final Report
125
Furthermore, the coverage of important characteristics (e.g. type of induction, weight

classes) varies between the countries. Independence of measurement is not
guaranteed in the majority of the AC. It follows that the comparability of performance
results is very restricted in particular between the MS and the AC. Moreover, in the AC
the performance results do not appear reliable in several cases.
In half of the Member States and Accession Countries regulatory transit time objectives
for domestic parcels have been implemented. The definitions vary significantly from
D+1 up to D+5 objectives.
Transit time objectives for parcel services

In half of the MS and AC transit time regulatory objectives for parcel services are
already set. Against this background the setting of (harmonised) transit time objectives
in all MS could be an opportunity. An advanced option would be to limit such objectives
to the main parcel services used by consumers. However, it should be kept in mind that
a common measurement method is not yet available for this purpose (currently under
development within CEN/TC331).
Second class letter services are not provided in every MS/AC. In two out of three
Accession Countries and five out of ten Member States regulatory objectives have been
implemented for 2nd class letters. 2nd class letter objectives are usually set in countries
where consumers and small business customers can also make use of 2nd class
services.
Only in a minority of Member States QoS objectives for direct mail, newspapers and
publications as well as other publications exist.
Transit time objectives for other postal services

In most of the MS where 2nd class postal services are offered regulatory transit time
regulatory objectives are set. Besides, national transit time objectives for direct mail
services, newspapers and other publications could be taken into consideration as far as
the concerned services are provided.
126

3.4.2.4 Requirements and objectives for other important QoS issues

Apart from transit time, maximum handling times of complaints are a second key issue
of national QoS regulation. Half of the Member States have set corresponding
objectives. In contrast to complaint handling loss and damage of postal items is a more
critical field of national QoS regulation. Only in three Member States the USP is
required to measure this QoS dimension. Although generally not required the most
USPs in the Member States conduct customer satisfaction surveys. Regulatory queuing
time objectives are in effect in two Member States.
Table 3-29:
Scope and depth of regulation of further important QoS aspects in

the Member States
Loss and
damage
Handling of
complaints
Customer
satisfaction surveys
Access conditions
(Queuing time)
Regulatory
objectives
Voluntary
objectives
Requirement
to measure
Voluntary
measurement
12
Publication
13
CEN Standard
EN 14137
TS
EN 14012
Under development
With respect to the treatment of loss, the handling of complaints as well as customer
satisfaction surveys, the scope of the QoS regulation varies in the Accession Countries.
Loss and delay of mail
Although it is supposed to be an important issue, only Portugal has implemented a

dedicated objective with respect to delayed postal items. A requirement to measure loss
and delay only exists in three Member States and two Accession Countries. But even if
regulated, a valid measurement seems to be very difficult to define. Therefore, some
USPs voluntarily measure loss and delay by applying the transit time measurement.
Final Report
127
Requirement to measure the number of lost items

This issue is very important in the view of postal customers. Therefore a requirement to
measure lost and delayed items could be considered as opportunity. A first European
standard for measuring loss of registered mail (EN 14137) is available. There may be
the opportunity to enforce its implementation in the Member States. A measurement
method for loss and substantial delay of non-registered mail is currently under
development within CEN/TC331
In five Member States regulatory or voluntary objectives are in place with regard to the
average waiting time in order to improve customers access to post offices.
Requirements about the density of post offices and street letter boxes in the different
MS are described in a former EU-study.61 The corresponding aspects of the AC are
treated in the current EU-study about the AC.62
Complaints handling
All USPs of the Member States and most of the Accession Countries have implemented
a standardised handling of complaints. Maximum handling times are defined in many
cases. They strongly differ between the countries. An initial acknowledgement reply is
given in ten Member States, partly based on regulatory requirements, partly voluntarily.
Harmonised complaint handling

Complaint issues are very important in the view of postal customers. The current
situation is characterised by a large variety of different complaint handling procedures.
Consequently, a harmonised handling of complaints could support the development of
transparent and simple procedures across the Community. The implementation of the
available European standard for measuring complaints and redress procedures (EN
14012) could be enforced in the Member States.
61 CTcon (2001) Study on the conditions governing access to universal postal services and networks
62 WIK-Consult (2003) Survey on some main aspects of postal networks in EU Adhesion Countries.
128

Customer satisfaction surveys are widely used by the USPs even if the Postal Directive
has set no minimum requirements with regard to customer satisfaction surveys.
However, the outcome of these surveys are rarely published.
Measurement of customer satisfaction on national level (as requirement or

recommended as best practice)
This could ensure that corresponding surveys are conducted in every MS. The
publication of the results would give an insight in customers satisfaction with provided
QoS.
Incentive structure and implementation procedure
In case QoS objectives are failed to be met the regulatory sanctions are highly nontransparent. In most countries fines do exist in case the USP violates the universal
service obligations. These fines are often insufficiently specified. Legal proceedings
need time.
Implementation of simple disciplinary mechanisms (direct link between QoS failure and
penalty)
Linking the QoS performance to price regulation could be an opportunity to ensure
effective control of the QoS requirements and objectives. As experiences with the
REIMS II agreement suggest, a link between the actual level of transit time performance
and the price setting possibilities would probably bring the USP to meet the
requirements.
Final Report
129
Besides legal sanctions the publication of objectives and performances can also be an
effective way to set incentives. The scope and quantity of published information strongly
vary between the Member States. Even if corresponding issues are published, the
media of publication differ from country to country. All this makes it very difficult to
receive a general impression of the provided QoS in the countries.
Enforcing publication requirements

The Member States should ensure the consistent publication of objectives,
requirements and performance information. In practice, the information published varies
widely. In order to harmonise the conditions in the Community corresponding
measurement standards could determine the detailed publication requirements and
used media.
Involvement of customers/consumers groups
In half of the Member States and a minority of the Accession Countries customers
concerns are taken account of in the process of elaborating regulatory objectives. In
these countries the responsible institutions (Parliament, Ministry, NRA) take comments
and proposals from customers into consideration. However, the degree of involvement
differs between the Member States and the Accession Countries. In general it appears
that customer groups are not sufficiently involved in the process of QoS regulation.
Ensuring the involvement of the relevant stakeholders in the setting procedure of

regulatory QoS requirements and objectives
With respect to legislation and setting of regulatory requirements, the Member States
should consider simple and transparent procedures to involve postal customers in the
decision making process. Thereby it could be ensured that regulation corresponds to
postal users needs.
130

3.4.2.5 Conclusions
1. QoS regulation is exclusively focused on the universal service. In this context the
scope of QoS regulation mainly concerns transit time (particularly of 1st class mail),
access and delivery conditions and to a less degree the handling of complaints.
2. The extent of universal services covered by objectives and measurement
considerably varies between the Member States.Areas of discrepancies are mainly
the transit time regulation of other services than 1st class items, the requirements
with respect to the access to the postal network, the handling of complaints, and the
involvement of customers in the process of elaborating regulatory objectives.
3. In some areas measurement or even objectives widely rely on voluntary objectives
by the USPs. This concerns the transit time of other services than 1st class items,
the handling of complaints and especially customer satisfaction surveys.
4. Standardised measurement methods have been adopted for numerous QoS
dimensions. EN 13850 is already put into effect by the Postal Directive Committee
for the measurement of single-piece 1st class mail in all Member States as of 2004.
The implementation of the other available standards might also be enforced in order
to ensure reliable and largely comparable measurement results.
3.4.3 QoS performance

After reviewing the scope and depth of QoS regulation, this subsection deals with an
assessment of the actual QoS performance. Does the performance comply with the
agreed Community and national objectives? The key question is, whether the situation
is satisfying or not, particularly in terms of convergence. The assessment of potential
shortcomings will take account of the customers' requirements and expectations. It
comprises the situation in the Accession Countries as well.
Transit time performance
Before getting more differentiated Table 3-30 gives an overview of the transit time
performance in the MS and AC. It briefly summarises the current situation, problems
and possible consequences.
131
Final Report
Table 3-30:
Transit time performance in the present MS and the AC

Realisation of the objectives
Considerable
underperformance
Actions to be
taken
Mostly failing +
measurement
problem
EL, ES
Probably all AC
Improvements in
EL, ES and all AC
Partly satisfying
but measurement
problem
BE, DK, EL, FR

in AC ambiguous
Improvements in
BE, EL, FR,
most AC
MS
AC
Cross-border
transit time
Mostly satisfactory
Domestic transit
time
Mostly satisfactory
Cross-border transit time performance
In general the cross-border transit time performance in the Member States is to be

regarded as quite good. On the other hand the performance in the Accession Countries
seems by far not to be as good as in the MS. Notwithstanding these differences, both
the customer organisations of the Member States and even more those of the
Accession Countries appear to be relatively satisfied with the current cross-border
transit time performance. Figure 3-73 illustrates the satisfaction of customers
representatives with different aspects of postal services, e.g. cross-border transit time.
Figure 3-73:
Customers satisfaction with different aspects of postal services
70%
60%
50%
40%
30%
20%
10%
Member States
Accession Countries
Loss
Price
Complaints
Contractual
terms
Access to
information
TT CB
Delivery
conditions
Post offices
Letter boxes
TT dom
Quality in
general
Customer
service
Information
in general
0%
132

The overall performance exceeds on average the Postal Directives objectives in many
countries. Apart from Greece and probably Spain in 2002 all MS have met the overall
D+3 objective, most of them with a performance level of over 90% D+3 and 98% D+5.
Amendment of the current cross-border transit time objectives with respect to the
entirety of cross-border mail traffic
In order to set incentives for further improvements a corresponding amendment of the
D+3 and D+5 objectives could be taken into consideration. A variety of alternatives is
conceivable: an adjustment (e.g. 90% D+3, 98% D+5), a revision or upgrading (e.g.
D+2 and D+4) or a combination of adjusted and revised objectives, e.g. D+2 (for some
selected routes) in addition to the present D+3 objective and an adjusted D+5 (e.g.
98%) objective.
However, according to the Directive the objectives shall be fulfilled for each country-tocountry relation. This aim has not been fulfilled yet as about one out of six bilateral
cross-border flows between the Member States fail to meet this objective In 2002,
routes to/from Austria (at a lower degree), Greece and Spain are particularly affected.
In Greece significant performance increases have been realised over the last years.
The Spanish USP has failed to meet the objectives to a smaller extent than Greece.
However, in Spain no major performance improvements can be identified since 2000.
The performance across the Accession Countries exhibit a large variance. Efforts for
enhancements have just recently started in the majority of the AC. So far, none of them
are involved in the REIMS II agreement which certainly would have a positive impact on
transit time performance. Nonetheless, improvements are going on.
In order to comply with the Postal Directive
the Greek and the Spanish USP should improve their cross-border transit time
performance,
the Accession Countries should continue their efforts for improvements.
Final Report
133
It has to be taken into account that the UNEX results (MS) and the UNEX Lite results
(AC) are not comparable because of major differences in the applied methodology. The
UNEX Lite method only covers some important city-to-city relations and therefore does
not provide a representative picture. However, IPC intends to apply a unique
measurement method as from 2005, based on a methodology currently being
developed within CEN/TC331.
Domestic transit time performance: 1st class letters
As stated above, for customers representatives domestic transit time plays an

important role. Maybe this explains why they are not completely satisfied with the
current performance (see Figure 3-73 above), although the transit time results are
mostly on a high level. Apart from Greece, Spain and France in all Member States at
least 80 percent of 1st class letters have been delivered within one day.63 A majority of
the Member States have even attained a performance of over 90 percent. Overall,
major improvements across the Member States can be identified between 1998 and
2002.
Nevertheless, some USPs have not met the transit time objectives. An extraordinary
example for this is Greece. In Greece the performance level is under 50 percent (D+1
objective: 77%). Denmark, France and Belgium are also characterised by ongoing
underperformances. In case of Denmark the objective of 97% does not seem to be
feasible.
The USPs in Belgium, Greece and France should make efforts to improve their
domestic transit time performance and to meet the corresponding objectives.
In almost all Member States the domestic transit time performance seems to be
sufficient to guarantee compatibility to the cross-border transit time objectives, even
though some implemented domestic transit time objectives are set on a rather low level
(e.g. in Germany and Sweden). The underperforming MS (i.e. Greece and Spain) are
precisely the ones where the national D+1 performance is very low (i.e. Greece) or a
national D+1 objective is not implemented (i.e. Spain). It seems that at least in Spain
the compatibility between the intra-Community cross-border and the national transit
time objective of the fastest standard category is not guaranteed.
63 In Austria a D+1 objective is set for 2004. Therefore, no performance data is available for Austria yet.
134

Implementation of a D+1 service and objective in every Member State

In order to ensure a high performance with compatibility between cross-border and
national objectives Spain could be suggested to introduce a D+1 transit time service
with a respective transit time objective. This applies to the Accession Countries as well,
in those cases where a D+1 objective has not been implemented yet.
In the AC the performance level ranges from 49.4 % in Cyprus to 97% in Estonia. In
four countries the level of performance even exceeds 90%. In recent times performance
levels are improving across the countries. Nevertheless, it has to be kept in mind that
the reliability of some ACs results seems to be restricted due to inappropriate
measurement techniques. The national measurement methods make the results hardly
comparable with the MS ones.
The USPs in the AC should continue to improve their domestic transit time
performance. The application of EN 13850 for measurement will reveal the efforts which
would be needed to converge with the performance in the MS.
Harmonising D+1 transit time objectives for 1st class mail in the Community
Since 1st class domestic letter services are offered in all MS and Accession Countries a
harmonised D+1 objective across the Community (e.g. 90% D+1) could be discussed.
Against this background the ability of underperforming MS and most of the AC to
improve their 1st class transit time performance should be analysed. This will be
facilitated by the application of the EN13850 CEN standard which became
"standardised conditions". It has to be implemented in all MS (from 2004) following the
approval of the Postal Directive Committee during its last meeting in November 2002.
Final Report
135
Domestic transit time performance: other postal services
Due to a different coverage of QoS regulation and different objectives across the MS
and AC (e.g. for parcels ranging from D+1 to D+5) the performance results are not
comparable. Generally , the performance is rather good although improvements in
some countries are possible.
Customers organisations, especially those representing private consumers, are highly

unsatisfied with the number of lost and delayed postal items (see Figure 3-73). The
degree of satisfaction seems to be lower in the AC. However, clear figures are not
available for more or less all countries due to difficulties to measure this aspect and the
absence of a method proven to be reliable.
All in all the access and the delivery conditions in the MS and AC meet Community and
national requirements. The USPs adequately provide information on the universal
service. On the other hand, in 2002 three out of five USPs in question have not
achieved their average waiting time objectives.
According to our survey customers organisations in the Member States and Accession
Countries seem to be rather satisfied with the access and delivery conditions. In the
course of the Eurobaromtre survey it was also asked for the perception of access
conditions. In nearly all MS the access conditions have impaired in the perception of the
consumers. Changes in the national post office networks reducing the number of post
offices or change from post offices to agencies may be the main reason for this
decline.64
Setting of additional objectives and requirements with regard to access and delivery
If the access and delivery conditions or the service quality in Post offfices become
worse in the future, the implementation of related regulatory objectives or requirements
would be a potential opportunity, like for example the regulatory definition of maximum
queuing times.
64 At least in Sweden (replacement of post offices by agencies) and in Austria (in 2002 about 600 post
offices were closed) this could be the case.
136

Complaint handling
Customers are rather dissatisfied with the present treatment of complaints by the USPs,
as Figure 3-73 clearly points out. The results of the Eurobaromtre support this
assessment. About half of the respondents who made experiences with complaints
handling were not satisfied with the treatment. This share seems to be stable over
time.65 Unfortunately, the reasons for the low degree of satisfaction are not clear. It is
possible that most of concerned consumers are dissatisfied more because of the result
and less due to the complaint handling per se.
Customer satisfaction and survey results
The customer satisfaction with quality of service in general and especially with the
customer service is comparatively high. According to Eurobaromtre the degree of
satisfaction with customer service strongly varies between the MS. In Italy, Austria and
Germany the customer service was perceived as very low whereas in Ireland, Denmark
and Portugal the degree of satisfaction is much higher. The differences in the outcome
are not necessarily contradictory. Looking at MS-level the questionnaire results
correspond with the country-specific outcome of Eurobaromtre. In detail, business
customers seem to be more satisfied with customer service than private consumers.
Merely four USPs in the Member States publish at least parts of their results. The
Danish, Finnish and Swedish USP all failed to meet their objective figure for customer
satisfaction in 2002 whereas the Portuguese USP outperforms its overall satisfaction
objective. However, meeting or failing these index objectives does not state much about
the actual quality of service level in these countries. Setting the objective level of the
index may be somewhat arbitrary. Moreover, the indices and results between the
countries are hardly comparable.
Development and introduction of a standardised methodology for customer satisfaction

surveys
A standardised measurement method could ease the comparability between the
Member States and confine arbitrariness.
65 Eurobaromtre 58 Edition speciale (2002) Lopinion des consommateurs sur les services
dintert general, European Commission, DG Sant et Protection des Consommateurs., p. 93.
Final Report
137
Conclusions
There seems to be no evidence that the MS with a more extensive QoS regulation
perform best. In fact, the picture is miscellaneous. For example, the Portuguese USP,
which is highly regulated, generally provides postal services with a high and sufficient
quality. That applies to the Swedish USP as well, although it faces relatively few
regulatory requirements. On the other hand, the performance in France is partly
unsatisfactory in spite of a widespread QoS regulation.
Against this background the impact of more QoS regulation is ambiguous. Additional
aspects have to taken into account in order to infer from the scope and depth of QoS
regulation to the performance and vice versa. In the further course of this survey
important influencing factors will additionally be included in the analysis in order to
highlight this crucial relation.
3.4.4 Sum-up: Potential adjustments of intra-Community and national QoS

regulation
As the analysis in chapter 3 has revealed, the requirements of the Postal Directive are
widely met. Few limitations but also some opportunities have been identified.
Adjustments of future QoS regulation seem recommendable from this point of view. The
enlargement process may strengthen the need for changes in QoS regulation. In the
following the identified potential opportunities for QoS regulation are summarised. The
list encompasses possible amendments and modifications identified in chapter 3. Most
of these opportunities will be subject to the analysis in chapter 4.
Amendment of the current objectives with respect to the entire cross-border mail
traffic
Identification of a transition period for the Accession Countries
Relaxing the share of country-to-country flows to achieve the objectives
Improving cross-border transit time performance in all Accession Countries and

some Member States (i.e. Greece, Spain)
Implementation of a D+1 service and objective in every present MS and AC
Harmonising D+1 transit time objectives in the Community
138

Implementation of an additional objective for 1st class mail with a longer transit time
Enforcing CEN standard EN 14534 for the measurement of bulk mail
Transit time objectives for parcel services
Transit time objectives for other postal services (e.g. 2nd class mail)
Improving domestic transit time performance in the Accession Countries and some
Member States (i.e. Belgium, Greece, France)
Loss and delay
Requirement to measure the number of lost items
Implementation of additional regulatory objectives or requirements (e.g. maximum

queuing times, density criteria)
Harmonised complaint handling Enforcing CEN standard EN 14012
Measurement of customer satisfaction on national level (as requirement or

recommended as best practice)
Development and introduction of a standardised methodology
Incentive structure and implementation procedure

Implementation of simple disciplinary mechanisms (direct link between QoS failure
and penalty)
Enforcing publication requirements
Customers involvement
Ensuring the involvement of the relevant stakeholders in the setting procedure of
regulatory QoS requirements and objectives
Final Report
139
Analysis of QoS regulation on national and Community levels

feasibility of regulatory amendments
This chapter deals with selected potential opportunities of the development of quality of
service regulation and evaluates the economic feasibility of these opportunities . It
analyses the economic impacts of the introduction, upgrading or adjustment of QoS
objectives and requirements. This analysis provides the basis for the derivation of
recommendations which is undertaken in chapter 6.
The third section discusses the feasibility of potential measurement methods focusing
on European QoS standards. This includes especially the feasibility of the transit time
standard EN13850 in the AC. Furthermore, the standard concerning complaint handling
procedures will be discussed.
The last section summarises the results of the analysis. A list of feasible opportunities
for future QoS regulation will be derived by assessing costs and benefits of selected
opportunities. Limitations concerning the potential quantitative impact (costs, prices) of
changing QoS objectives on the one hand and the customers attitude (acceptability) on
the other restrict the economic evaluation of costs and benefits. However, in section
4.1.1 a framework is provided to assess at least the qualitative effects of changes in
QoS regulation.
The following list gives an overview of the potential opportunities that will be treated in
the next section:
Transit time objectives
Cross-border transit time objectives
Feasibility of the current transit time objectives (100% of country-to-country

relations should meet a D+3 objective at a level of 85% and a D+5 objective
at a level of 97%)
Change of the current objectives
Compatibility of cross-border and domestic transit time objectives and

performance
Domestic transit time objectives
Harmonisation of D+1 transit time objectives in the MS at Community level
Introduction of regulatory transit time objectives for universal postal services

other than 1st class mail (parcel services, 2nd class mail) in all MS
140

In the second section about measurement issues the other QoS dimensions are dealt
with:
Access to postal services
Delivery issues
4.1
Transit time
4.1.1 QoS regulation, costs and demand for postal services

While the current regulatory framework and the related, actual QoS level provided by
the USP have been described in chapter 3, this section focuses on potential changes in
QoS regulation (i.e. potential opportunities). Their feasibility should be evaluated
against the background of related costs and benefits. Depending on the focus these
costs and benefits can be assessed on a micro- or a macro-economic level. Whereas
the macro-economic view stresses the role of QoS regulation for the economy as a
whole, the micro-economic view focuses on the impact of QoS regulation on the market
outcome and on the behaviour of concerned individuals or organisations (NRAs, USPs,
actual and potential postal customers). In this study costs and benefits of changes in
the QoS regulation will be evaluated from a micro-economic point of view.
The analytical framework to assess the costs and benefits of QoS regulation comprises
of supply and demand patterns, taking account of the costs of the respective postal
network, the actual service quality, willingness to pay for postal services, mail
substitution by other communication media, level of liberalisation and competition as
well as country specific factors, influencing the demand as well as the provision of
postal services. In order to evaluate the impacts of QoS regulation static effects would
have to be separated from dynamic effects for methodological reasons. A profound
economic analysis would require the application of econometric methods, and thus the
derivation and application of various elasticities. Due to a substantial lack of data such
an analysis cannot be conducted. Therefore the evaluation can only be of qualitative
nature. Although a quantitative analysis cannot be conducted, we consider it useful to
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Final Report
outline its methodology for didactical reasons because the qualitative assessment
builds on top of the same foundations.
Figure 4-1:
Analytical framework
Regulatory framework
Scope of Universal Postal Service
QoS regulation
Demand
(USP volumes)
Degree of
competition
Other postal operators,
mail substitution
QoS level
provided by the USP
Postal network
organisation and
related costs
Country-specific
factors
size, degree of
urbanisation
Costs and benefits of QoS regulation are always related to the USPs service provision
and its determining factors. We assume that the USP is optimising its postal network
and the related QoS level subject to a number of restrictions determined by technical
and financial conditions (cost and production function), by demand conditions (volume
and prices), and in particular by the regulatory framework (USO and related QoS
regulation, price regulation) as summarised in Figure 4-1.
Assuming a static environment with given demand and cost conditions the direct
impact of a specified change in QoS regulation (e.g. an adjustment of the domestic
transit time objective from D+1 90% to D+1 95%) on USPs costs would be analysed
by applying cost elasticities.66 Related variations in demand and their feedback on the
USPs cost situation (indirect effects) could be derived by using price and quality
elasticities of demand.67
66 A relative increase in QoS e.g. a 10% increase in the number of post offices induces a relative
increase in costs of e.g. 3%.
67 Price elasticitiy of demand: It is widely assumed, that the price elasticity of demand for postal services
is between -1 and 0. That means for example that an price increase of 10% is linked with a volume
decrease of less than 10%.
Quality elasticity of demand describes the effect of a 10% increase in QoS (e.g. 10% more access
points) on the demand. If the elasticity is positive but lower than 1, 10% increase would be linked with
a less than 10% demand increase.
142

In order to identify the benefits of an improved QoS performance the following

interdependencies must be taken into account:
Impact of increasing QoS performances on demand assuming given prices for

postal services (measured by the quality elasticity of demand).
Impact of potential price increases on demand if improved QoS performances are

linked with higher costs (measured by the price elasticity of demand).
The described relationships have opposite effects. Increasing prices usually induces a
decrease in demand. An improvement in QoS may induce more demand.68 Depending
on which effect is the strongest the result could be positive or negative in terms of
USPs revenues. In case of a qualitative analysis only, the difficulty arises to assess
whether or not the resulting effect is still positive.
It should be stressed that the data base for a quantitative analysis is incomplete. While
some information exists about the price elasticity of demand with respect to postal
services, the level of the quality elasticity and in particular the inter-relationship between
price and quality effects are still not empirically analysed.
As already mentioned; the above outlined methodology is based on a static
environment. This means that the preferences of the consumers and business
customers on the one hand and the postal market conditions on the other are assumed
to be given and stable. If these assumptions are removed the analysis is even more
difficult and complex. In a dynamic environment variations in the preferences as well
as in the market conditions have to be included. E.g. we would have to take account of
the fact that the demand behaviour of the consumers and postal customers is
influenced by the variety of communication devices. Such a development is reflected by
an increasing use of other communication media (e.g. internet) instead of postal
services (mail substitution). Moreover, the degree of current and future competition is
considered as an important factor negatively affecting mail volumes of the USP. In
growing markets this would not necessarily be the case. However, in case of stable or
even declining market volumes a decrease in the USPs market share will clearly be
associated with a loss of mail volume for the USP.
Therefore, market opening and mail substitution may go along with a loss of mail
volume for the USP. Consequently, the USP faces an increasing cost pressure. In this
situation the USP is forced to reduce its costs or to increase the prices (or both) in order
68 The interdependency between quality changes and demand changes is not known because it strongly
depends on the preferences of the consumers and business customers. But it can be assumed that
an increase in QoS is at least not linked with a decrease in demand ceteris paribus.
Final Report
143
to avoid financial losses. Though, cost saving programs usually have an impact on the
postal network and the level of QoS provided.69
As already outlined, an extensive data basis about quantitative interdependencies
between the identified factors of influence would be necessary to conduct a detailed
economic analysis. Furthermore, the large number of countries that has to be included
in the analysis, requires even more information. However, the outlined methodological
steps can provide a framework to assess at least the qualitative effects of QoS
regulation and thereby provides preliminary insights into these issues. This will be done
in the next sections. The presented economic framework will be used as a guideline to
assess the feasibility of potential opportunities for future QoS regulation.
Thereby, we want to emphasise that we will analyse those changes in QoS regulation
which are considered to influence and restrict the behaviour of at least one USP.
Indeed, all changes in quality of service regulation do not necessarily induce
corresponding variations in the actual QoS level. For example, assuming that a USP
has a domestic transit time performance of D+1 95%, an adjusted objective from 85%
to 90% would most likely not have any impact on the behaviour of the USP. Thus, we
neglect such cases.
Based on this framework the evaluation of the potential changes in QoS regulation will
be structured in the following manner:
Brief description of the opportunity
Empirical findings (extract and follow-up discussion of the description carried out in
chapter 3)
Assessment of the technical feasibility (potentially restricted by exogenous factors

e.g. geographical and demographic conditions)
Evaluation of potential cost effects
The evaluation of potential demand effects is conducted in section 4.1.3.
69 For example, the cost saving program of DPAG (STAR) is characterised by reducing the number of
access points (letter boxes and post offices) within the limits of the regulatory framework.
144

4.1.2 Analysis of objectives and performances
4.1.2.1 Intra-Community letter mail cross-border postal services
4.1.2.1.1 Feasibility of the current objective

The Postal Directive requires that 85% of the items of correspondence of the fastest
standard category should be delivered within 3 working days (97% within 5 days). This
requirement applies to the average performance of all relations as well as on each of
the individual relations between the Member States. Currently, 210 relations are subject
to this requirement. In case of an enlarged EU the number of relation will increase up to
600.
Member States: Empirical findings
Since 1998 the overall Community objective for the average of possible postal relations
calculated as weighted average70 of all included relations is already met. The
average performance has been exceeding 90% since 1999.
The second part of the objective 85% for every single relation is still not met (Figure
4-2). About 17% of the 210 relations underperformed in 2002. These are mainly postal
relations from / to Greece, Spain and Austria. Austria used to meet the requirements.
Only since they restructured their postal network their transit time performance
decreased.71 In contrast, the Spanish and the Greek USPs face the problem of
underperforming since the beginning of measurement.
70 The weighting variable is the mail volume per relation.

71 Building of centralised sorting facilities.
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Final Report
Figure 4-2:
Intra-Community cross-border transit time D+3 performance on

country-to-country relations
Share of country-to-country relations
50%
40%
30%
20%
10%
0%
<80%
1998
2000
80%-85%
2002
85%-90%
90%-95%
95%-100%
Cross-border transit time performance
Source: IPC (based on UNEX FY 1998/2000/2002)
Nonetheless, the share of country-to-country mail flows outperforming 85% has been
significantly increased. In 1998 less than 50% of the relations met the D+3 objective,
whereas in 2002 more than 80% of the relations were better than 85%.
Furthermore, the standard deviation of the QoS performance has decreased (Table
4-1). This outcome is also reflected by the range of country-to-country transit time
performance. The range has declined from more than 70% in 1998 to about 50% in
2002. From this it can be deducted that a tendency to more harmonised QoS
performance in the countries can be identified.
Table 4-1:
Descriptive statistic of intra-Community cross-border transit time

performance (country-to-country relations)
1998
2000
2002
Range (minimum maximum value)
25.8% - 98.5%
37.6% 98.9%
48.2% 99.1%
Mean value (non-weighted average)
78%
88%
90%
Standard deviation
18%
12.53%
8.73%
Source: IPC (FY1998, 2000, 2002) and own calculations
146

Since 2001 IPC has additionally published the results of the D+5 transit time
performance. In 2002 about 15% of the relations (33 in total) failed to meet the objective
of 97% (Figure 4-3). Mainly relations including Greece, but also Spain, Austria and Italy
are concerned as well. Excluding Spain and Greece less than 5% of the remaining
relations (7 in total) would have missed the objective.
Figure 4-3:
Intra-Community cross-border D+5 transit time performance on

country-to-country level (based on IPC UNEX FY 2002)
90
80
Number of relations
70
60
50
40
30
20
10
<90
90-90.9
91-91.9
92-92.9
93-93.9
94-94.9
95-95.9
96-96.9
97-97.9
98-98.9
99-99.9
100
Range of D+5 performances
Source: IPC (UNEX FY2002)
About 70% of the relations have performed better than 98%, out of which about 40%
have exceeded even 99%. The overall performance is 98.8% in 2002.
Accession Countries
At present, comparable results about the ACs cross-border transit time performance do
not exist yet. As already outlined in section 3.3.272 the cross-border transit time
performance is measured by a cost-saving version of UNEX (UNEX Lite). Therefore
only a low number of mail flows is actually measured. Furthermore, the method is not
based on real mail flows but only on 20g letters between important cities of the
respective countries. In 2002, on average for all the flows measured by UNEX Lite,
72.1% of the mail was delivered in at least 3 days, and 94.2% within 5 days.73 The
72 See table 3.16 on page 99.

73 IPC (UNEX Lite FY2002).
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Final Report
performance on country-to-country relation is characterised by a high degree of

variation. 90 of the additional 390 country-to-country (resp. city-to-city) mail flows74 are
covered by UNEX Lite. Only less than 30% (25 in total) have a performance higher than
85%.
Figure 4-4 summarises the expectations of the NRAs and USPs with regard to the point
in time when the intra-Community cross-border transit time objectives will be met.
Whereas most of the USPs have an expectation about the lengths of the transition
period the majority of the NRAs did not answer the question. Most USPs expect that
they will achieve the objective in 2005 or 2006.
Figure 4-4:
Expected year of achieving the overall intra-Community crossborder transit time objectives (D+3 85% and D+5 97%)
CZ, EE, LV
n/a
CZ, MT, EE, LT, PL,

SK, SI
PL
2004
CY, LV
HU, LT, MT, SI
2005
HU
CY, SK
2006
4
NRA
USP
Due to the pressure to adapt to the European QoS levels it is generally expected that
the cross-border transit time for mail flows to and from the AC will improve as a result of
the enlargement process. Within the current EU perceptible changes in the transit time
performance caused by the enlargement process are not expected.
During the first years of the integration process a modest decline in transit time
performance is expected. Furthermore, logistical constraints play an important role in
74 Only including mail flows within the enlarged EU. Cyprus, Latvia, and Lithuania did not take part in
2002.
148

the view of the respondents. The existence of direct flight routes to all MS is the
exception.
Against this background in an enlarged Community the number of routes which will fail
to meet the D+3 objective is expected to increase, both in absolute and relative terms.
However, the USPs and NRAs in the EU are unanimously75 assessing that the average
objective of 85% D+3 delivery on a volume-weighted basis will still be met on average
in case of enlargement due to the relatively small mail volumes from and to the AC.
Thus, it appears that several country-to-country relations have problems to achieve the
current intra-Community cross-border transit time objective. In the enlarged EU this
problem would be even more obvious. In the following pages potential technical
limitations will be discussed which may hamper the feasibility of the current intraCommunity cross-border transit time objective for every bilateral mail flow.
Technical feasibility
First, it is necessary to identify whether there are any exogenous restrictions

responsible for the ongoing and expected failure of the cross-border transit time
objective D+3 85% on the level of the individual country-to-country mail flows. One
obvious limitation could be the geographical distance between the countries. Therefore,
the impact of distance is evaluated in more detail. The relative location of the origin and
destination country is used as indicator for the distance criteria.76 Each country-tocountry relation is therefore attributed to one of the subsequent groups:
The destination country is at the periphery of EU.77
The origin country is at the periphery of the EU.
Both countries are at the periphery.
Origin and destination countries are adjoining.78
Figure 4-5 illustrates the distribution of under-performing country-to-country relations

dependent on their relative location. The first group of bars presents the distribution
including Greece and Spain, in the second group of bars these countries are excluded.
As expected in case of the under-performing relations nearly half of them are
characterised by the fact that the origin and especially the destination country is at the
periphery of the EU.
Based on the domestic transit time performance described in Chapter 3 especially the
Greek and the Spanish USPs face strong problems. Excluding all relations of these two
75 Based on survey of USPs and NRAs of the MS.

76 The distance between to countries is difficult to define. Reference points in the countries are needed
(e.g. important cities, capita, or the location of the central office of exchange) and the type of distance
(by air, by street) have to be determined.
77 Finland, Greece, Ireland, Italy, Portugal, Spain, Sweden and United Kingdom are classified as
countries lying at the periphery of the EU.
78 In case they are adjoining countries like Spain and Portugal the neighbour-criteria is dominant on the
other three.
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Final Report
countries the picture of the low-performing relations is significantly changing. The

absolute number of failing postal relations declines from 37 to only 8. Hence, the impact
of relative location and transit time performance seems to be much weaker than in case
of all relations.
Number of under-performing country-to-country relations
Figure 4-5:
Intra-Community cross-border transit time performance and relative

country location for under-performing country-to-country relations (2002)
20
16
12
8
4
0
all MS
Adjoining countries
Periphy: Origin
all MS except ES and EL

Periphy: Destination
Periphery: Both
Source: IPC (UNEX FY2002) and own calculations
Under the condition that the under-performance in Greece and Spain is mainly caused
by logistical problems in their postal networks it appears that the relative location of a
country is not the main driver for the failure of a country to meet the cross-border transit
time objective between the present MS.
However, the relative country location remains a relevant secondary factor conditioning
performance. Figure 4-6 presents the structure of the bilateral mail flows linked with the
relative country location depending on the cross-border transit time performance.
Regarding the relations characterised by a performance above 95% more than 40% of
them represent mail flows between adjoining countries. With less than 5% it is very rare
that both countries are at the periphery of the EU.
With decreasing performances the structure is changed. The share of mail flows
between adjoining countries decreases while the share of mail flows between edge
countries rises. Therefore it appears that with improving transit time performance the
relative location has an increasing impact on the performance.
150

Figure 4-6:
Intra-Community cross-border transit time performance and relative

country location for bilateral mail flows (all MS and without EL and
ES, 2002)
50%
40%
30%
20%
10%
0%
> 95%
Adjoining countries
90%-95%
Periphy: Origin
85%-90%
< 85%
Periphery: Both
None
50%
40%
30%
20%
10%
0%
> 95%
Adjoining countries
90%-95%
Periphy: Origin
Source: IPC (UNEX FY2002) and own calculations
85%-90%
< 85%
Periphery: Both
None
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Final Report
UNEX Lite results tend to confirm that the probability to perform better than 85% is
linked with the relative location between the origin and the destination country. In more
than 60% of the relations concerned the countries are adjoining or even nearly
adjoining.79 Due to the low number of AC-AC and AC-MS relations covered by UNEX
Lite a more detailed analysis of the outcome cannot be provided here. Nonetheless, it
appears that the relative location plays a more important role in case of the AC than for
the present MS (which, of course, can also be explained by the degree of economic
integration).
Realising a short transit time of cross-border mail between the origin and the destination
countries is mainly a logistical issue as described in Figure 4-7. Ideally, cross-border
items should be collected and transported to the Office of Exchange(s) (OoE) in the
origin countries within the same day. In order to reach delivery within D+3, cross-border
mail handling in the OoEs and transport between the countries of origin and destination
should take place within 2 days. The distribution and the length of the time windows
strongly depend on country-specific characteristics of the related national postal
networks and the structure of their cross-border mail flows.
Figure 4-7:
D+0
D+1
D+2
D+3
Transit
country
Hub
Collection
point
Sorting
facility
Country of origin
OoE
OoE
Sorting
facility
Recipient
Country of destination
79 E.g. relations between Slovakia, Czech Republic and Slovenia or between Estonia and the
Scandinavian countries.
152

There are several technical and organisational problems which may cause a delay in
cross-border transit time.
1. Logistical problems between the point of induction (collection point) and the office of
exchange (OoE) in the country of origin Responsibility: USP of the country of
origin
2. Logistical problems between the office of exchange and the recipient in the country
of destination Responsibility: USP of the destination country
3. Problems in handling cross-border mail items within the OoEs
4. Problems between the offices of exchange of the origin and the destination country:
Missing or insufficient transport relations
Organisational problems concerning the interface: problems in the

organisation of the handing over of mail items (technical as well as timing
problems).
As already indicated logistical problems within the domestic postal networks of

concerned USPs could be one source of delay. These subjects will be addressed in
more detail in the context of the compatibility of domestic and cross-border transit time
objectives and performances (see section 4.1.3). The third and in particular the fourth
group of problems are directly related to cross-border services and will therefore be
discussed below.
Starting from the OoE in the country of origin, the transport to the country of destination
is organised using direct connections or international hubs. Depending on the selected
means of transportation the time needed could strongly vary:
Direct connections
Direct evening flights on each country-to-country relation: In the most extreme case
this would mean that each USP would have to manage 14 (24 in the enlarged EU)
evening flights every working day.
In case of adjoining countries or low-distance routes ferries and lorries are suitable
alternative means of transport (e.g. from Frankfurt to the Benelux countries).
Use of hubs
USPs of countries without international airport may co-operate with foreign USPs
who already have built up a well-organised access to an airport in their country (e.g.
in Germany DPAGs OoE is located near the international airport of Frankfurt).
Depending on the country location and the accessibility of international hubs it might
be the case that two hubs have to be used (e.g. if the Estonian USP uses the airport
of Stockholm or Helsinki as first hub, some cross-border mail has to be transported
to Frankfurt. From Frankfurt the mail can be flown to Rome or Lisbon).
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153
The decision on routes and means of transport depends on time restrictions and cost
considerations. It is plausible to assume that in case of high cross-border mail volumes
between two countries (e.g. Sweden and UK) direct connections are implemented by
using chartered aircrafts or scheduled flights if available. In case of low mail volumes
and depending on the availability of scheduled flights the least expensive hub-solution
is more economic and thus more likely to be applied.80 In any case, at least two USPs
are involved to organise the transport and delivery of cross-border mail. In case of hubsolutions this number may increase to three, four, and more. Furthermore, third parties
non-USPs can be involved in the transport process (e.g. airlines). With increasing
number of involved USPs and other parties the organisational requirements rise. This
may induce increased transportation time of cross-border mail. If the USPs are used to
co-operate with each other, these problems may partly vanish. Nonetheless, the risk of
failure is higher than in case of well-organised international express networks of globally
acting companies using a hub and spoke system. The hub and spoke solution of
express companies is therefore not comparable with the described procedure where
several organisations are involved. United Parcel Services (UPS) for example primarily
uses own aircrafts81 and mainly transports own express items. Thus, UPS can optimise
its cross-border transport network without consideration of other companies needs.
According to the empirical findings with respect to the present MS it is highly probable
that the described organisational problems are mostly solved. Long experience and cooperation has supported reducing the described limitations. The high degree of
economic integration in the EU additionally guarantees a sufficient logistical network
(availability of well-located airports and suitable evening flights).82
In contrast, in the AC the described problems are of noticeable relevance. The logistical
connection of the AC with the present MS may improve with increasing degree of
economic integration. Nearly all AC have the possibility to get access to an international
airport in at least one adjoining country. The Baltic countries may make use of
Scandinavian hubs or OoEs (Stockholm, Helsinki). Slovenia and Hungary may use the
airport of Vienna. Slovakia and the Czech Republic are able to use Praha (the most
important airport in the AC). Malta has strong relations to UK (London). In Poland and
Cyprus the situation seems to be more difficult. Poland may have access to Frankfurt
and the Scandinavian airports whereas the next available airport close to Cyprus is
Athens in Greece. Only Cyprus is confronted with poor connections (low number of
scheduled flights).
80 In hubs mail is consolidated so that the mail volume may be relatively high. The fix costs of flights are
very high. The more mail is transported by one aircraft the less are the average costs per kg mail.
81 The main reason that UPS mainly use own aircrafts is to ensure the reliable transport connections.
82 Including Norway does not change the picture at all. Iceland which really lies at the edge of Europe is
a special case. Only in relation to the Scandinavian countries the cross-border transit time
performance is significantly higher than 85%. To all other MS the transit time is lower. Comparing with
the average value in 2002 provided by Icelands USP (inbound D+3 86.4% and outbound 92.8%) it
can be supposed that the main mail streams are between Iceland and the Scandinavian countries
whereas the weight of mail flows to the other MS is relatively low. The performance is mainly
influenced by logistical problems (missing transport relations and changes in the national postal
network), and climate conditions.
154

From this discussion follows that the 100% coverage of the current cross-border transit
time objectives would be technically feasible for the present MS. In the AC with
exception of Cyprus the feasibility is highly probable under the precondition that the
organisational and transport problems can be solved. These problems are in principle of
temporary nature. Increasing economic integration may additionally help getting rid of
these problems.
Evaluation of potential cost effects
As already outlined only a minority of the country-to-country mail flows between the
present MS and a highly probable majority of the flows to and from the AC has
failed or is expected to fail the current cross-border transit time objectives in the short
term. Regarding these underperforming country-to-country relations we want to address
the following question: What would be the cost effects in order to meet the current
objectives?
To answer this question we need to investigate on organisational and logistical
problems which are mainly responsible for the underperformance. In the following
paragraphs we will make some considerations on related transport and organisational
costs.
Organisational costs are related to the handling of cross-border mail items in the OoE
on the one hand and the specification and implementation of interfaces between the
postal operators on the other. In most cases of failure we assume that a well-organised
OoE is not in place yet, investments in sorting technology and the work flows
(organisation) are necessary. Therefore, financial resources and consultant support are
needed especially in the starting period. Moreover, the process of re-organisation takes
some time. The running costs of a OoE are not as relevant as the investment costs in
the starting period. Furthermore, these costs are not really additional costs.
International mail has to be handled regardless of the type of organisation. Problems
within the OeE lay in the responsibility of the respective USP. Auditing programs
provided for example by IPC help to improve the service quality in the OoE.
The coordination-costs between operators is the second important factor. The intraCommunity cross-border mail network is characterised by a large number of different
operators (15 resp. 25 in the enlarged EU). These problems are and will be solved by
technical standardisation and bilateral as well as multi-lateral agreements between
sending and receiving postal operators.83 The agreements between the operators
additionally determine the technical and especially the time restrictions which have a
direct impact on transport costs.
The transport costs of course depend on the means of transport (ferry, train, lorry,
scheduled flights, chartered aircrafts), the distance, and the available time window. The
83 This takes place on UPU-level (especially PostEurop, IPC), CEN-level as well as bilateral level in case
of high mail volumes between two countries, e.g. Sweden and UK or Ireland and UK.
Final Report
155
selection of the means of transport strongly is restricted by the available time window
and to a less extent the distance. For a distance of e.g. 1,000 km under ideal traffic
conditions a lorry needs about 12 hours. If the transport time window e.g. is only 6
hours, it would be necessary to use more expensive air transport in order to keep to
schedule. Thus the shorter the time window the higher the transport costs.
Besides the absolute level of transport costs the transported mail volume (number and
weight of items) plays an important role. As long as transport costs are mostly variable
costs, the impact on average costs is low. This would be most probably the case if
cross-border mail is transported by using e.g. scheduled flights, ferry or train relations.
In case of the extremely expensive alternative of chartered aircrafts, the share of fixed
costs would become important. The more items (resp. kilos) are transported the less
are the average costs (per item/kilo) depending on the means of transport.
Cross-border mail volumes are generally considerably lower than domestic mail
volumes. Thus, there is a strong incentive to consolidate cross-border mail volumes in
order to reduce transport costs as well as to use regular traffic. Time restrictions e.g.
induced by demanding cross-border transit time objectives may limit the possibilities of
consolidation and thus the choice of low-cost regular services since reduced time
windows would significantly increase transport costs.
In the existing EU the current cross-border transit time objectives do not induce
additional costs. This can be derived from the empirical findings in the MS which
indicate that the intra-Community cross-border network seems to be well-organised and
able to meet the objectives. The difference between the weighted (93.2%) and nonweighted average (90%, see Table 4-1) of the cross-border transit time performance
supports this view. If each country-to-country mail flow had the same number of items,
the weighted and the non-weighted average would be identical. If the weighted average
is larger than the non-weighted one, high-volume mail flows tend to have a better
performance than low volume flows. Thus, it appears that the transit time performance
is positively related to the mail volume of the respective flow.
Unfortunately, the volumes of each bilateral mail flow are not publicly available.
Therefore we are not able to assess the interdependency between bilateral mail
volumes and transit time performances in detail. But it should be stressed that the
absolute level of transport costs on the one hand and the number of transported items
(resp. weight) on the other have an impact on transport costs per item.
As already deducted, relations between adjoining countries are more probably
outperforming than long-distance relations (see Figure 4-6). If the degree of economic
integration as well as related cross-border mail volumes are higher between adjoining
than non-adjoining countries, the transport costs per item would be significantly lower
than for long-distance and low-volume mail flows. Both aspects play an important role in
the decision process of a cost-minimising USP and thus may explain the reluctance of
some USPs to outperform on individual relations.
156

In the enlarged EU the picture would change. An adaptation process connected with the
time-consuming re-organisation of OoEs and the coordination of the cross-border
transport relations would be necessary in all of the AC countries. Furthermore, it is not
guaranteed that all AC would have access to regular transport services (especially
scheduled evening flights). In case a chartered aircraft is the only substitute transport
solution, costs increase as a consequence of a shorter time frame. In case that the daily
cross-border mail volumes are relatively low between the AC and MS transport costs
per item would also be relatively high. Therefore, even the current D+3 objective could
be very demanding for some of these countries (e.g. Cyprus and the Baltic countries).
Nevertheless, we expect these problems in general to be of temporary nature. Indeed,
the development of the logistical cross-border network strongly depends on the
economic development in these countries and on the degree of economic integration
between the AC and with the MS, which are both expected to increase in connection
with enlargement.
Conclusion
In the present MS the logistical conditions are sufficient for meeting the current
objectives, both on average and for all country-to-country relations.
For the majority of AC the current cross-border transit time objectives are in principle
feasible as far as the organisation of the OoEs and the transport between the countries
is concerned. As regular services should be used in order to limit the transport costs per
item, suitable scheduled transport relations in each of the AC would be a necessary
condition for the feasibility of the current cross-border objectives.
4.1.2.1.2 Feasibility of changes in the cross-border transit time objectives

After analysing the feasibility of the current cross-border objectives for the present MS
and the enlarged Community potential changes will be analysed. As already mentioned,
the intra-Community cross-border transit time performance has continuously improved
in the last years. Based on this development it could be argued that the existing
objectives no longer provide an incentive to further improve quality of service and that
therefore adjusted or upgraded transit time objectives should be set. Although for some
cross-border relations even on the basis of the present objectives there is still room for
improvement, the opportunity to change the transit time objectives will be analysed in
the following paragraphs.
A wide range of potential changes in the transit time objectives can be considered as
listed below, from upgrading the current objectives (i.e. significant change) to status
quo, including adjusting the current objectives (i.e. minor change):
Final Report
157
1. Upgrading of the current objective
Upgrading the D+3 objective (e.g. D+2 80%)
Upgrading the D+5 objective (e.g. D+4 95%)
Upgrading both the D+3 and the D+5 objectives (e.g. D+2 and D+4)
2. Adjustment of the current objective
Adjustment of the D+3 objective (e.g. D+3 90%)
Adjustment of the D+5 objective (e.g. D+5 99%)
Adjustment of both the D+3 and the D+5 objectives

(e.g. D+3 90% and D+5 99%)
3. Mixed changes (upgrading and adjustment)
Upgrading the D+3 objective and adjustment of the D+5 objective

(e.g. D+2 80%; D+5 99%)
Adjustment of the D+3 objective and upgrading the D+5 objective

(e.g. D+3 90%; D+4 95%)
In order to cover the whole range of possible opportunities the subsequent options will
be analysed in more detail:
Option 1: Upgrading D+3 to D+2
Option 2: Upgrading D+5 to D+4
Option 3: Adjustment of D+3
Option 4: Adjustment of D+5
Combinations of these options will provide the results of the above listed composed
changes in the cross-border objectives.
The arguments against or in favour of these opportunities are in principle the same as
those discussed in the first section on the feasibility of the current objectives. Therefore
this section only aims at sorting out which opportunities are persistently not feasible
from an economic point of view. Besides the identified effects on costs, the
interrelationship between domestic and cross-border transit time has to be taken into
account in the analysis (see also section 4.1.3). Section 4.1.4 deals with the customers
view on transit time and estimations about their willingness to pay for upgraded or
adjusted cross-border transit time objectives (demand side).
158

Option 1:
Upgrading D+3 (e.g. D+2 80%)
According to the UNEX results for 2002, 76.4% of the intra-Community cross-border
mail volume is delivered within 2 days. IPC additionally publishes the average transit
time of incoming and outgoing items per relation stated as number of days.84 The
number of relations with an average transit time of 2 or less days represents 12.4% of
all intra-Community country-to-country relations. However, an average performance of 2
days does not mean that 100% of the cross-border mail items are delivered within D+2.
The same result would be achieved if e.g. 30% is delivered the next working day, 40%
the second and 30% on the third working day after collection. Especially Germany and
Sweden have a high share of relations with an average transit time equal or lower than
2 days (13 and 5 respectively out of 28 intra-Community relations in total). Only 8 of the
15 MS have at least one relation with such a performance. The number of bilateral mail
flows which actually achieve e.g. D+2 80% is not available. It can be expected, that the
share is higher than 12.4% but significantly lower than 76.4%.
Table 4-2 summarises the attitudes of the regulatory authorities and the universal
service providers with regard to an upgrading of the cross-border transit time objective.
Table 4-2:
Feasibility of a revised intra-Community cross-border objectives D+2:

80% and D+4: 97% in the view of the MS
NRA
USP
Yes
BE, DK, SF, IE, ES, SE
BE, SE, LU, IE, IT
No
DE
DK, EL, FR, NL, PT
AT, FR, EL, IT, LU, PT, UK
AT, DE, SF
ES, UK
Dont know
No statement
Note:
The Dutch NRA did not answer the questionnaire.
Comparing the answers of the NRAs and the USPs the operators are more pessimistic
concerning the possibility to achieve an upgraded intra-Community cross-border
objective. However, half of the NRAs were not able to give any assessment. The ACs
NRAs and USPs are even more uncertain about the feasibility of an upgraded crossborder transit time objective as presented in Table 4-3.
84 see IPC (UNEX FY2002).
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Final Report
Table 4-3:
Feasibility of a revised intra-Community cross-border objectives D+2

80% and D+4 97% in the view of the AC
NRA
USP
Yes
CY, HU, SI
HU, PL, SK, SI
No
CZ, LT
CZ, EE, LT, LV, SK
CY, EE, LV, MT
MT, PL
Dont know
No statement
The empirical findings indicate that a D+2 objective is already feasible for at least a part
of the country-to-country mail flows. The higher the objective level (e.g. D+2 60% or
80% or even higher), the more should the share of relations be reduced. But would an
upgraded objective (even on a low level) be feasible for all relations even in an enlarged
EU? The same economic arguments as stated above are valid for answering this
question. Organisational as well as transport costs would be affected, and may lead to
price increases.
In order to achieve the upgraded transit time objectives, the stakeholders expect that a
reorganisation of interconnection agreements between the concerned postal operators
would be needed. The time windows for transport would have to be redefined. D+2
would require a cross-border network nearly free of frictions. The national and the
cross-border networks would need well-defined interfaces with suitable transport
connections to the next international hub or directly to the destination country.85 The
time windows and the locations of the OoEs in relation to the national sorting facilities
should be very well co-ordinated between the national postal networks on the one hand
and the cross-border network on the other. Figure 4-8 describes one potential change in
the time windows in order to organise the transport of cross-border items in case of
upgrading D+3 to D+2.
In this example outlined in Figure 4-8 all parts of the transport chain are affected
compared to the starting conditions (D+3) (see Figure 4-7 page 151). Cross-border
items should be transported from the collection point to OoE of the origin country and
from destination countrys OoE to the recipient within the same day. These
requirements would strongly influence the organisation of the national postal
networks.86 The time window for the transport between the origin and the destination
country would be reduced, as well.
85 In Germany DPAG has installed a night air mail network for domestic priority items. The centre of this
network is the airport Frankfurt which is also the location for the international sorting centre of DPAG
(OoE). Therefore, DPAG is able to transport cross-border mail collected in all parts of the country to
Frankfurt within a half day.
86 It should be kept in mind that the share of bilateral mail flows not achieving e.g. D+2 80% could be
very high.
160

Figure 4-8:
Transit time and transport of cross-border mail:

Upgrading D+3 to D+2
D+0
D+1
D+0
D+1
D+2
D+2
D+3
Transit
country
Hub
Collection
point
Sorting
facility
OoE
Country of origin
OoE
Sorting
facility
Recipient
Country of destination
Apart from these organisational challenges and related consequences for national and
cross-border network structures it is highly probable that transport costs would be
affected by an upgrading of the D+3 objective. As already indicated the distance
between the countries (i.e. the relative location of origin / destination country) has a
negative impact on cross-border transit time performance (distance can only be
outweighed by strong economic integration associated with high mail volumes). The
average transit time of 2 days is mainly achieved on large volume relations between
adjoining countries. 11 out of 13 relations are between Germany and direct neighbour
countries (to and from AT, DK, FR, LU and NL, and from BE). In the Swedish case the
average transit time of 2 days is mainly achieved between Sweden and the
Scandinavian neighbour countries.87 Thus, in case of long distances there could be an
additional need for direct evening flights between the present MS instead of using costsaving but more time-consuming hub-solutions where mail is consolidated before the
transport to the destination country. Though, it is not guaranteed that every present MS
has enough suitable flight connections.
The outlined problems would be even strengthened in an enlarged EU. In particular the
number of long-distance relations (e.g. Estonia and Greece, or Cyprus and Ireland) will
increase. Thus, a D+2 objective covering all relations would require more direct flights in
87 Including Norway and Iceland.
Final Report
161
the enlarged EU than in the existing EU. But it is plausible to assume that between
adjoining AC (e.g. Czech Republic and Slovakia) and adjoining AC and present MS
(e.g. Czech Republic and Germany) a D+2 objective is less costly to implement than for
other relations. Nonetheless, necessary preconditions are compatible domestic transit
time performances and the already discussed investments in the OoEs as well as in the
organisation of the intra-Community cross-border network.
Even in case the creation of a D+2 cross-border mail network is technically feasible
strong cost effects are very likely. They are caused by increasing transport costs due to
reduced transport time windows. Obviously, the cost effect differs between the countryto-country relations. Furthermore, the (average) cost effect is even stronger in case of
low-volume mail flows. Against this background it appears very unlikely that uniform
tariffs at least for 20g letters will prevail on each relation.88
In case that domestic transit time performances would not be compatible with the crossborder objective additional cost effects on national level can be expected as well.
Option 2:
Upgrading D+5 (e.g. D+4 95%)
In 2002 97.5% of the cross-border mail volume between the present MS was delivered
within 4 days.89 The non-weighted average is 98.1% for D+5. It seems that the yearly
volume per bilateral mail flow does not have an impact on the D+5 performance as it
does in case of the D+3 objective, where mail consolidation is limited due to the time
restrictions. Comparable observations with respect to the ACs are not possible due to a
lack of reliable and comparable performance figures. According to the UNEX Lite
results 87.9% of the considered mail has been delivered within 4 days in the AC.90
In contrast to an upgrading of D+3 logistical problems would play a minor role in the
case of upgrading the D+5 objective. Organisational problems with regard to the
interfaces between USPs as well as organisational problems within the OoEs and
related shortcomings in the domestic postal network would be the main factors which
may restrict the implementation of a D+4 objective. Nonetheless, the feasibility of D+4
depends on the objective level (share of mail items which should be delivered in D+4).
Depending on the status of development of the national postal networks as well as the
respective office of exchanges an upgrading of the D+5 objective seems to be feasible
at least in the medium term. Presently identified problems can be considered as of
transitory nature.
Especially in the AC increasing costs may be expected in the beginning of the catch-up
process which is characterised by re-organising the main processes related to the
handling of cross-border mail. Compatibility problems could arise when the
88 Currently, uniform tariffs for cross-border letters is common practice between the present MS. The
tariff is usually oriented on the domestic postage of each of the origin countries.
89 IPC (UNEX FY2002).
90 IPC (UNEX Lite FY2002).
162

corresponding domestic transit time objectives, which ensure the reliability of postal
services, are not suitable.91
Of course, the level of the D+4 objective also plays a role when analysing the cost
effects. The higher the required share of cross-border mail volumes (e.g. 99% instead
of 97%)92 the higher the expected cost effects.
Option 3:
Adjusting D+3 (e.g. D+3 90%)
As already mentioned in the beginning of this section the overall average of intraCommunity cross-border mail is higher than 90% for D+3 since 1999. In fact, only one
third of the country-to-country relations had a performance below 90% in 2002.93 When
excluding relations from and to Greece and Spain the share declines from 33% to 16%.
The question about the expected cross-border transit time performances in 2005 was
only answered by 2 NRAs and 5 USPs. Whereas one NRA expects no change, the
second one expects a performance of D+2 80% and D+3 94%. Two USPs consider a
significant increase to at least D+3 90% as likely whereas the other three assume
stable or only slightly increased performances. Based on these statements it is not
possible to get a complete picture about the expectations on cross-border transit time
performance. With respect to expected objectives in five years all of the respondents
(four USPs) foresee a level of about 90% for D+3 and 97%/99% for D+5. These results
can only give some indication they are not representative for all MS.
The ACs are very uncertain about future cross-border transit time performances. This is
reflected by the fact that answers are not provided by most countries. This should be
evaluated against the background that they have just recently started to get at least a
first idea about their actual cross-border performance. Consequently, it is not probable
that they are really able to estimate reliable future performances yet.
The limiting factors to adjust D+3 are logistical problems between the present MS as
well as between the MS and AC in the enlarged EU. Additionally, organisational
problems restrict the improvement of cross-border transit time performance. An
adjusted D+3 objective would require increased efforts in the domestic postal networks
in order to guarantee compatibility between the domestic and the cross-border mail
requirements.
91 See section 4.1.3.

92 An objective of 100% is not seen as feasible. It is very unlikely to attain a performance of 100% (in
2002 one relation was characterised by a 100% performance). Furthermore, it should be taken into
account that in fact real mail not test mail may be delayed because of reasons outside the control
of the operators (e.g. in case of badly addressed cross-border letters). Therefore, in the view of the
customers a performance of 100% is not really credible.
93 IPC (UNEX FY2002).
Final Report
163
Again, under the precondition that the respective USPs have the organisational and
financial freedom to conduct the restructuring process the outlined problems are of
temporary nature. Changes in the organisation of the interfaces as well as in the
national networks can be managed in the short or medium term. Depending on their
starting point this may effect the costs in some countries (e.g. in Spain or France). But
this is not necessarily the case. It highly depends on the relation between the domestic
and the cross-border mail flows in terms of their characteristics (see section 4.1.3).
Of course, the higher the cross-border objective level is set (e.g. 95% D+3) the more
probable are higher costs in an increasing number of countries. Furthermore,
compatibility problems between domestic and cross-border transit time objectives and
in particular performances become more likely. Assumed that an identical D+1
performance for domestic mail is a precondition to achieve an adjusted D+3 objective94,
in some MS (Spain, France, and Greece) as well as the AC (in particular Poland) its
implementation in the short run is not likely.
In case of increasing D+3 objectives (from D+3 87% to 90% or 95%) the adoption would
be more and more jeopardized because of compatibility problems with domestic transit
time performance. An improvement of the domestic transit time especially in large
countries may be related to significantly higher costs.
Option 4:
Adjusting D+5 (e.g. D+5 99%)
Currently the objective for D+5 is 97%. 98.8% of the intra-Community cross-border mail
volume is currently delivered within 5 working days. To increase the reliability of crossborder services adjusting the D+5 objective to e.g. 99% could be a possible opportunity.
About 40% of the relations currently achieve a performance of at least 99%, about 70%
one of at least 98%.
As already discussed at the beginning of this section mainly relations from or to Spain
or Greece failed to meet the current D+5 objective in 2002. It is highly probable that
these failures are mainly caused by problems in the domestic postal networks in both
countries (compatibility problems with the cross-border transit time objective on the
objective as well as on the performance level). Assuming the enforcement of
restructuring policies, these problems are to be considered as temporary. Logistical
problems between the countries with respect to the MSs and the ACs are less relevant
for the D+5 than for the D+3 or D+2 objective, since the additional two days give
sufficient time to consolidate the mail volumes.
Most of the ACs have to re-organise their national postal networks in order to achieve
more reliable postal services. It should be taken into account that it is in the USPs
interest to provide highly reliable postal services. The introduction of standardised and
94 E.g. a D+3 objective of 95% would require a D+1 performance of 95%.
164

independent measurements of domestic as well as cross-border transit time will

strengthen this process.
Similar to the upgrading option of D+5 there could be cost effects in the short run. But
they are not seen as persistent. In the AC increasing costs are mainly caused by
needed investments in the starting period. These investments are necessary and
independent on the level of the D+5 objective (compared with the current one).
Compatibility with the domestic transit time performance is highly probable in nearly all
MS (with exception of Greece).95
Conclusions
Four different options of adjusting or upgrading the cross-border transit time objectives
have been discussed. The relevant cost effects are identified. They are mainly caused
by transport and organisational costs directly related to the cross-border network
between the USPs of the present MS and the AC. Especially the transport costs
strongly depend on the available time windows set by the cross-border transit time
objectives. In case that suitable regular transport relations between countries
(especially scheduled flights) do not exist, means of transport would specifically have to
be chartered to transport the daily cross-border volumes. Therefore, the average costs
would be significantly higher than in case of using regular services.
Other very important cost effects are induced on a national level. They depend on the
interaction between the domestic postal networks and the cross-border network in order
to meet the cross-border transit time objective. The more demanding the new objectives
are the stronger would be the expected cost effects on the level of the USPs: the lower
the domestic performance in the starting period the stronger the cost effects of the
required restructuring. Thus, we expect that the AC USPs will face the strongest cost
effects. However, experience shows that re-organisation can combine increasing quality
of service with decreasing costs in environments with non-optimised service provision.
Cost savings would be highly probable in the long run because of an increase in
organisational efficiency.
The analysis of the four options and the derived economic consequences results in a
range of possible combinations of upgrades and adjustments which are illustrated in
Figure 4-9.
95 Spain achieved a D+3 performance of more than 90% in 2001. Moreover, the cross-border D+5
performance of relations from and to Spain is much better than the corresponding relations from and
to Greece. The D+5 performance of bilateral mail flows from and to Spain meets the current objective
in most cases.
165
Final Report
Figure 4-9:
Set of potential intra-Community cross-border transit time

objectives
Speed
Upgrading
(D+2)
Adjustment
(D+3)
85% D+3
97% D+5
Adjustment
(D+5)
Upgrading
(D+4)
Reliability
The points A to D reflect the change of one of the 2 objectives (either D+3 or D+5)
whereas the points E to H are examples for possible combinations of changes. Before
comparing the different potential combinations it should be noticed that the change of
the D+3 performance could influence the D+5 performance and vice versa. This
interrelationship is supported by the high correlation between D+3 and D+5
performances of intra-Community bilateral mail flows in 2002. The correlation coefficient
is 0.93. Thus, there is a strong linear relationship between both performances: the
higher the D+3 performance the higher is the D+5 performance. Moreover, it is
plausible to assume that even a change of the reliability objective (D+5) would have a
positive effect on the D+3 performance. This effect might be less strong than in case of
an adjusted D+3 objective. In conclusion this would imply that related cost effects for
combinations of changes in objectives (e.g. point F) would be lower than the sum of the
cost effects for adjusting D+3 and D+5 separately. Taken these interdependencies into
account the different combinations can be qualitatively compared with respect to the
level of cost effects.
Upgrading D+3 to D+2 (B, E, G): very strong cost effects in relation to the majority of
bilateral mail flows. The majority of bilateral mail flows within the existing as well as
the enlarged EU would be affected. Additional costs with respect to the adjusted (E)
or upgraded D+5 objective (G) are not expected. Figure 4-10 illustrates a
166

distribution of bilateral mail flows in relation to possible D+2 objectives derived from
IPC figures. The MS-curve presents the bilateral mail flows between the present
MS. Even though the data base is not complete we are confident that the presented
distribution gives a good indication of the actual situation. Furthermore, we inserted
an AC-curve that shows the bilateral mail flows between the AC as well as the AC
and the MS. Here, we want to stress, that in particular comparable information on
the actual cross-border performance of the AC is not existing. The results of UNEX
Lite only refer to 90 city-to-city relations. Cross-border transit time performances for
the remaining numerous relations are not available.
Figure 4-10:
Distribution of bilateral mail flows depending on cross-border transit

time performance in relation to a D+2 intra-Community crossborder objective
Number of
bilateral mail flows
AC
MS
0%
80%
85%
90%
95%
D+2
Adjusting D+3 (A, F, H): strong cost effects in relation to those bilateral mail flows
with ongoing low cross-border performance. The share of affected bilateral mail
flows is lower than in case of an upgrading (about one third of relations between the
present MS, and most probably the majority of relations from and to the AC). The
cost effects depend on the final level of the adjusted D+3 objective as illustrated in
Figure 4-11.
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Final Report
Figure 4-11:

time performance in relation to an adjusted D+3 intra-Community
cross-border objective
Number of
AC
MS
<50%
85%
90%
95%
D+3
It should be emphasised that mail flows between the AC as well as the AC and MS are
more likely to be affected by cost effects than intra-Community cross-border mail flows.
Upgrading D+5 to D+4 (D)
Compared to changes in the D+3 objective an upgrading of D+5 to D+4 is most

probably linked with lower cost effects. In general, countries with mainly low-performing
bilateral mail flows are affected. Again, we want to emphazise that due to missing
information about the actual D+4 performance in relation to each bilateral mail flow
Figure 4-12 only provides a rough indication about the actual distribution.
168

Figure 4-12:

time performance in relation to an upgraded D+5 intra-Community
Number of
AC
MS
90%
<50%
95%
100%
D+4
Adjusting D+5 (C): weak cost effects compared with the current situation.
Figure 4-13:

time performance in relation to an adjusted D+5 intra-Community
Number of
AC
MS
<80%
95%
97.5%
100%
D+5
Final Report
169
In case objectives would be associated with strong cost effects price effects are highly
probable. These price effects are asymmetric as far as they would be mainly caused by
differences in transport costs. In case that domestic postal networks are affected by
cross-border requirements these cost effects may even have an impact on prices for
domestic postal services. This situation is highly probable in case of the introduction of
a D+2 objective.
Average vs. bilateral mail flow-specific cross-border transit time objectives
The evaluation above is based on the current condition that the upgraded/adjusted
cross-border transit time objectives refer to the intra-Community cross-border transit
time (average transit time) and to each bilateral mail flow. If the second part of the
objectives was relaxed or even abolished the discussed cost effects would be
weakened.
As already mentioned the intra-Community cross-border transit time performance is
calculated as volume-weighted average. Therefore the overall performance strongly
depends on the distribution of cross-border mail volumes among the bilateral mail-flows.
Two cases should be distinguished in order to evaluate changes in the cost effects (see
Figure 4-14):
1st case: The cross-border mail volume is equally distributed among the
2nd case: A high share of cross-border mail volume is spread over a relatively
low number of bilateral mail flows (e.g. 80% of mail volume is spread over 20%
of bilateral mail flows)
According to the 2nd case an objective of e.g. D+2 80% would imply that at least 80% of
the bilateral mail flows would have to achieve this objective in order to guarantee an
overall average of D+2 80%. The more extreme the distribution of mail volumes among
the bilateral mail flows would be the less bilateral mail flows would be affected. Thus,
the cost effects would be weakened due to a lower number of affected bilateral mail
flows.
Additionally assuming that there is a strong positive correlation between cross-border
transit time performance and cross-border mail volumes /the higher the cross-border
mail volumes the higher the transit time performance) the cost effects would be even
lower (or vanish).
170

Figure 4-14:
Distribution of cross-border mail volumes related to bilateral mail

flows
Share of bilateral mail flows
100%
1. case
50%
2. case
0%
50%
100%
Share of intra-Community cross-border mail volumes
Summary
Against this background a differentiation between particular groups of bilateral mail

flows as well as transit time levels seems to be sensible. Thus, we differentiate between
at least four groups of relations:
1) Those bilateral mail flows (between present MSs/ACs as well as between MSs and
ACs) which currently achieve an adjusted/upgraded objectives.
2) Those bilateral mail flows which will probably achieve the adjusted/upgraded
objectives in the short run (about 2 years). These relations are mainly characterised
by an additional need for organisational agreements between the origin and the
destination USPs. The national postal networks should be well-organised and the
realised domestic transit time performance should be compatible with the respective
cross-border one.
3) Those bilateral mail flows which will probably achieve adjusted/upgraded objectives
in the medium term (about 5 years). Besides additional organisational agreements
between the USPs changes in the national postal networks are necessary in order
to achieve compatibility between the cross-border requirements and the domestic
ones.
Final Report
171
4) Those bilateral mail flows which will not able to achieve adjusted/upgraded
objectives even in the long run.
The number of bilateral mail flows in each of the four groups varies with the degree of
change (D+2 to D+3) and the scope of the objective definition (average vs. bilateral mail
flow-specifc cross-border transit time objectives).
Thus, in order to identify which bilateral mail flows should be attributed to which of the
four groups additional information is needed:
about the actual cross-border transit time performance in particular of bilateral mail
flows between the AC as well as AC and MS
about cross-border mail volumes of each bilateral mail flow and
the availability of suitable transport connections in particular within the enlarged EU.
The degree of economic integration and the strongly related logistical infrastructure
between MS and AC is an important condition for the AC in order to at least achieve the
current cross-border objectives or even to perform better. Due to these processes the
situation could be quite different in some years. Therefore a review of the situation
should be carried out at a later stage.
4.1.2.2 Domestic postal services

Harmonisation of D+1 transit time objectives in the

Community
In order to analyse the economic feasibility of harmonising the D+1 transit time
objective for domestic postal services it is necessary to understand the background and
reasons of the observed variations. The subsequent variance analysis focuses on this
subject.
Variance analysis
Objectives and performances regarding domestic postal services have been presented
in chapter 3. In contrast to the cross-border transit time objectives which are mostly
aligned on the Postal Directive minimum requirements, the domestic transit time
objectives and performances are not specified on EU level and thereby strongly vary
between the MS. This variation concerns the number of covered postal services subject
to QoS regulation as well as the objective and performance levels per service.
Furthermore, the lack of harmonised measurement methods on national level reduces
the comparability between the performance figures.
172

What are the main drivers for the differences observed within the European
Community? When the Postal Directive came into force and the first transit time
objectives were introduced there were a couple of MS who already practiced QoS
regulation for some time. Portugal and Sweden are the countries with the longest
tradition within the European Community. In Sweden the implementation of the transit
time objective and the full liberalisation of the Swedish postal market started in the
same year.
Table 4-4:
Implementation year of regulatory transit time objectives for domestic

postal services in the EU (including EEA countries Norway and Iceland in
parentheses)
Implementation Year
Country
1993
PT 1, SE
1995
DK, FR
1997
BE (NO)
1999
DE, ES
2000
IT
2001
EL 2, LU, NL 2, UK
2002
IE, SF
2003
(IS)
2004
AT
1. The first QoS objectives were set in 1995 as the first QoS agreement between the USP and the NRA was signed.
2. In Greece and Netherlands the implementation year of the necessary legislation was 2000, but the objectives came
into force one year later in 2001.
In the majority of MS the objectives were set after the Postal Directive was adopted in
1998. In Austria the objective is already set but will not come into force before 2004. In
most MS transit time was measured by the USPs before implementing regulatory transit
time objectives.96 Figure 4-15 illustrates the development of measurement and the
setting of regulatory objective. Royal Mail (UK) has a long tradition in measuring transit
time on a very disaggregated level (postal code areas) but did not provide any
performance figures before 2000.97
96 This does not mean that the other USPs have not monitored their transit time. It is also possible that
the transit time was internally measured but the performance was not published.
97 Royal Mail usually publishes the results in their annual report.
173
Final Report
Figure 4-15:
Regulatory objectives (priority mail) and published performance in

the European Community since 199898
+ EL
2002
+ IE, SF
no change to 2000
Year
2001
+ EL, LU, NL, UK
+ IT
2000
+ IT
no change to 1998
1999
+ DE, ES
BE, DK, FR, PT, SE, DE,
ES, LU, NL, UK, IE, SF
1998
BE, DK, FR, PT, SE
10
12
14
16
Number of MS
Target
Performance stated
Apart from Spain (D+3 90%) all MS have set regulatory D+1 transit time objectives.
They range from 80% D+1 in Germany to 97% D+1 in Denmark. Since regulatory
objectives have been set, variations between performances and objectives can be
monitored. This is outlined in the following figure which shows the performance with the
objective level implemented in the respective MS. Additionally, this figure provides the
basis for a comparative analysis of the performance. Interpreting the results of this
comparison the shortcoming due to problems related to the comparability of the figures
has to be born in mind.
In Figure 4-16 Austria and Spain are excluded due to the absence of D+1 objectives.
The allocation of countries in the lower triangle indicate under-performance whereas
countries lying in the upper triangle indicate an over-performance. Due to the outlier
position of Greece two figures are presented: with and without EL.
98 The evaluation is based on the outcome of the survey. It is therefore possible that more than the cited
USPs measured transit time before 1998.
174

Figure 4-16:
Deviations from regulatory transit time objectives (priority mail) in

2002 (with and without EL)
100
Transit time performance in %
LU
PT NLSF DK
UK
IE
SE
DE
95
90
85
NO
IT
BE
80
FR
75
70
65
60
55
50
EL
45
45
50
55
60
65
70
75
80
85
90
95
100
Transit time objective in %
Transit time performance in %
100
SE
DE
95
PT
LU
SF
NL
DK
UK
IE
90
NO
85
IT
BE
80
FR
75
75
80
85
90
Transit time objective in %
Note:
In case of France the objective and the performance are for 2001.
Excluded countries: ES (no D+1 service), AT (no objective in 2002)
95
100
Final Report
175
The transit time of the Greek USP is measured by an independent organisation on

behalf of the NRA since 2002. The performance (48%) is very low compared to the
objective of 77%.99 In Austria a domestic D+1 transit time objective is set on 95%
getting into force in 2004. In 2002, the Austrian USP published a performance of about
80%. Thus, it seems that the regulatory objective will require a lot of efforts from the
sterreichische Post AG in the following years.
In general, the transit time of single-piece 1st class items is measured. But in some
cases the measurement additionally includes bulk mail (Figure 4-17). Depending on the
mail stream characteristics (especially in terms of destination) the transit time
performance of single-piece and bulk mail can strongly vary.
The Irish example illustrates this. The Irish USP stated a transit time performance of
90% for 2002. The method covers both single piece and bulk mail items. Under
responsibility of ComReg, the Irish NRA, single-piece transit time performance has
been measured. The results for the first quarter of 2003 were recently published.100
The performance of 73% is surprisingly low compared to the one announced by An
Post. ComReg stated that the figures could be compatible, taking account of different
mail flow characteristics and the high weight of bulk mail involved in An Posts
measurement. The main difference between the mail streams is that a high share of
bulk mail is only delivered in the area of Dublin whereas single-piece items are widely
delivered throughout Ireland. Finally, the sorting centre serving Dublin is wellestablished in contrast to the other sorting centres. Furthermore, the area covered by
each sorting centre and the associated infrastructure for transportation strongly varies,
which additionally strengthens differences in the transit time.
The Irish example raises the question whether or not an overestimation of the domestic
transit time performance can be transfered to the other countries (Sweden, Luxemburg,
Denmark, and Netherlands) which also do not differentiate between single piece and
bulk mail. Anyhow, it should be taken into account that the Irish example is very much
caused by country specific factors. Thus, additional information about differences in the
mail flow characteristics would be necessary to identify the potential degree of over- or
even under-estimation.
99 An independent institution measures the domestic transit time on behalf of ELTA. ELTA does not
publish the results. Anyway, the results are similar as stated by ELTA. In 2003 the regulatory objective
is 82%.
100 ComReg (2003) An Posts Quality of Service: Domestic single piece mail, Document No. 03/58
176

Figure 4-17:
Measurement method (single piece and / or bulk mail)
DK, IE, IS, LU,

NL, SE
Single piece and bulk
BE, DE, EL, ES,

FR, IT, NO, PT,
SF, UK
Single piece
10
Table 4-5 illustrates the D+1 over- or under-performance in relation to the regulatory
objectives in the present MS since 1998.
Table 4-5:
Under- () and over-performance () vs. regulatory objectives

1998-2002 (1st class mail)
1998
1999
2000
2001
2002
BE
DE
DK
EL
ES (D+3)
FR
n.a.
n.a.
IE
LU
IT
NL
PT
SE
SF
UK
Final Report
177
The Belgium, Danish and the French USPs face negative deviations from their
objectives. Furthermore, these USPs missed the regulatory transit time objectives every
year since 1998. Whereas the Danish USP faces the highest objective in the EU (97%
D+1) the French objective is relatively low (D+1 83% in 2001). With exception of
Luxembourg none of the MS have ever achieved a 97% D+1 performance so far.
In cases of failing transit times logistical and organisational problems are mentioned by
the stakeholders involved (USP, NRA). Both the Danish USP and NRA stated that the
transit time objective is not feasible in their view. In UK, industrial relations problems
(strikes) additionally influence the performance in a negative way. The Irish USP
additionally mentioned capacity restrictions during peak times (e.g. Christmas time)
which may result in under-performing transit times. Moreover, the Irish as well as the
Greek USP face strong problems to hire additional personnel (administrative barriers
are the reason in Greece while the economic situation linked with a shortage of work
force causes this problem in Ireland).
In Germany and Sweden the USPs are strongly outperforming. Compared with the
relatively low objectives of 80% and 85% respectively this is not really surprising. In
both MS the restructuring of the postal network is finished since more than 4 years and
the fine-tuning is ongoing. Therefore the starting problems associated with the reorganisation of processes are mostly solved.
Transit time performance and influencing factors
As already outlined above, the actual transit time performance strongly varies between
the MS. In the following paragraphs we want to analyse the drivers for the observed
diversity. In order to assess the drivers we will investigate on several issues that could
be considered to have an impact on transit time performance.
(1) Level of transit time objective
The setting of regulatory objectives may influence the level of performance, but the data
does not clearly support this view. Indeed, in most cases the USPs comply with their
obligations. The high level area Denmark is an exception but a decrease in the
objective is considered by the NRA (and expected by the USP). In France, Greece,
Italy, and UK the objectives may be defined in order to set additional incentives for
improving the transit time.
In Sweden and Germany where objectives are set at a relatively low level (80 and 85%
respectively) NRAs do not aim at setting incentives to improve the transit time. In the
Swedish case the regulator is of the opinion that a high objective level may induce
additional universal service costs. In their view minimum requirements are sufficient. In
Germany the definition of transit time has had an impact on the level of the D+1
objective. According to the German regulator QoS has to reflect the view of the postal
178

customer. Such a QoS regulation implies that the measurement method has to be
oriented towards transit time as experienced by the sender and receiver of mail items.
Based on an assumed collection time of 5 pm101 the performance measured by the
German regulator is about 87% for 2002. Using a collection time of 6 pm the
performance reduces to 83 %.102
(2) Exogenous country-specific factors and mail volume
Exogenous factors like the size of a country or the degree of urbanisation may
additionally influence the ability to achieve a high transit time performance. The demand
of postal services itself plays an important role especially with regard to the costs of
postal service provision. With increasing mail volumes average costs induced by the
postal network decrease. Providing high quality postal services at affordable prices is
therefore more probable by means of high mail volumes and therefore relatively low
average costs. The transit time performance itself may provide indications about the
postal network organisation. Given all other factors an increase in transit time may be
the result of optimising the organisation and management of a postal network.
The MS as well as the covered EEA states (Norway and Iceland) are characterised by
considerable differences in size and population characteristics. Additional geographical
characteristics like the topography of a country and the related accessibility of areas let
become transit time even more crucial. The number of exceptions from daily delivery
approved by the regulatory authorities gives a first insight into related problems. Greece
for example is characterised by a high number of small, but poorly populated islands
without daily ferry connections as well as mountain areas difficult to access. Due to
these circumstances, Greece excludes 7% of the delivery routes from daily delivery.103
In the other MS the exclusion of routes from daily delivery plays a rather minor or even
no role. In Sweden for example, less than 1.000 inhabitants are excluded from daily
delivery.
Beyond the geographical and demographic conditions in the country the number of
domestic postal items per capita is also included in the analysis.104 This variable
represents the current demand for USPs postal services and provides indications about
their average costs (i.e. cost per postal item). The number of postal items per capita
strongly varies between the countries. In the EU, Greece is the one with the lowest
101 According to the German postal law (here PUDLV) the collection time of street letter boxes has to be
oriented on the needs of business life.
102 RegTP, Annual Report 2002
103 According to ELTA this corresponds to less than 1% of mail volume.
104 The best indicator would be the number of postal items per delivery point. Depending on the structure
of buildings and types of delivery (e.g. at the front door, or at the flat door in an apartment buildings)
the number of delivery points varies between the countries. Usually the number of delivery points is
significantly lower than the number of households and businesses. The variable letters per head is a
very rough indicator but positively correlated with the number of items per delivery point.
Final Report
179
number of items (less than 50) whereas Sweden accounts more than 600 items per
capita.105
With respect to these conditions the following interrelations between the exogenous
factors and the domestic transit time performance will be evaluated in more detail:
The transit time could be negatively related to the size of the country. This effect
may be strengthened by a low degree of urbanisation, and low population.
The transit time could be positively related to the degree of urbanisation. This
effect may be weakened in case of large countries. In case of a relatively
centralised country meaning that one or two dominant cities attract a high share
of mail the counter-effect of the country size may be weaker than in case of a
country with a high number of important cities distributed all over the country.
Examples for a country with one main centre are France (Paris), Ireland
(Dublin), and Greece (Athens) whereas Germany is a country with a high
number of important cities (e.g. Berlin in the North-East, Frankfurt in the West
and Munich in the South).
The transit time could be positively related to the population density. This impact
is strengthened in case of a high degree of urbanisation and small countries.
Within this study it is not possible to simultaneously control each of the influencing
factors. More data would be needed for such an analysis. Therefore, we will elaborate
on the above enumerated inter-relations in a more descriptive manner. Thereby, we
want to emphasise that the underlying measurement methods vary from country to
country. Therefore, the country-specific performances are not necessarily comparable
in detail.
Bearing in mind these potential shortcomings, the subsequent figures do not allow for
generalisation but may provide some indication about the interdependencies between
population density, country size, degree of urbanisation, and domestic transit time
performance.
Hypothesis 1:
The transit time is positively related to the population density.
The subsequent figure presents the distribution of countries in relation to transit time
performance and population density. Besides the EU MS, Norway and Iceland are also
included. The Austrian and the Spanish transit time performance stem from public
sources.106 The figure is presented twice: Once with and once without Greece.
105 The USPs of the AC have significantly lower mail volumes per capita. The range goes from 12 (LV) to
185 (SI) in 2001.
106 Annual report of Correos (2001) and a press notice of the Austrian USP (October 2002).
180

Figure 4-18:
100%
Interrelation between transit time performance and population

density (with and without EL)
SF
DK
SE
IE
D+1 transit time performance
IS
85%
LU
DE
NL
UK
PT
NO
IT
BE
AT
FR
ES
70%
55%
EL
40%
0
200
400
Inhabitants per square km

100%
SF
LU
SE
DE
DK
PT
NL
UK
IE
IS
NO
85%
IT
BE
AT
FR
ES
70%
0
200
Source: Survey results, UPU (population, country size)

Note:
France, Spain 2001 transit time results
400
Final Report
181
According to the hypothesis transit time performance should increase with population
density. Looking at the distribution the expected interrelation can not clearly be
identified. The correlation coefficient is rather low (0.05). Therefore a linear relation
between the two variables is not identified. Nonetheless, Germany, Netherlands and UK
countries with a relatively high population density are characterised by a high transit
time performance. Belgium seems to be an outlier with respect to population density.
On the other hand Spain, France, and in particular Greece as countries with a relatively
low population density are also characterised by a relatively low performance.
In contrast to the expected outcome, countries like Sweden and Finland, both with very
low population density, achieve a very high transit time performance. Even comparing
countries with similar population density like Austria and Portugal the transit time is
rather different. Therefore, the population density seems to be a less important
influencing factor.
Hypothesis 2: The transit time is positively related to the degree of urbanisation.
A high degree of urbanisation means that a high share of the population lives within
cities.
182

Figure 4-19:
Interrelations between transit time performance, population density,

and degree of urbanisation (with and without EL)
100%
SF
PT
DK
IE
DE
SE
LU
NL
UK
IS
NO
85%
IT
BE
AT
FR
ES
70%
55%
EL
40%
50%
75%
100%
Degree of urbanisation
100%
SE DE
SF
DK
PT
NL
LU
UK
IE
85%
IS
NO
IT
BE
AT
FR
ES
70%
50%
75%
Source: Survey results, UN (degree of urbanisation)

Note:
France, Spain 2001 transit time performance
100%
Final Report
183
Again it seems that a linear relationship can not be identified between the degree of
urbanisation and the transit time performance. Portugal and Finland are really outliers
with respect to the hypothesis. The position of the Irish USP is determined by the
statements of An Post. Applying the performance published by the Irish regulator the
picture is slightly changed. Now, Ireland would be in the lower left section which would
correspond with the hypothesis. Sweden, one outlier in Figure 4-18, is now in the
expected section. Therefore, it appears that the degree of urbanisation may reduce the
negative impact of a low population density. Such an interrelationship could be
explained by the fact that a high degree of urbanisation is associated with a relatively
high concentration of mail flows (within the urban area), which is of course
facilitating a good transit time performance. Disregarding countries with a degree of
urbanisation lower than 75% again France, Spain, and in particular Greece are lowperforming countries with a relatively low degree of urbanisation compared to countries
in the upper right section. Even comparing countries with similar degree of urbanisation
like France and Norway, Austria and Sweden, or Italy and Portugal we observe that the
transit time is rather different.
In conclusion, a positive impact of the degree of urbanisation on transit time
performance can not be ruled out by the data.
Hypothesis 3: The transit time is positively related to the population density. This
interrelationship is strengthened by a high degree of urbanisation, especially in
small countries.
In Figure 4-20 the interrelationship between transit time performance, population

density and degree of urbanisation is illustrated for all EU MS as well as Norway and
Iceland.
184

Figure 4-20:
The interrelationship of D+1 transit time performance, population

density and degree of urbanisation
100%
BE (82.7%)
IS (87.4%)
LU (97.2%)
NL (95.6%)
UK (91.6%)
DE (95.4%)
DK (93.6%)
AT (80%)
SE (96.2%)
ES (74%, 2001)
75%
NO (86.7%)
IT (84%)
PT (93.1%)
IE (90%)
FR (76.8%, 2001)
EL (48%)
SF (95.8%)
50%
0
200.000
400.000
600.000
Country size (square km)

100%
BE (82.7%)
LU (97.2%)
IS (87.4%)
UK (91.6%)
DE (95.4%)
SE (96.2%)
NL (95.6%)
DK (93.6%)
AT (80%)
ES (74%)
75%
NO (86.7%)
FR (76.8%)
PT (93.1%)
IT (84%)
EL (48%)
SF (95.8%)
IE (90%)
50%
0
200
Source: Survey results, UPU (population, country size), UN (degree of urbanisation)

Note:
France, Spain 2001-transit time results
400
Final Report
185
Now the picture becomes much clearer: Countries with a low population density and a
low degree of urbanisation are more likely low-performing than countries with a high
population density and high degree of urbanisation (e.g. France). Although, some
noticeable outliers can be identified: Finland, Portugal and Ireland on the one hand and
Belgium on the other.
The example of Ireland has already been discussed above. Against the background of
low population density and degree of urbanisation the outcomes for Portugal and
Finland are rather surprising. Portugal is a country with a long tradition in quality
regulation. Furthermore, the Portuguese USP is of the opinion that a high transit time
performance helps to hold market shares in a competitive environment. Finland is
already fully liberalised and furthermore has faced the problem of loosing mail volumes
due to mail substitution over the past years. The degree of urbanisation is very low but it
can be assumed that most of the population lives in the southern area of Finland which
to a certain extent modifies the applied population density in the figure above.
However, Finlands performance is extremely high. This outcome clarifies that even in
case of negative geographical and demographical conditions efforts could be made to
overcome these restrictions, so that they are not determinant for the transit time.
Belgium is an outlier in the opposite direction. According to the geographical and
demographic conditions a higher transit time performance would be expected. With
82%, the performance is rather low. According to its own statements the ongoing
restructuring process is mainly responsible for the low transit time performance.
Therefore, it seems that the Belgian USP has a significant potential to improve its transit
time by reorganising its postal network.
Other countries with a potential for transit time improvements are Austria, France,
Greece and Spain. In all countries geographical and demographic factors should be
taken into account. Nonetheless, as the examples of Sweden, Finland or Germany
show, high transit time performances are possible even in large countries with low
population density or low degree of urbanisation. Moreover, this outcome stresses the
fact that there are additional important influencing factors besides the geographical or
demographical ones which have to be taken into account.107
107 E.g. cultural factors: one additional outcome of the comparison is that with exception of Portugal the
southern European countries have a lower transit time performance than the northern one (assuming
France is a southern country). Furthermore, cultural factors have an impact on customers needs on
national level. Also measurement methods may explain the unexpected distribution. For example, in
the Netherlands the applied measurement method is not finally approved by the Dutch regulator.
During the peak month December mail items collected by street letter boxes are not covered by the
measurement which may result in an overestimation of the transit time.
186

(3) Costs of the postal network and mail volume per capita
As already outlined geographical and demographic factors are exogenous conditions

from the perspective of cost-minimising USPs. They have an impact on the structure
and thus the costs of the postal network. One important outcome of the assessment
above is that even USPs with similar geographical and demographic conditions have
rather different transit time performances. What are the reasons for these differences?
This is a question which merits closer examination. In order to explain these
performance differences the relation between transit time performance and costs will be
evaluated in detail.
It is plausible to assume that the costs of a postal network achieving 95% D+1 are
higher than the costs of a postal network attaining 80% D+1 given identical exogenous
conditions. This cost difference is caused by necessary differences in the postal
networks structures. Figure 4-21 describes a possible network structure.
Figure 4-21:
Stylised structure of a national postal network
D+0
Collection
point
Time frame
clearing
Central
clearing
node
D+1
Sorting
facility
Hub
Sorting
facility
Time frame Time frame Time frame Time frame

inbound
inward
outward
long distance
transport
sorting
sorting
transport
Delivery
office
Time frame
outbound
transport
Recipient
Time frame
delivery
The transport of postal items from the collection point to the recipient needs time. In
order to manage the next-day delivery of postal items the time frames of each step in
the postal value chain have to be well aligned. Assumed a well-organised postal
network a D+1 95% objective would at least result in more sorting and transport
capacities compared to a 80% network. In large countries it could be necessary to use
(additional) aircrafts for long distance transport in order to achieve the more demanding
objective. These measures would result in higher costs. The average costs costs per
postal item depend on the mail volume transported within the postal network: the
higher the mail volume the lower the average costs given all other factors (postal
network and transit time).
Final Report
187
Therefore, it could be assumed that with increasing mail volumes the realisation of a
high quality postal network is more likely than in case of low mail volumes. This
hypothesis will be analysed in more detail in the next sections.
The following part of the analysis focuses on the influence of domestic mail volume per
capita on the transit time performance. The number of letters per capita ranges from
below 50 items in Greece up to more than 600 items in Sweden. In the ACs it ranges
from 12 letters per capita in Latvia up to about 180 in Slovenia.
Figure 4-22 presents the empirical inter-relationship between the D+1 transit time
performance and the mail volume per capita.
188

Figure 4-22:
The interrelationship between transit time performance and mail

volume per capita (with and without EL)
100%
LU
DE
PT
IE
85%
SF
DK
UK
NL
IS
IT
FR
SE
NO
BE
AT
ES
70%
55%
EL
40%
0
325
650
Domestic letters per capita
100%
LU
SF
DE
NL
SE
DK
PT
UK
IE
IS
NO
85%
IT
BE
AT
FR
ES
70%
0
325
Domestic letters per capita
Note:
France, Spain 2001-transit time results
650
Final Report
189
The trend line included in the figure has a positive slope, but the variance is very
high.108 Similar to the exogenous factors the impact is not as clear as expected.
Summary
Summarising the results, we can conclude that each of the factors analysed above have
an impact on the organisation of the postal network and thus on the transit time
performance of the USP. Therefore it can be assumed that
the larger the country
the lower the population density
the lower the degree of urbanisation
the lower the mail volume per head
the higher the requirements on the postal network in order to provide a D+1 service with
a high transit time performance. So far, each of these relationships have been assessed
merely based on a partial analysis. A simply structured QoS environment index
summarises these factors to one variable. The figure provides additional insight into the
country-specific feasibility to improve the domestic transit time.
For every country (AC, MS, as well as Norway and Iceland) information about domestic
letter per capita, country size, population density and degree of urbanisation is
available. The figures have been normalised to values between 0 and 1. Due to missing
additional information a simple average of the four figures have been calculated for
each country. That means that each variable has a weight of 25% in the index.
The index ranges from 0 to 1: The larger the index the better the conditions to provide a
D+1 postal service, i.e. high mail volumes per capita, small country, high degree of
urbanisation and high population density in relation to the other countries. Each country
is characterised by an individual mix of conditions, therefore values near to 0 or 1 are
not reached. Greece, Spain, France, Italy, Ireland, Portugal, and Finland are
characterised by relatively disadvantageous conditions for the provision of D+1
services, whereas Luxemburg, Belgium and Netherlands achieve relatively high index
levels. Therefore, in these countries it would be easier to implement a D+1 postal
network. Sweden, Germany, UK, Denmark, and Austria lay in the middle of the field.
In Figure 4-23 the index is related to the transit time performance. Nonetheless, the
transit times of the countries vary even if the conditions are similar. Finland for example
has an extraordinary transit time although the index indicates that the country-specific
conditions are very disadvantageous, whereas France (with comparable conditions as
Finland) is characterised by a considerably lower transit time.
108 The estimated coefficient for the slope is positive, but not significant on a 5%-level if Greece is
excluded (based on a simple regression analysis). Including Greece, the coefficient becomes
significantly positive.
190

Figure 4-23:
The interrelationship between the QoS environment index (based on

country size, population density, degree of urbanisation and domestic
mail volume per capita) and D+1 transit time performance in the EU
100%
SF
SE
PT
90%
DK
DE
UK
LU
NL
IE
IT
BE
AT
80%
FR
ES
60%
EL
40%
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
QoS environment index
It should be kept in mind that a high transit time performance is technically feasible in
every country, while the costs of a D+1 tailored postal network may vary substantially
depending on the country-specific conditions. As we do not have any country-specific
cost information we are not able to deduce the cost level of country-specific postal
service provision from the index level.109 A cost-based comparison of the MS is only
possible under the assumption of identical capital, labour and transport costs in every
MS. Actually, this assumption is not fulfilled within the EU and to a significantly lesser
degree within the enlarged EU.
A possible interpretation of the figures of Greece, Spain, France, Italy, Austria, and
Belgium could be that these countries would face cost effects if they improve their
transit times. At least in Austria and Belgium the conditions are not as disadvantageous
as in the other countries mentioned. Therefore, the relative cost effects might be weaker
109 Postal network costs are mainly influenced by capital costs (including buildings and machines),
wages, and transport costs. Most of these costs, especially the wages, can strongly vary between the
MS. Therefore, it is very difficult to get comparable cost figures.
191
Final Report
than in Greece, Spain, France or Italy. Only in case postal networks are insufficiently
under control (e.g. organisational problems) it might be possible that even under bad
conditions transit time improvements are possible without significant cost effects.
Assuming postal networks are well-organised, cost effects caused by transit time
improvements are very likely. These effects are stronger the lower the transit time in the
starting period. Against this background price adjustments are also very likely. Only in
case the majority of business customers and consumers strongly prefers a better transit
time performance and is willing to pay a higher price, investments in transit time
improvements can be justified.
The same QoS environment index is calculated for all countries MS, AC, as well as
Norway and Iceland in order to get an estimation about the efforts needed to
implement a D+1 postal network. In Figure 4-24 D+1 performances and the QoS
environment index including the AC are presented.
Figure 4-24:
The interrelationship between the QoS environment index and D+1

transit time performance in the MS, the AC as well as Norway and
Iceland
100%
SF
PL
SK
90%
EE
IE
LT
DE
PT
LU
SE
CZ
UK
DK
IS
NO
IT
BE
AT
80%
FR
ES
NL
MT
HU
60%
CY
EL
40%
0.2
0.3
0.4
0.5
0.6
QoS environment index
Note:
Slovenia and Latvia are not included due to missing performance figures.
Their indices are 0.332 (SI) and 0.283 (LV).
0.7
0.8
192

Most of the AC countries are relatively small so that a D+1 network can be implemented
relatively easy.110 On the other hand, low mail volumes may restrict quality
improvements. This is reflected by the fact that most of the AC have an index less than
0.4. Poland has the lowest index value of all countries. Against this background the
stated transit time performances especially of Poland, Estonia, and Lithuania are
surprisingly high. However, the Polish as well as the Estonian results appear to be not
well-founded. The transit time measurement of the Estonian USP is based on a sample
of 500 test letters which seems to be very low in order to get statistically reliable results.
The Polish USP has not provided any detailed information about its measurement
method. The structure of Polands postal network is very complex and characterised by
more sorting steps than e.g. the German one. This makes a high D+1 performance very
unlikely (perhaps with exception of mail within Warsaw). Furthermore, the recently
introduced D+1 service (2001) is characterised by very low volumes (about 15% of total
which corresponds to about 7 items per capita).
Assuming well-organised postal networks especially the AC will face relatively strong
cost effects in case of quality improvements mainly caused by low mail volumes per
capita. In case their postal networks are not well under control (e.g. organisational
problems) it might be possible that transit time improvements are possible without
significant cost effects (as a side effect of postal network re-organisation).
For these fast growing countries in terms of GDP a well-organised and reliable postal
network is a very important input to support their future economic development.
Potential demand effects as a result of strong economic growth and quality
improvements would make it easier to adapt their postal networks. Against this
background the rapid development of reliable postal networks is of public interest as
well.
110 They do not need flights for transport and the number of sorting centres would be very low (one or
two) if necessary at all (low mail volumes).
Final Report
193
Conclusion
In order to achieve a harmonised transit time performance significant cost effects are
very likely in at least three MS (France, Spain and Greece).
Depending on the level of harmonisation (e.g. 85% instead of 90%) the cost effects
could be reduced to an acceptable level for the concerned USPs (in particular for
France).
In the Czech and the Slovak Republic the performance is already higher than 90%. In
the other AC cost effects due to transit time improvement are very likely mainly due to
their low mail volumes.
As far as the low transit time performance results from organisational problems within
the national postal networks, the cost effects are not as strong as in case of welloptimised networks.
As far as significant cost effects are probable price effects have to be taken into
account. In such cases an implementation of a higher transit time performance requires
a sufficient willingness to pay on the part of business customers and in particular
consumers.
Introduction of regulatory transit time objectives for

other universal postal services than 1st class mail:
parcel services
The Postal Directive stresses that the MSs shall ensure that quality of service objectives
are set in relation to postal universal service in order to guarantee a postal service of
good quality. They shall particularly focus on transit times, regularity and reliability of
services.
So far, transit time objectives for 1st class or priority domestic and cross-border letters
have been addressed in this report. Based on the comparison in chapter 3, additional
opportunities have been derived with respect to the other postal universal services: 2nd
class letters, direct mail, newspapers, magazines and other publications as well as
parcel services. Furthermore, insured and registered items are covered by the universal
postal service according to the Postal Directive.
As described in chapter 3 the scope of universal service varies between the present MS
as well as the ACs. In particular, the delivery of newspapers and magazines sometimes
is not part of the universal service. Additionally, in Netherlands bulk mail is completely
excluded from the postal universal service.
Domestic parcel services are of special interest in the discussion about regulatory
transit time objectives. This is because of the observation that in half of the MS and AC,
regulatory transit time objectives are set and measurement takes place in nearly all
cases. The first issue under discussion is whether a transit time objective should be set
194

for universal service parcels in all MS. If objectives are economically feasible the
second issue would be how these objectives should be shaped (e.g. D+2 or D+3
objectives).
Should a transit time objective for parcel services be set in all MS?
In all MS parcel services are part of the universal service. In none of the MS parcels are
part of the reserved area for ages. Furthermore, the national and the cross-border
parcel and express markets are competitively structured. As a result of competition
parcel and express services are characterised by a large variety of different products.
Besides, there is a general tendency to customer-tailored parcel services e.g. for mail
ordering companies. The frontier between parcel and express services becomes less
visible with respect to service characteristics in most MS. This is for example reflected
in improved transit times and the use of track and trace technology even for standard
parcels in an increasing number of MS.
Consumers and small business customers potentially have access to parcel and
express services provided by other operators than the USP but at considerably higher
prices than large business customers. The price differences are partly driven by cost
differences. Express companies usually collect the items at the premises of the
senders. This type of collection is necessary because express companies do not have a
country-wide network of outlets. The cost of collection is basically determined by the
number of collection points and hardly by the number of collected items. The higher the
number of items is, the lower collections costs per item. Consumers and small business
customers usually send one or two parcels whereas large business customers send
hundreds of parcels per pick-up (e.g. a mail-ordering company). Therefore, the
collection cost per item is considerably lower for large business senders compared with
private or small business senders.
Consumers and small business customers are usually not willing to pay the price
offered by express service providers. Therefore, in most countries mainly the USP
delivers parcels on behalf of consumers/households and small business customers to
relatively low prices compared with the ones of competitors.
Two types of USPs have to be distinguished in order to assess whether transit time
objectives would be necessary from an economic point of view:
a USP successfully competing with other express and postal service provider
a USP who lost considerable market shares to competitors.
The first type of USP has a strong incentive to provide a high quality of service in order
to hold his customers. High quality means reliable and quick delivery of parcels as well
as the use of tracking and tracing technology. The tracking and tracing technology has
Final Report
195
been introduced by the express service providers in order to better monitor the in timedelivery of parcels.111 With the connection of internet services and tracking & tracing,
the sender and the recipient have even been able to virtually observe the transport
process of a parcel. Nowadays more and more USPs use this technology for standard
parcel services as well.
It is highly probable that these quality improvements resulting from competition and
more customer-orientation are of benefit to consumers and small business customers
as well (so-called spill-over effects). Why should a USP who has built up a high quality
parcel network exclude standard parcels sent by consumers and small business
customers? In our view it is not economically reasonable to have completely separate
networks for large business customers and consumers/small business customers. Only
differences in the type of collection are likely to prevail.
In order to send a parcel, the main access points for consumers and small business
customers are post offices or postal agencies. Additionally, in case a parcel can not be
delivered because of recipients absence, it is possible to collect the parcel in the post
office.112
In the last years there has been a tendency to reduce the number of post offices due to
cost reasons. Reducing the number of access points does not have any impact on
transit time in case it is measured from the viewpoint of the operator. But it has an
impact on quality of service from the viewpoint of the sender and the recipient.
Reducing the number of post offices would increase the average distance between the
sender and the access point. Consequently, he needs more time in order to send a
parcel. Thus, the USP transfers a part of the transport chain to the customer. In this
respect, access conditions, and thereby future QoS are seen as endangered, even in
postal markets where the USP has a strong position in parcel delivery.
The second type of USP is characterised by a small and even decreasing market share
because he lost large parts of the B2B and the B2C segments to competitors. In this
case the ability to provide a satisfying parcel service for customers who are not willing
or able to pay the high prices of other service providers could be considerably
weakened. Since this type of USP is not able to establish a high quality network, it is
highly probable that the above mentioned spill-over effects do not occur. In this case
QoS regulation could substitute this missing incentive.113
111 In case express companies have completely outsourced the delivery of parcels to sub-companies this
technology has made the monitoring of delivery easier.
112 In the Scandinavian countries it is even used to deliver parcels only in post offices.
113 In case that this situation is relevant for some present MS and AC it could be even asked if parcel
services as part of the universal services should be provided by the USP.
196

Conclusion
The requirement to introduce transit time objectives for parcel services in all MS
strongly depends on the national parcel market situation. In order to identify market
failure information is needed about the actual quality of service provided by the USP.
The quality aspect is at least two-fold. The first part corresponds to the network access.
This part is already regulated in the MS as it is an essential aspect of the universal
service obligation. The second part corresponds to the transit time and the reliability of
parcel delivery. Due to tracking and tracing the measurement of transit time becomes
more easy and less costly compared with the former situation. In case of low volumes
measurement could be a problem. It is not guaranteed that it is economically
reasonable to invest in a tracking & tracing technology in case of very low parcel
volumes. Against the background that the number of delivered parcels is relatively low
(between 0.2 and 7 parcels per capita) the measurement costs in these cases are
probably relatively high.
In case spill-over effects are significant (reflected by the transit time performance) a
regulatory transit time objective is not seen as necessary in our view. In case the quality
is not sufficient the setting of a regulatory transit time objective should be taken into
consideration.
Shape of a transit time objective for domestic parcel services
The high variety of offered parcel services makes it necessary to clearly define the
services for which objectives should be set (e.g. single piece universal service parcels
sent from post offices). Additionally, the QoS objective level should take account of the
costs of the service provision. The costs highly depend on the number of parcels
transported by the USP. In case of low volumes a separate parcel network would not be
cost-efficient. The parcels would be transported by using the letter mail network. Taken
into account that the transport costs of parcels are higher than of letters (due to size
and weight of the items) air transport would be very costly. Therefore the transit time
objectives should be oriented on the size of the country: the smaller the country the
more feasible brief transit times (e.g. D+1 or 2). This would also mean that the objective
should more be oriented on reliability than speed. Only in a situation where the senders
are willing to pay a higher price for speed the introduction of such an objective could be
considered.
4.1.3 Objective definition and compatibility on national and Community level

Cross-border transit time objectives covering the fastest standard category are set on
Community level. After analysing the objectives and performances of the Member
States it is necessary to assess whether the regulatory objectives or at least the
realised performances on MS-level are compatible with the Community cross-border
Final Report
197
transit time objectives. In case of a positive interrelationship between cross-border and

domestic transit time performance it could be argued that the implementation of
domestic transit time objectives is necessary in order to fulfil the objectives set for
cross-border services.
In this context the following questions should be considered:
What is the interrelation between domestic and cross-border transit time

performance?
Does the national objective setting policy influence the development of cross-border
transit time performance?
In nearly all Member States as well as in Iceland and Norway the cross-border transit
time objective set on Community level is implemented. In some countries the national
regulatory framework goes beyond the Directive and requires cross-border items (letter
and parcels) to reach the office of exchange within a specified number of days. Despite
this observation, an explicit direct linkage of the transit time objectives set for domestic
and cross-border services could hardly be identified.
According to the Postal Directive the MS shall ensure that the national transit time
objectives are compatible with those laid down for intra-Community cross-border
services.114 In the following paragraphs, we want to address this interrelationship in
order to derive answers to the above raised questions. On this basis we will evaluate
the opportunities of upgrading and adjusting cross-border objectives.
4.1.3.1 Interrelationship between domestic and current cross-border transit time

objectives
Technical interrelationship between domestic and cross-border transit time
From a technical point of view the transport of cross-border postal items should be
identical to the one for domestic postal items. In case of outgoing cross-border mail
these items are collected from street letter boxes and post offices and transported to the
office of exchange the delivery point in the country of origin. Because of the low
number of OoEs (at least one per country)115 the delivery should be very easy and
less time-consuming compared to the usual delivery.
114 Postal Directive, Article 17.

115 Assuming only one exchange point for cross-border mail is a simplified view. In fact, in case of
neighbour countries there is additionally the border traffic. Besides airports important harbours are
also possible locations for exchange offices.
198

Figure 4-25:
Origin
Destination
D+0/1
D+2/3
Transit
country
Hub
Collection
point
Outward
sorting
OoE Long distance transport OoE
Recipient
Inward
sorting
Time
Recipient
Incoming cross-border mail is treated like domestic mail using a sorting facility as
induction point. From the office of exchange in the country of destination the mail has to
be delivered to the recipients using the same elements of the postal value chain than
domestic mail items (Figure 4-26).
Figure 4-26:
Transport of incoming cross-border mail
Hub
Long distance
transport
Delivery
office
Inward Outbound
sorting transport
Recipient
Delivery
Time
Final Report
199
From the OoE the mail is transported to the inward sorting facility. Dependent on the
size of the country and the location of the OoE a long-distance transport between the
OoE and the sorting facility may be necessary. In order to avoid double transport costs
cross-border and domestic mail should be consolidated as early as possible (e.g. using
a national hub). Inward sorting usually takes place during the night until the early
morning. Therefore the cross-border items should arrive in the sorting facility in the
second half of the night at the latest. After inward sorting the mail is transported to the
delivery units. Postmen prepare the mail for their delivery route and finally deliver the
items to the recipients.
The description of the transport processes makes clear that the cross-border transit
time depends on the quality provided by the national postal networks. But how strong is
this dependency and to what extent is it reflected in the transit-time performance
figures? This are questions which merit closer examination.
Empirical interrelationship between domestic and cross-border transit time (D+3)
The following figure describes the empirical relation between incoming cross-border
transit time (D+3) and domestic transit time performance (D+1). The cross-border
transit time is calculated as non-weighted average of the country-specific bilateral mail
flows. Due to its extreme low domestic transit time performance Greece creates a bias
of the trend line. Therefore both outcomes are presented including and excluding
Greece.
200

Figure 4-27:
Interrelation between incoming cross-border and domestic transit

time performance (D+3 and D+1 respectively) in 2002 with and
without Greece
Domestic transit time performance (D+1)
100%
SF
PT
IE
IS
85%
LU SE
NL
DE
DK
UK
NO
IT
BE
AT
FR
ES
70%
55%
EL
40%
60%
80%
100%
Cross-border transit time performance (D+3, incoming)
100%
SF
LU
SE
DE
NL
DK
PT
UK
IE
IS
NO
85%
IT
BE
AT
FR
ES
70%
80%
90%
Cross-border transit time performance (D+3, incoming)
Source: Survey results, IPC (UNEX, FY2002), own calculations
100%
201
Final Report
Figure 4-28:
Interrelation between outgoing cross-border and domestic transit

time performance (D+3 and D+1 respectively) in 2002 (with and
without Greece)
100%
LU
SF
NL
PT
UK
IE
IS
85%
SE
DE
DK
NO
IT
BE
AT
FR
ES
70%
55%
EL
40%
80%
100%
Cross-border transit time performance (D+3, outgoing)
100%
SE
DE
SF
NL
DK
PT
UK
IE
IS
85%
NO
IT
BE
AT
FR
ES
70%
85%
93%
Cross-border transit time performance (D+3, outgoing)
Source: Survey results, IPC (UNEX, FY2002), own calculations
100%
202

The correlation coefficient between the MS-related average of incoming cross-border

and domestic transit times is 0.84 meaning that there seems to be a positive, linear
relationship between them. But excluding Greece the coefficient decreases to 0.5
(Figure 4-27). The inter-relationship between outgoing cross-border and domestic
transit times is considerably weaker: 0.28 with Greece and about 0 without Greece
(Figure 4-28). It appears that the domestic transit time performance is more important
for the incoming cross-border transit time performance than for the outgoing one.
It has to be considered that the domestic and the cross-border transit time performance
are difficult to set into relation. This is, because the domestic performance not only of
one but of both countries involved (origin and destination) has an impact on the crossborder transit time performance. Therefore, it is more useful to measure the transit time
performance of sub-elements of the concerned route. This would require to separately
measure the transit time between the induction point of international mail and the
delivery point116 as well as the transit time between the collection point and the
exchange point. Such a procedure would provide figures which are more useful to relate
them to cross-border figures.
Comparability of domestic and incoming cross-border transit time performances
Before starting with the assessment it should be kept in mind that the comparability of
transit times strongly depends on the applied measurement methods. The standard
EN13850 is still not implemented in every country as well as on Community level
(cross-border transit time). Thus, the applied methods are heterogeneous among the
countries, and even often different between domestic and cross-border services within
the individual countries.
Moreover, concerning the distribution in the destination country, differences in the mail
flow structure between domestic and cross-border mail may increase the difficulty of
comparing these performance figures. The domestic transit time performance is an
average value covering relations within cities, between urban and rural areas and
between different rural areas. The transit time is usually calculated as weighted average
based on the mail flow-specific volumes. In contrast, the structure of the incoming
cross-border items has a different distribution: The origin of the mail is not spread
around the country but is concentrated in the OoE where all international mail enters the
national postal network.
Although, we can assume that the cross-border mail is handled together with domestic
mail, there are likely to be differences in transit time performance due to the different
mail flow structures. This average transit time performance of cross-border mail may be
higher or lower than the domestic transit time performance, depending on the national
conditions. The fact that the OoE usually are located in logistically well-developed
cities,117 may support the hypothesis that the performance of incoming cross-border
116 This measurement is already being applied according to the REIMS II agreement.
117 Perhaps with exception of Athens, which faces logistical problems due to fast growth.
Final Report
203
items (measured from OoE to recipient) is systematically better than the one of
domestic priority mail.118 But depending on the structure of mail flows, we can also
argue for the opposite. In order to derive a final answer about the interrelation between
domestic and cross-border transit time an analysis of the disaggregated domestic and
cross-border mail flows would be necessary. Due to lack of available data this has not
been possible.
Case studies: countries with low domestic D+1 transit time performance
Obviously, problems of the postal networks of the country of origin or destination, and
thereby the transit time level in the respective country influences the transit time of
cross-border items between both countries. Also, separation of the transport networks
of domestic or cross-border items is neither economically reasonable nor even
necessary. Therefore, setting incentives to improve domestic transit time in general has
a positive impact on cross-border transit time. Additionally it is likely that setting
incentives on the supra-national level e.g. Community cross-border objectives or
penalties in terms of reduced terminal dues as already implemented by the REIMS IIagreement may have a positive impact on domestic transit time, too. Due to the nonseparability of domestic and cross-border networks the causality is not one-way only.
Looking at Spain, the only country without a domestic D+1 objective, the cross-border
transit time performance is surprisingly high but still fails to meet the cross-border
objective. Furthermore, since 2000 the average cross-border transit time performance
of the Spanish USP has declined from 86.7% to 82.8%. In order to assess potential
reasons for the decline119 the development of the country-to-country performance over
time is of interest.
118 In France for example most of the cross-border incoming mail is delivered in Paris where the OoE is
located. Therefore it can be assumed that in France the transit time of incoming cross-border mail is
systematically lower than the transit time of domestic mail.
119 The Spanish operator states that air flights to peripheral countries would be the main reason.
204

Figure 4-29:
Change in D+3 cross-border transit time performance 1998-2002

with respect to outgoing and incoming cross-border mail (Spain)
Outgoing cross-border mail
Relative change of transit time performance
120%
110%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
AT
BE
DE
DK
EL
FR
IE
IS
1998-2000
IT
LU
NL
NO
PT
SE
SF
UK
NO
PT
SE
SF
UK
2000-2002
Incoming cross-border mail
90%
75%
60%
45%
30%
15%
0%
AT
BE
DE
DK
EL
FR
IE
IS
IT
LU
NL
-15%
1998-2000
2000-2002
Source: IPC (UNEX FY1998, 2000, 2002) and own calculations
Final Report
205
As described in chapter 3.2.3.1.1 the cross-border transit time of most bilateral mail
flows significantly improved until 2000. This is also reflected by the development of the
cross-border transit time development with respect to Spanish mail flows. The D+3
performance of outgoing cross-border mail (Spain = country of origin) increased in
particular from 1998 to 2000. In the second time period from 2000 to 2002 the growth
rates are still positive but significantly lower.
With regard to incoming cross-border mail (Spain = country of destination) the
performance has considerably increased for most relations from 1998 to 2000 as well.
In the period from 2000 to 2002 the performance has decreased in relation to the
majority of the EU countries especially concerning relations with UK (-11%) and
Luxemburg (nearly -10%). Exceptions are the bilateral mail flows to Iceland and
Greece, which can be assumed to be relatively unimportant in terms of volume.
In contrast to Spain the Greek USP provides a D+1 service. But this service is
characterised by very low domestic transit time despite of an existing D+1 objective of
77%. Figure 4-30 outlines the development of the cross-border transit time with respect
to outgoing and incoming mail flows from / to Greece.
Whereas the performance of outgoing cross-border mail is characterised by an ongoing
improvement from 1998 to 2002, the picture of the incoming cross-border transit time
development is mixed. During 1998-2000 the performance has increased in the majority
of the bilateral mail flows with exception of cross-border mail to Luxembourg,
Netherlands, UK, Austria, Germany and Iceland. From 2000 to 2002 the improvement
was characterised by even higher growth rates. Even against the background of very
low values at the start, the growth rates are as impressive as the Spanish ones from
1998 to 2000. ELTA, the Greek USP, is now trying hard to achieve the cross-border
transit time objectives. Despite these efforts, the Greek USP still has not been able to
achieve neither the D+3 nor the D+5 objectives especially for incoming cross-border
mail so far.
206

Figure 4-30:
Change in cross-border transit time performance 1998-2002 with

respect to outgoing and incoming cross-border mail (Greece)
Outgoing cross-border mail
160%
140%
120%
100%
80%
60%
40%
20%
0%
-20%
AT
BE
DE
DK
EL
FR
IE
IS
1998-2000
IT
LU
NL
NO
PT
SE
SF
UK
NO
PT
SE
SF
UK
2000-2002
Incoming cross-border mail
90%
70%
50%
30%
10%
-10%
AT
BE
DE
DK
EL
FR
IE
IS
IT
LU
NL
-30%
1998-2000
2000-2002
Source: IPC (UNEX FY1998, 2000, 2002) and own calculations
Final Report
207
Comparing the developments in Spain and Greece it seems that the main
improvements were achieved during the first period (1998-2000) in Spain while main
improvements were achieved during the second period (2000-2002) in Greece.
Nonetheless, the Spanish experience may imply that a low domestic transit time
performance still limits the cross-border transit time development.
Surprisingly, France and Belgium achieve the cross-border transit time objectives on
average as well as for the majority of their bilateral mail flows despite the observation
that their domestic transit time performances are relatively low. That might be explained
by the fact that in contrast to Greece and Spain they are central European countries
which has a positive impact on the transport time of bilateral flows to the countries of
destination resp. of origin. Significant differences in the cross-border and domestic mail
flow structures may additionally explain this outcome as already outlined above. Thus, it
appears that the low domestic performance in France and Belgium has not hampered
their cross-border performance.
Empirical interrelationship between domestic and D+5 cross-border transit time
performance
The compatibility between Community and national objectives shall also be analysed
with respect to the D+5 cross-border transit-time objective. In three MS (DK, NL, and
SF) no additional objectives are set beyond a D+1 objective in order to guarantee
reliable domestic postal services. The other MS have set objectives with regard to the
tail of transit time but they strongly vary.120 Five MS have set D+2 objectives, whereas
five other MS have set D+3 objectives (93-99.5%) and 2 MS other objectives (D+4
99.9% in UK or D+5 98% in Spain).121
It is very likely that a well-performing domestic D+1 transit time positively influence the
subsequent D+2 or D+3 performance. The same relation exists between the crossborder D+3 and D+5 transit time performance. The correlation coefficient between D+3
and D+5 with respect to the average cross-border transit time performance (incoming)
is nearly 1.122 Between the domestic and the cross-border transit time performance is
also a positive relationship even if problems in the comparability due to different
measurement methods and mail flow characteristics weaken the empirical outcome.
Thus, there is a link between the D+2/3 domestic and the D+5 cross-border transit time
performance. Limitations on the comparability of the transit time figures hamper to
assess the strength of this relationship.
120 See section 3.2.2.1.1, Table 3-4.

121 Portugal has set D+10 99.84%. In our view this is not appropriate to control for reliability.
122 Calculations based on IPC (UNEX, FY2002).
208

Figure 4-31:
Incoming cross-border transit time (D+5) performances average

figures (2002)
100%
99%
98%
97%
96%
95%
94%
93%
92%
EL
IS
ES
IT
AT
PT
IE
NL
NO
LU
SF
FR
UK
BE
SE
DK
DE
In Finland, Denmark and The Netherlands where no domestic D+2 or D+3 objectives
have been set for priority mail, the cross-border D+5 performance is on a relatively high
level. This means that even without a corresponding objective on domestic level the
reliability of cross-border services is assured wherever the performance is already good
in terms of speed both at cross-border level (D+3) and domestic level (D+1).
4.1.3.2 Opportunities to adjust or upgrade cross-border transit time objectives

The performance figures presented above show a strong conformity with the current
cross-border objectives set in the Directive. The outcome might be changed in case of
the implementation of more demanding cross-border objectives (e.g. D+3 90% or even
more with a D+2 objective). With more demanding objectives the alignment between
the domestic and the cross-border network would have to be improved. The degree of
alignment depends on the extent of the change in the objective. Therefore, we
differentiate between the adjusting and the upgrading of the objective in the following.
209
Final Report
Adjusting of the D+3 cross-border transit time objective (e.g. 90% D+3)
As outlined in Figure 4-26 page 198, outgoing cross-border mail has to be transported
from the collection points to the outward sorting facility and finally to the OoE whereas
incoming cross-border mail has to be transported from the OoE to the inward sorting
facilities, delivery units and finally to the recipients. In order to achieve 90% D+3 it
would be necessary to transport a higher share of cross-border mail collected at D+0 to
the OoE compared with the starting situation.
Figure 4-32 presents a simple example to illustrate this situation referring to incoming
cross-border mail. The large circle represents a country. The OoE is located in an area
where 50% of the incoming cross-border mail is delivered (within one day). Additional
30% of the cross-border mail is delivered in areas also achieving D+1, while the
remaining 20% is distributed among recipients in the rest of the country not achieving
next day delivery.
Figure 4-32:
Example for the distribution of cross-border mail in the country of

destination
D+2-area
D+1-areas
50% OoE
20%
30%
This implies that 80% of cross-border mail would be delivered the next day and 20% in
two days measured from its arrival at the OoE. Furthermore, we assume that 100% of
cross-border mail arrives at the OoE in time (e.g. late evening of D+2). Under these
conditions 80% of the cross-border mail could be delivered the next day (D+3). In order
to deliver 90% of the mail next day, the transport network to the rest of the country
(indicated by the outer circle) would have to be improved. Instead of e.g. exclusively
using transport by street, additional air transport may be necessary for example. It is
210

obvious that this would affect the transport network as well as the costs related to the
network.
Upgrading of the D+3 cross-border transit time objective (e.g. 80% D+2)
This simple example only presents one possible alternative. In case that e.g. the crossborder transport times between countries are reduced (due to improved transport
relations) additional time would be gained for collection and delivery in the countries of
origin and destination. This would weaken the above described trade off. In case that
the objective is upgraded from D+3 to D+2 the trade off would be strengthened.
Assuming that a relatively high share of cross-border mail comes from far-distant
countries (e.g. 30%) and the transport time frame between these countries could hardly
be reduced, then the national postal network would be affected in a similar way as in
the first example.
The current D+3 cross-border transit time objective presents already a restriction for
Greece and Spain (and probably for several AC, too). In case of adjusting or upgrading
the objective it is very likely that the compatibility between the cross-border and the
domestic transit time performances would be jeopardised in more MS (i.e. requiring
change to national networks in most MS).
Final Report
211
4.1.3.3 Conclusion
There is an interrelationship between domestic and cross-border performances with
respect to speed (D+3) as well as reliability (D+5). Depending on the similarity of the
different mail flow characteristics in particular with respect to the geographical
distribution the strength of the interrelationship varies. The more alike the mail flow
characteristics the more comparable their performances would be.123 Identical
performance is not likely because some domestic relations are not involved in crossborder mail (e.g. rural to rural areas).
Against this background it is very likely that a well-performing D+1 domestic postal
service supports the achievement of the current D+3 and D+5 cross-border transit time
objectives. In the cases of Spain and Greece but also with respect to AC domestic
transit time should therefore be improved in order to guarantee at least compatibility
with the current cross-border objectives.
In case of adjusting or upgrading the D+3 cross-border transit time objective it can be
expected that the compatibility between the cross-border and the domestic transit time
performances would be jeopardised in more MS.
The setting and measuring of additional transit time objectives for priority mail on
domestic level may further help to achieve the D+5 cross-border transit time objective.
But we want to emphasise that they are not necessary where D+1 performance at
domestic level and D+3 performance at cross-border level is already good as indicated
by the experience in the countries where D+5 performance is satisfying without a
corresponding domestic objective indicates (Denmark, The Netherlands and Finland).
Alternatively, transit time objectives should be separated into outgoing and incoming
cross-border priority services. Within the REIMS II agreement those objectives are
already implemented for incoming cross-border items. In some MS and AC objectives
corresponding to the domestic transit time objectives are explicitly set for outgoing
cross-border mail. The advantage of this solution is that differences in the mail flow
characteristics between cross-border and domestic mail can be taken into account. In
this case the risk of lacking comparability between the mail flows could be overcome.
123 Domestic compared with incoming cross-border transit time from the OoE to the delivery point and
with outgoing cross-border transit time from collection to the OoE.
212

4.1.4 Transit time and demand

The last two sections mainly focused on qualitative cost effects of QoS changes. But
what are the potential benefits? Benefits could be analysed on a micro- or a macroeconomic level. The micro-economic view focuses on the behaviour of the individuals
meaning the USP on the one hand and the postal customers on the other, whereas the
macro-economic view stresses the importance of QoS for the economy as a whole.
Generally speaking it can be expected that an improved quality of universal postal
service has a positive impact on the whole economy. The lower the development
degree of a country is, the more important this effect is. Especially, reliable postal
services are a necessary input for the economic development in these countries. In
well-developed countries this impact could be weaker or even ineffective due to a high
variety of different communication media used besides postal services. The decrease in
mail volumes observed in highly industrialised countries like Sweden, Finland or The
Netherlands is an example for this. In the view of the interviewed USPs improving QoS
can delay but not impede this process of mail substitution.
If mail substitution will be more and more a relevant issue in all present MSs it has to be
taken into account that the described cost effects of QoS improvements might be
strengthened. It could even be the case that the USPs might face cost increases due to
higher QoS requirements without any compensation by higher revenues.
On a micro-economic level the behaviour of the USP and its customers as already
mentioned above is in the centre of the evaluation. In order to identify potential
benefits of an improved QoS performance following interdependencies have to be taken
into account:
Impact of QoS changes on demand assuming stable prices for postal services
(quality elasticity of demand).
Impact of price increase on demand (price elasticity of demand) if changes in quality

are linked with higher costs.
The described effects have opposite impacts. Whereas increasing prices usually induce
a decrease in demand it is assumed that an increase in quality induces more demand.
Depending on which effect is stronger the result could be positive or negative in the
view of the USP (in terms of revenues).
A possible outcome for example could be that postal customers are willing to pay a
higher price for improved transit time while maintaining (or even possibly increasing) the
demand level. This would mean that the above assumed negative relationship between
price and demand would not be observed. In this situation increasing prices would be
linked with a demand increase. In fact, in this situation the positive quality effect is
outweighing the negative price effect.
Final Report
213
While some information exists about the price elasticity of demand with respect to
postal services, the level of the quality elasticity is still not empirically analysed. But it is
plausible to assume, that the lower the quality level is in the starting position the higher
would be the quality elasticity. This means that an increase in transit time performance
from 85% to 90% would have a stronger effect on demand than an increase from 90%
to 95%.
One important problem of the analysis carried out in this study is that an identification of
the potential demand caused by changes in QoS is not possible neither on the micronor on the macro-economic level.
In the course of the study besides USPs and NRAs a large number of customer and
consumer associations were asked about their opinion with respect to QoS issues of
postal services. The transit time of domestic and cross-border letters and parcels was
one important subject in the questionnaire. Against the background that only a small
number of associations answered the questionnaire the results are neither
representative for the Community nor for one particular country.124 In order to get at
least a first insight in the customers preferences with respect to transit time the main
results of the survey and the interviews are summarised in the following pages.125
The associations who answered the questionnaire are more interested in the transit
time of domestic postal services than those of cross-border services (Figure 4-33). The
number of answers concerning cross-border services is significantly lower than for
domestic services. This is valid for the associations in the MS and even more for
associations in the AC. Due to lacking experience in cross-border services, statements
about satisfaction and importance were therefore not given in some cases.
124 See Table Table 2-1.

125 The results of Eurobaromtre (2002) provides information about the degree of satisfaction with
respect to quality of postal services in general. It is not clear whether the questioned consumers have
associated quality with transit time. Therefore, the results can not be used in this context.
Nonetheless, the degree of satisfaction changed between 2000 and 2002. In Italy, France, Finland,
Belgium and Denmark the share of dissatisfied consumers fell whereas in Sweden, UK, Greece, and
Luxemburg the share rose. The countries with the largest decrease in the share of dissatisfied
consumers was Italy whereas in Sweden and Austria the share strongly increased.
See Eurobaromtre 58 Edition speciale (2002) Lopinion des consommateurs sur les services
dintert general, European Commission, DG Sant et Protection des Consommateurs.
214

Figure 4-33:
Degree of satisfaction and importance with respect to transit time

(MS)
100%
80%
60%
40%
20%
0%
MS
AC

Degree of importance
MS
AC

Degree of satisfaction
In order to judge which of the discussed opportunities (adjusting or upgrading the crossborder transit time objectives) should be implemented the benefits of the corresponding
objectives should be considered. As outlined in section 4.1.1 the demand is influenced
by quality of service (cross-border transit time) and prices. The price and the quality
effects on demand are unknown.
The outcome of the consumer/customer survey as well as interviews and discussions
with representatives of customer associations is not clear. According to statements of
FEDMA and EMOTA they are mostly interested in reliable and, to a lower degree, in
high-speed cross-border services. The reliability would be supported by a higher
percentage of mail delivered within five or four days. This is in our view at least partly
fulfilled according to the results of IPC. Based on interview results and economic
considerations we suppose that particular relations which are characterised by
important mail volumes would be well-performing.126 It is plausible to assume that the
126 The incentive to invest in time-consuming bilateral organisational agreements on interfaces and
transport means would be stronger the larger the number of transported mail items is.
Final Report
215
share of cross-border mail sent by large mailers would be very large compared with
mail sent by consumers or small business customers. According to interview results
with consumer associations we get the impression that mainly the reliability of crossborder services play an important role in their opinion.
Conclusion: Cross-border transit time objectives
The information available does not allow to draw conclusions concerning the customer
preferences.
However, based on the survey and interview results as well as on discussions with
experts a strong need for significantly higher intra-Community cross-border transit time
objectives was not identified.127 Therefore, due to likely cost impacts, and in absence of
firm evidence concerning customer preferences, a careful approach appears to be
needed concerning changes in the regulatory objectives, focusing on the most feasible
opportunities.
In this context, an adjustment or upgrading of the D+3 objective for all bilateral mail
flows would be not feasible. The feasibility of an adjusted or upgraded of D+5 for all
bilateral mail flows would be more likely because of lower cost effects.
Reducing the number of bilateral mail flows subject to the adjusted or upgraded
objectives correspondingly reduces the cost effects and therefore increases the
feasibility even of an D+2 cross-border transit time objective.
In the view of most respondents the domestic transit time is at least a fairly important
issue. When asked more deeply about the definition of transit time in the view of the
represented consumers/customers most of the responding associations vote for speed
and a definition based on a specified percentage delivered within x days.
Thus, speed seems to be the most important characteristic of domestic letters whereas
reliable delivery within a specified number of days in case of domestic parcels and
cross-border items plays the dominant role.128 Based on the limited information
available from the answered questionnaires, the degree of satisfaction is low in the view
of the responding associations.
127 The Irish regulator for example expresses the need for bilateral mail flow-related transit time
objectives. It is compatible with the Directive to set more demanding cross-border transit time
objectives even for particular mail flows.
128 There are considerable different point of views regarding the satisfaction degree with respect to
domestic transit time performance. Whereas associations from Luxembourg, Germany, Finland and
Austria are satisfied, associations from Belgium, France, Netherlands, Italy and the UK (Postwatch)
are less or not satisfied. Comparing with the stated performances of the USPs the results are
somewhat surprising in particular for The Netherlands. On the other hand, better served customers
are likely to have higher expectations.
216

General statements about the willingness to pay for improved transit time can not be
derived based on the survey results. We asked for the most important QoS issues
which should be improved in the view of the customers/consumers represented by the
associations. Within the present MS transit time has been classified as important issue
by 4 out of 13 associations. Additional willingness to pay has been stated by two
associations (business associations of France and UK). 2 out of 8 associations from the
AC (consumer association of Poland and a business association of Slovakia) have
considered transit time improvements as an important issue and both have stated an
additional willingness to pay for such an improvement. Therefore the picture is rather
mixed. The Italian example represents an additional piece of the puzzle.
Case study Italy
Poste Italiane introduced a D+1 service in 2000. The transit time performance is
relatively high and is independently measured by the NRA. The price of 0,62 Euro per
standard letter appears relatively high compared to prices in other MSs. According to
interview results with an Italian consumer association the customers are highly satisfied
with the new service. The degree of satisfaction is reflected by increasing mail volumes
of the posta prioritaria whereas 2nd class mail (posta ordinaria) and express mail
volumes (posta da estero) decreased in 2002. This indicates that the willingness to pay
for this improved service seems to be existing.
This outcome may be partly caused by a crowding-out effect as stated by Poste
Italiane. Before introducing the D+1 service customers used the express services also
offered by Poste Italiane. These services have been more expensive than the recently
introduced D+1 service. After the launch of the D+1 service the demand for express
services has declined. Therefore, it could be presumed that some customers have
substituted the express services by the priority service.
It is very likely that improvements in the domestic transit time are related to cost and
therefore price effects. But it is possible that even in case of strong cost effects
improved transit times could be feasible due to a corresponding customers needs and
willingness to pay.
Final Report
217
Conclusion: Domestic transit time objectives of 1st class letters
Based on cost considerations on the one hand and survey results on the other we are
not able to draw a clear conclusion about the feasibility of harmonised transit time
objectives. As QoS adjustments are associated with relevant cost effects it would be
careless to introduce these measures without assessing the demand for the respective
QoS. Therefore, additional information about the attitudes of the business customers
and consumers is necessary. Transit time improvements are economically feasible in
case customers would require them to be willing to pay for them.
4.2
Measurement of Quality of Service
CENs Technical Committee 331 has been developing a number of European standards
for postal services to provide a common framework for the measurement of quality. The
standards do not aim for an exactly defined common measurement system. They
outline minimum requirements to be adopted. The particular national measurement
should fulfil the minimum requirements to satisfy the information interests of the NRAs,
the postal customers and the postal operators themselves. According to the principles
outlined in the framework of the Postal Directive Committee, the permanent (EN) CEN
standards concerning QoS measurement within the universal service are eligible to
become "standardised conditions". They have to be applied if the USP is required to
measure the respective dimension of QoS according to the national regulatory
framework or does so voluntarily (see section 3.1.2.4 for more details). According to the
rationale in the Postal Directive standardised measurement methods should enable the
monitoring of QoS convergence across the Community.
Among other issues, CEN has been mandated to work out measurement standards for
the following postal services:
End-to-end transit time of single-piece priority and 1st class mail (EN 13850).
End-to-end transit time of single-piece non-priority and 2nd class mail (EN 14508).
End-to-end transit time of bulk mail (EN 14534).
Loss and substantial delay of registered mail (EN 14137) and of non-registered mail
(prTS 00331029).
Complaints and redress procedures (EN 14012)
218

Chapter 4.2 describes the developed CEN standards and evaluates if they are qualified
to overcome some important shortcomings identified in chapter 3 in an appropriate way.
Particularly, the analysis shall provide an assessment whether the related methods
allow for a measurement at reasonable cost and whether they are suitable against the
background of the ongoing EU enlargement. This subsection deals with the question
whether the defined measurement standards should become mandatory.
This chapter is not only dedicated to the adopted CEN standards. Additionally, a focus
lays on customer satisfaction surveys. We first discuss, whether an obligation for
conducting such surveys is necessary. In a second step the opportunity to develop and
apply a standard method for customer satisfactions surveys will be considered,
independently from a regulatory obligation to measure.
Finally, standardisation perspectives are highlighted. We address the importance of
new CEN standards taking into account the stakeholders view.
4.2.1 Transit time measurement of single-piece items
4.2.1.1 Requirements of EN 13850 and EN 14508

EN 13850 specifies a method to measure the end-to-end transit time for priority singlepiece and first class mail for domestic and cross-border flows. This methodology makes
use of a representative sample of all relevant types of 1st class single piece letter mail.
The underlying sample should adequately reflect the structure and the distinctive
features of the respective real mail flows. EN 13850 clearly defines the minimum
requirements in terms of geographical stratification and discriminant mail
characteristics. The requirements for the design involve the selection and distribution of
test items sent and received by selected independent panellists. In order to fulfil the
specifications of stratification and geographical coverage senders and receivers should
be spread all over the analysed postal areas.
The QoS indicator is the contingent of respective letters that were successfully
delivered through the analysed postal network within the defined time objective (on-time
performance). The overall transit time QoS result should be the percentage of mail
items arriving within the specified timeframe D+n. Depending on the test sample these
results are estimates of the probability that the transit time of a randomly selected item
has attained the specifications. With respect to the domestic transit time EN 13850
Final Report
219
allows for an accuracy129 level of 1%. Cross-border flows shall be measured with an
accuracy of 5%.
Pursuant to EN 13850 end-to-end runs from the point mail is placed into the collection
or acceptance system to the final delivery point, at each case under the responsibility of
the postal operator. The definition of the day of deposit in this way implies that posting
takes place before the published last collection time of the particular induction point.
In order to obtain the information needed for the sample design, the real national and
cross-border mail flows have to be analysed prior to the implementation of the test mail
measurement system. Within these real mail studies information should be collected
that is an essential input for the latter sample test design. Due to possible shifts of the
market and study environment over time real mail studies shall be conducted at least
every third year. According to the changes in real postal flows the sample design shall
be revised.
The standard for transit time measurement of 2nd class letter mail has been developed
on the basis of the requirements of EN 13850. EN 14508 focuses on single-piece 2nd
class items: letters sent without priority receiving slower processing compared to priority
mail. Both surveys may be undertaken simultaneously whereas the estimated transit
times have to be reported separately.
4.2.1.2 Adaptation
EN 13850 should be applied to 1st class and priority mail from 01/01/2004 for national
services, as decided by the Postal Directive Committee. Since IPC faces some
problems with regard to the adaptation of the current measurement methods
(identification of real mail flows, accuracy of the measurement which requires changes
in the panellists), the standard shall be applied to cross-border services as of
01/01/2005. EN 14508 has recently been formally adopted by CEN. The point in time
when the principle of this standard will become "standardised conditions" as well as the
related implementation deadline (if applicable) have not been decided yet.
Member States
Figure 4-34 illustrates whether the NRAs and USPs across the existing Community are
aware of the contents and implications of the measurement standards for the transit
time of single-piece items.
129 Accuracy is a quantitative measure of the magnitude of error. It describes the degree of conformity of
a measured or calculated value to its actual or specified value.
220

Figure 4-34:

14
EN 13580
14
11
EN 14508
10
13
Implications
13
USP
NRA
Apart from Austrian Post and the Dutch regulator Opta, who did not answer these
questions, all USPs and NRAs are aware of EN 13850. The Irish, Luxembourgian and
Swedish USPs stated that they do not know about the content of EN 14508. This also
applies to the Austrian, Greek, Luxembourgian and British NRA.130
With exception of La Poste (France) the USPs are aware of the implications resulting
from the adopted standards. Although the Luxembourgian NRA knows about the
content of EN 13850 the NRA reported not to be sure about the consequences of the
adoption of this standard.
Additionally, NRAs as well as USPs of the present MS were asked for an assessment
how long it will take until the measurement standard EN 13850 can be fully applied.
Table 4-6 reflects the responses. According to the USPs, EN 13850 will be fully
implemented for domestic surveys in 2005 at the latest. These answers correspond with
No answers from the Austrian USP and the Dutch NRA.

130 Since single-piece 2nd class mail is provided in Sweden and the UK, the lack of knowledge of the
Swedish USP and the British NRA is somewhat surprising.
221
Final Report
the results of a recent review of the European Commission, DG Internal Market.131

According to this document most performance monitoring surveys in the MS have a
fairly high level of compliance with EN 13850. However, some changes are still required
to the existing surveys in several Member States before they can be considered as fully
compliant with EN 13850 for domestic services.
Table 4-6:
Application of EN 13850
Domestic
Application
EN13850
Cross-border
USP
NRA
USP
NRA
2003
BE, DE, EL, ES, IE,

SE, SF
BE, IE, SE
BE, DK, EL, IE, SE,

SF
DK
2004
FR, NL, UK
EL, ES, FR, PT, SF,

UK
DE
BE
2005
DK, IT, LU, PT
DK, IT
ES, FR, LU, UK
EL, ES, FR, IE, PT,

SE, SF, UK
2006
LU
IT
later
not specified
n/a
LU
AT
AT, DE
NL
AT, IT, NL; PT
AT, DE
NL
The share of operators being noncommittal with respect to cross-border measurement

is high. Obviously some USPs are not informed about IPCs work progress in detail. In
contrast to the EN 13850 requirements, the UNEX survey of IPC does not fully take
account of the stratification requirements so far. The adjustment process will take until
the beginning of 2005. The Italian and Luxembourgian NRA have doubts concerning a
complete implementation of this standard for cross-border surveys before 2006.
Accession Countries
Figure 4-35 shows whether the NRAs and USPs in the Accession Countries are aware
of the contents and implications of the measurement standards for the transit time of
single-piece items. In comparison to the Member States the share of NRAs and USPs
who are aware of those standardisation issues is smaller.
131 European Commission, DG Internal Market: Implementation of the EN13850:2002 CEN standard,
October 2002.
222

Figure 4-35:

in the Accession Countries
EN 13850
EN 14508
4
3
Implications
USP
NRA
With regard to the application of the CEN-standard EN 13850 the USPs respectively the
NRAs of the Accession Countries have very different opinions about the time frame of
implementation (see Figure 4-36). The Estonian USP is even not aware of the existence
of this standard.
No answers from the Maltese and Polish NRA.
223
Final Report
Domestic first class
Cross-border first class
Figure 4-36:
Intended adoption of EN 13850 in the AC
CY, MT
Already applied
2004
2005
CZ, HU, SK
LT
2006
LV*, PL, SI*
Later than 2006

Not aware
EE
HU, MT, PL
Already applied
SK
2004
2005
CY, CZ, LT, SI*
2006
Later than 2006
LV*
Not aware
EE
0
For domestic first class services the Hungarian, Maltese, and Polish USP state that they
already apply the standard. The majority of the AC expect that they will implement the
standard in 2006 or even later. The main compliance issue to resolve in the AC appears
to be real mail studies which will require activities to be performed in almost all AC.
The performance of cross-border transit time measured in these countries does not
properly reflect the actual situation. In seven countries the measurement is based on
UNEX Lite. This methodology only covers some important city-to-city relations.
Therefore, the results are not representative for cross-border mail flows between the
countries. Moreover, the Lithuanian postal operator recently stopped the measurement
because of financial restrictions. The case of Lithuania clearly shows that the cost of
measuring the transit time performance plays an important role. The lower the mail
volumes per capita in a country, the more this restriction becomes important. Against
this background the AC will need significantly more time to adapt EN 13850 for crossborder surveys as well as for domestic services than the MS.132
In case of missing answers the NRA-opinion is provided (LV, SI). In the other cases the USP answer
is preferred.
132 The issue of the cost of measurement in low volume environment is being dealt within CEN/TC331 by
a dedicated Project Team (PT6). This team is preparing the ground for expected adaptation of the
existing standard in relation to a corresponding work item in the new M/312 CEN mandate.
224

4.2.1.3 Benefits, costs and possible limitations

As the analysis in chapter 3 reveals, the applied transit time measurement methods in
the Member States and the Accession Countries provide performance results that are
not comparable. Additionally, in many countries the current measurement surveys do
not meet the requirements of EN 13850 yet. This will be solved soon in the MS. On the
other hand, the reliability of some ACs results seems to be very restricted due to
inappropriate measurement techniques. The coverage of important characteristics (e.g.
type of induction, weight classes) strongly varies between these countries.
Independence of measurement is not guaranteed in the majority of the AC.
Consequently, the comparability of performance results is quite limited in particular
between the MS and the AC.
Against this background measurement by a suitable standardised methodology like EN
13850 would be beneficial in order to enhance the transparency of measurement and
the comparability of the performance results. However, comparability between the
operators performances is not completely given even then. The results must be
interpreted with respect to the adopted stratification as well as national and other
peculiarities in each specific case. Additionally, the published results might not be
comparable over time, as the measures refer to real mail streams of which the
characteristics may change over time.
Notwithstanding these limitations, the application of EN 13850 will at least reduce
uncertainties about the results from varying measurement methods. It will assure that
the measurement will be done in an as far as possible objective and equal way for
all operators. The use of EN 13850 could ensure that reliable and correct information
can be gathered which can be presented to regulators and to the public in a
comprehensible way. The common measurement methodology makes it possible to
evaluate the QoS convergence throughout the Community. Customers will benefit from
this standard since suitable objectives could be set and properly be monitored.
Nevertheless, the performance results do not necessarily reflect customers view. In the
first instance the methodology of EN 13850 is rather operator and process driven than
oriented towards customers needs. The transit time is measured as time period
between clearance and final delivery, which is completely under control of the USP. The
date of deposit is defined by the last collection of the day. The standard supposes that
posting takes place before this last collection. Items posted after that time are treated as
posted the next day. Thus, by earlier collecting times USPs are able to enhance the
transit time performance without making any real improvements (or even actually
decreasing the quality of service) in the view of the customers. The standard completely
disregards whether the timing of the last collection of the day meets customers
requirements and is therefore an issue for the NRAs to look at.
Final Report
225
The USPs, especially the ones in the Accession Countries, benefit from the transit time
measurement. The real mail studies give very useful information about the mail volume
and its structure. The measurement also enables a diagnostic monitoring of the
operators postal network. It provides an insight into the business process and allows for
the identification of possible shortcomings and bottlenecks. The USP gets the chance to
solve these problems by well directed interventions. Performance improvements and
probably an increase in productivity could be the consequences. Moreover, good
performance results could be used as a marketing instrument in order to build up a
good reputation.133
Besides the benefits the economic assessment of this standardised methodology has to
take into account the costs of measurement. Although the transit time measurement
induces positive effects, the costs of measurement should be in due proportion to the
benefits. The main cost drivers of EN 13850 are the provisions with regard to the
statistical accuracy of measurement and the need for stratification. The more
demanding the statistical accuracy and the more numerous the required stratification
variables the larger the necessary sample and therefore the number of panellists have
to be. This trade off induces increasing costs of measurement.
The Accession Countries are mainly characterised by certain technical constraints. The
measurement in these countries may even be more expensive than in the Member
States where well-developed postal networks already exist. Additionally, the costs to
adjust current national surveys depend on the present measurement system in each
country. Here, the operators of the AC have to make more efforts in the short term than
the USPs in the present Member States. Whereas the USPs in the present MS should
have no problems to bear the corresponding costs, the financial power of the USPs in
the AC might possibly be restricted. A phased introduction associated with a temporary
external funding could mitigate this problem.
With respect to cross-border priority mail in the enlarged Community the statistical
design of EN 13850 and in particular the geographical coverage may have cost
implications. The EU enlargement will substantially increase the number of relations
that have to be involved in the measurement of cross-border transit times. After the
accession of the ten ACs in May 2004 this would mean the monitoring of 600 links
(compared with 210 links so far). Due to the high demands on the statistical accuracy of
EN 13850 a precise continuous measurement for each specific relation would require
enormous efforts with corresponding high costs.
Studies on real mail volumes indicate that a large number of the cross-border flows in
the enlarged EU have very small real mail volumes. If the mail volumes per link are very
low it might be very difficult to guarantee representativeness of the sample. The current
133 This is even the case if the performance is rather bad in the beginning. The publication of improved
transit time performances could also result in a better reputation.
226

standard requires a statistical accuracy of 5% to be achieved on every country-tocountry relation. According to CENs Working Group 1of TC331, it will not be possible to
measure all 600 bilateral flows with this demanding accuracy on an annual basis.134
In some cases also the size of the domestic markets is very limited. The analysis of the
mail volumes shows that in some countries the annual domestic mail volumes are lower
than 50 million letters a year. It is estimated that the currently required statistical
accuracy of 1% including the additional design requirements, in particular the
geographical stratification, could mean up to about 20.000 test items a year. For a
country with 50 million items a year the test mail alone would then represent an
increase of 0.04%, which a priori seems out of proportion.134 It is therefore very
important to carefully assess the implementation of more appropriate minimal models.
The sample size and with it the cost of the measurement systems should remain in fair
relation to the size of the actual mail volumes.
Against the background of the EU enlargement the requirements of EN 13850 should
therefore be reduced. It will become difficult and probably inadequately costly to
measure the transit time on each individual flow according to a uniform proceeding. The
statistical requirements of EN 13850 should be reconsidered in order to ensure more
flexibility and less costly measurement results.
One practical solution in order to reduce the extent of the cross border monitoring and
thus the corresponding cost is grouping countries. These clusters could follow
geographical regions. For example instead of measuring the transit time performance
between Portugal and Latvia it could be as appropriate to measure the one between the
Iberian countries as a group and the Baltic countries as another group. However, most
Member States as well as Accession Countries resist clustering of mail streams mainly
due to political restraints. Monitoring of groups of countries possibly obscure the
differences in performance between different countries in the group. Some MS fear that
individual country-to-country information gets lost.
Alternatively, the accuracy requirements of EN 13850 could be linked to the mail
volume of the respective relation. A lower accuracy could be applied for the
measurement of the smallest mail flow links. The concept in general could be that the
level of accuracy and representativeness of the measurement system should be
proportional to the size of the actual mail volume. Additionally, it is worth considering to
simplify some mail characteristic requirements of EN 13850 for the countries with lower
mail volumes, such as the distance concepts or the stratification of discriminant
characteristics. Thus, this approach relaxes the accuracy requirements for small flows
whilst ensuring that there is sufficient information to satisfy the requirements of each
individual country.
134 CEN/TC331, Working Group 1, Mandate M312: Extension of existing Standards to new EU Members,
Report from Subgroup 2002.
Final Report
227
This way of measurement is certainly superior to a more extreme solution: to waive the
measurement of low-volume flows. Small mail flows are not important for the overall
transit time performance. Their weight in the overall performance figure is marginal. A
very close approximation is already possible if the measurement only concentrates on
the high-volume mail flows. Costs of measurement could be saved. However, this
solution would not comply with the requirements of the Postal Directive. According to
the Directive the cross-border objectives shall be met for each of the country-to-country
flows. Waiving the measurement for some bilateral relations would therefore jeopardise
the fulfilment of the objectives for these routes. 135
Concerning cross-border services single-piece non-priority mail only plays a negligible
role. Related objectives are not implemented. Therefore, EN 14508 for the transit time
measurement of non-priority and 2nd class mail might only be relevant for domestic
surveys. All arguments brought forward relating to EN 13850 are of relevance for EN
14508 as well. However, the importance of the concerned mail flows depends on the
USPs product portfolios and on the cultural background in each country. In some
Member States, e.g. in Sweden, single-piece 2nd class services only play a minor role
whereas in other Member States like the UK the demand is much higher. In several
Member States and Accession Countries 2nd class services are not offered at all.
4.2.2 Transit time measurement of bulk mail
4.2.2.1 Requirements of EN 14534

EN 13850 is not applicable for measuring the end-to-end transit time distribution of bulk
mail services. The transit time measurement of bulk mail requires different
measurement systems and methodologies. CEN has developed a separate transit time
standard for bulk mail due to the specific properties of this mail form. The situation with
bulk mail is such that only a few companies post large volumes of mail. Special
contracts between the sender and the postal operator often contain commitments like
pre-sorting or the day of deposit. The rules and requirements are often specific to that
contracts and therefore more complex. Measurement has to take account of this wider
range of potential characteristics. Similar to EN 13850 (i.e. use of a representative
sample, need for real mail studies etc.), the recently adopted EN 14534 CEN standard
specifies a set of requirements for the design of an appropriate measurement system
for bulk mail.
135 As mentioned above, CEN/TC331 has started working on the issue whether the measurement method
is feasible for limited mail flows. Activities have already been initiated with experts already at work
within a dedicated Project Team (PT6).
228

4.2.2.2 Feasibility
Bulk mail, which is mostly sent to consumers, represents the vast majority of the mail
volumes. Bulk mailers as well as postal operators offering bulk services have a major
interest in the transit time of these items. The senders of bulk mail want to know if their
postings are delivered on time whereas the postal operators could use the
measurement results to advertise for their services. Additionally, the achieved
performance possibly could justify the existing price level, if the results show that the
prices are strongly geared to the provided quality.
A major problem for the measurement of bulk mail transit times is to identify the date of
deposit. In order to do this test mail has to be induced in a senders mailing. Therefore,
the surveys cannot be conducted without the cooperation of the posting customers.
These bulk senders have pick ups at their offices or give their mail in large volumes to
the postal operators. In some cases the exact time of the induction of a postal test item
is ambiguous because posting may be spread over two or more days. Different from the
transit time measurement of single-piece items, the end-to-end transit time period of
bulk mail is not completely under control of the postal operator who is not able to verify
the resultant information. As the cooperating mail sender may have different interests
than those of the USPs, it is not sure that the measurement results are representative.
This reduces the benefits of the measurement for the postal operators. Only to a less
degree they are able to use the measurement for a diagnostic monitoring of their
network structure.
Since the costs of measurement should be in due proportion to the benefits, the former
should not be too high. This includes the additional costs for the cooperating bulk
mailers. Appropriate techniques have to ensure an cost-effective induction of the test
letters. The evaluation of the transit time shall performed as economically as possible.
The use of EN 14534 has to confirm whether these conditions are fulfilled.
The implementation of the available CEN measurement standard for the end-to-end
transit time of bulk mail would be valuable as long as the benefits of the measurement
exceed the costs. EN 14534 involves benefits for all parties. The development within
CEN was dominated by the USPs. That strongly supports the view that the transit time
measurement of bulk mail by EN 14534 is feasible at reasonable cost. Therefore this
CEN standard should be used by those postal operators who are required to measure
the transit time of bulk mail or do so on a voluntary basis. If a transit time objective
comprises single-piece and bulk items (e.g. the objectives for 1st class mail in most MS),
the results from the bulk mail measurement should be published separately from singlepiece transit time results in order to get a clear impression.
However, it is not common sense whether or not there is a need to protect the relatively
few bulk mailers by regulatory interventions. The senders of bulk mail are mostly large
Final Report
229
commercial customers who possess market power. They are able to organize their
interests as a counterparty to the postal operator(s). Thus, possible shortcomings and
failures could be resolved by private arrangements between the bulk mail senders and
the postal operator. In this case there would be no need for regulatory objectives and
requirements. In chapter 6 we will consider this issue in more detail.
4.2.3 Loss and damage of mail

As outlined in chapter 3, loss and damage of postal items is a very important issue in
the view of postal customers. CEN/TC 331 Working Group 1 aims for the development
of European standards related to suitable methodologies for measuring loss and
substantial delay of mail.
Loss of registered mail
The recently adopted standard for the measurement of loss of registered mail (EN
14137) does not require a full track and trace system. It merely requires a recording
measurement system which can count those items that have not been recorded as
received. However, this standard controls for recording and scanning respectively, not
for lost items. Some items may be incorrectly reported as delivered, e.g. in case of misdelivery. The postal operator can possibly not always give evidence of correct delivery.
Moreover, it is conceivable that some registered letters may not appear in the
monitoring system at all. Nevertheless, this CEN standard should be applied by those
USPs measuring the related QoS aspect. Even if EN 14137 does not allow an exact
determination of the lost registered items, it certainly enables a close approximation.
Loss of non-registered mail
The methodology considered in the current draft technical standard for the
measurement of loss and substantial delay of non-registered mail is largely based on
the implementation of the transit time test mail measurement systems as defined in
CEN standard EN 13850. Based on a representative test sample conclusions shall be
drawn about the rate of real mail that get lost in the process of postal conveyance. The
loss of mail shall be expressed as a percentage of total posted priority letter items.
A representative study is difficult to design. It is open to discussion if a standard for the
measurement of loss of mail based on a sample survey is appropriate to provide
representative and reliable results. Probably the number of relevant cases is too small.
In order to get a certain level of accuracy, an increase in the overall sample size is
generally needed. The sample size necessary to obtain a high level of statistical
accuracy of the transit time performance would not be sufficient to measure losses.
There are various reasons for non-response in a measurement system based on
panellists. It is difficult to identify whether a missing test item got lost within the postal
230

system, lost outside the postal system, has never been posted at all or has been
received but overlooked by the recipient. Thus, there are several reasons why test
letters generated for posting in a sample measurement system may not be reported as
delivered. Loss (or substantial delay) is only one reason. It is doubtful if response rates
could ever be improved sufficiently to be able to measure the loss rate. The benefits of
improving the response rate have to be weigh up against the additional costs. These
costs will almost certainly not justify a statistically accurate measurement of loss.
Moreover, losses are most likely to occur in clusters, e.g. vandalism or arson of a postbox, theft of a whole sack of mail etc. A test mail system is unlikely to treat these events
sensitively.
Instead of a representative measurement system, results of the measurement of
complaints could be used to get an overview over the loss of postal items. However,
complaints could only give hints about the extent of lost and damaged mail. It is
possible that the sender will never become aware of non-delivery, thus will never
complain about the lost item. The same is true for the addressee who often does not
expect a mail item and is therefore not aware of its loss.
An alternative could be the measurement of delay, like it is done in Portugal. USPs
could measure substantial delay (e.g. beginning with D+10 or D+15) as a by-product of
transit time measurement. This would not induce higher cost since EN 13850 requires
the transit time measurement up to D+30. The figures for substantial delay could reveal
if the postal operators exercise the conveyance of postal items with reasonable care.
Additionally, complaints related to loss should be taken into account. By both it would
be possible to get a rough picture of the extent of lost and delayed mail.
USPs partly refuse a measurement of loss and substantial delay since they fear the
publication of the results. In absence of a reliable method, which seems to be the case,
it is clear that publishing information requires great care. For this reason the draft TS
standard currently under development within CEN needs to be experimented in order to
prove whether the method is reliable or not.
But even if the measurement method provides reliable outcomes, excessive reactions
of the customers may be the consequence. Marginal loss of items is unavoidable for a
postal operator. It is part of the business. However, in the customers view no postal
item might get lost. This could induce a market failure. It is conceivable that the public
perceives the absolute amount of lost items as intolerably high even if the share of lost
items in terms of percentages is rather negligible. The resultant over-reaction and
related negative press reports would certainly have a very bad impact on the postal
operators reputation which is not justified with regard to its intensity. In order to avoid
these problems of publication, the USP therefore might only inform the NRA by a
confidential note.
Final Report
231
4.2.4 Treatment of complaints
4.2.4.1 Requirements of EN 14012

The Postal Directive requires USPs to publish once a year information on the number of
complaints they receive and on the time needed to deal with those complaints. The
adopted European standard EN 14012 shall ensure that this information is collected,
analysed, and reported in a consistent manner. The standard does not specify the
process for handling complaints. However, it lays down minimum requirements for a
complaints management system in relation to the treatment of complaints and redress
which enables to measure complaints and the speed with which they are handled.
According to EN 14012 any customer who wants to make a complaint must be able to
do so easily. Otherwise it would be possible to reduce the number of complaints by
making it difficult for users to complain. The usual means of communication (by letter, email, telephone, in person, by a official form) shall be available and at least one way to
complain must be free of charge. Information about the ability to complain and how to
make a complaint shall be clear, complete and simple. All personnel in contact with
customers shall be able to explain how someone can make a complaint.
The standard defines main categories of complaints, in order to classify them more
accurately.136 Each category is precisely described. Additionally, EN 14012 requires a
unique identification code for every complaint. It must be possible by this to trace each
complaint throughout the whole postal organisation. Thereby it shall be ensured that
complaints do not get lost as they move from one part of the system to another.
The postal operator has to define a maximum time for the receipt of complaints.
Furthermore the postal operator is required to determine maximum handling times
within which the complaints shall be resolved. If the investigation is expected to take
longer, the service provider shall give an initial acknowledgement reply. Moreover, the
response should include information on the formal arbitration and regulatory or legal
resources which are available to a dissatisfied complainant.
The postal operator could fail to fulfil its requirements. According to EN 14012 the postal
operator has to publish the criteria leading to compensation in this case. Detailed
information must be available on how the redress procedures work. Nevertheless, the
standard does not state what the level and form of compensation should be. The
operators shall determine these matters in conformance with the NRAs.
136 These categories are delay, loss or substantial delay, damage, change of address, mail delivery or
collection, mis-delivery, access to customer service information, access to postal services, how
complaints are treated, and other complaints.
232

4.2.4.2 Adaptation
The NRAs and USPs in the Community and the Accession Countries were asked if they
are aware of the measurement standard EN 14012. Additionally, the NRAs as well as
the USPs of the present MS gave an assessment how long it will take until the standard
could be fully applied.
Member States
Figure 4-37 assesses whether the content of the standard is known by the NRAs and
USPs, if it is possible to adjust the previous complaints system to the requirements set
by the forthcoming standard, and if preparatory activities for the set-up of EN 14012
already have started.137
Figure 4-37:
Implementation of CEN standard EN 14012
DE, DK, FR, IE, IT, PT, SF, SE
Preparatory activities
AT, BE, DE, DK, EL, ES, FR, PT, SF
DK, FR, IE, IT, SF, SE
Adjustment possible
Awareness of
regulatory
implications
NRA
USP
9
AT, BE, DK, EL, FR, IE, IT, PT, SE, SF, UK
11
AT, BE, DE, DK, ES, FR, IE, IT, LU, PT, SE, SF, UK
13
AT, BE, DE, DK, EL, ES, FR, IT, NL, PT, SE, SF, UK
13
The Irish and the Luxembourgian USP and the Greek NRA stated that the regulatory
implications resulting from the standard are unclear to them. Most USPs consider it
possible to adapt their routines to the standard. In the majority of Member States
preparations are taking place. With respect to a full transposition of EN 14012 most of
the NRAs did not feel able to give an assessment (see Table 4-7). Six USPs also did
137 The Dutch NRA provided no information.
233
Final Report
not specify a date. So, there may be some uncertainty about the exact date of a
harmonised measurement of complaints redress procedures across the Community.
Table 4-7:
Timeline for full transposition of EN 14012
EN14012
USP
NRA
2003
EL
IE, SE
2004
BE, DK, IE, SF
DK, SF
2005
ES, PT, SE
IT
2007
FR
FR
no
specification
AT, DE, IT, LU, NL, UK
AT, BE, DE, EL, ES, LU, PT,

UK
n/a
NL
Accession Countries
Only a minority of the USPs are aware of the recently adopted CEN-standard EN 14012
(see Figure 4-38). The NRAs are in general better informed about the standard.
Figure 4-38:
Awareness of the CEN-Standard EN 14012 in the AC
CY, EE, LV, PL
NRA
CZ, HU, LT, SK, SI
CY, CZ, EE, LT,

LV, PL, SI
USP
HU, SK
Aware of 14012
The Maltese USP didnt answer the question.
Not aware of 14012
234

4.2.4.3 Benefits
The adopted European standard EN 14012 specifies minimum requirements of
complaints and redress procedures related to domestic and international postal
services. This standard shall assure an effective handling of complaints from the
viewpoint of the customers. Therefore, it denotes requirements for the complaints
management system to be implemented by the service provider.
Complaints are requests given by users of postal services in order to express that they
feel the service received has not met the standard they expect. In case of the regulated
postal market it is also conceivable that the service provided does not comply with the
standard the service provider is committed to. In particular, private consumers often do
not have the possibility to change the provider in case of poor performance. In order to
communicate their dissatisfaction and problems they use complaints as voice strategy.
EN 14012 guarantees transparent and simple procedures for dealing with these
complaints. In a regulatory view this standard could be regarded as an instrument to
protect the users if the service provider does not respect the commitments or promises
made. Hence, customers certainly benefit from the implementation of EN 14012.
Complaints are also very valuable for the service providers. Complaints give USPs the
opportunity to verify if the actually provided service conforms with the aspired service.
The level of complaints and the reasons for complaints provide important information
about the satisfaction of users with different aspects of the postal service. They are
useful control means for the efforts to continuously improve the quality of postal
services. Therefore, the postal operators have an intrinsic motivation to enable
complaints, to investigate them, and to reply to them. Against this background the costs
induced by the implementation of EN 14012 seem to be acceptable. The standard
allows for sufficient flexibility to adjust the concrete design of the complaints
management systems to the individual needs of the postal operators. EN 14012 does
not specify any steps during the handling process of the complaints.
EN 14012 will, of course, neither guarantee that all complaints are resolved with a
satisfying result nor that the handling times are met. However, it will ensure that users
are not discouraged from complaining. All complaints will be counted and the handling
times are categorised and measured in a consistent way. It requires a system to be in
place which records all complaints and their treatment, provides an audit trail to allow
checks to be made on how complaints are treated, and allows for reports to be
produced on the performance of the system. Unless measurement is undertaken in
accordance with these principle, the figures obtained could be seriously misleading and
also unstable from year to year. Thus, the application of EN 14012 will improve the
monitoring and control of the complaints handling process.
Final Report
235
4.2.5 Customer satisfaction surveys

Almost all USPs of the MS and the AC use customer satisfaction surveys to control their
strategies and to adjust them in time. This stresses the high importance of this
instrument. In order to ensure compliance between the provided services and the
customers needs, the measurement of customer satisfaction could be required by
regulation.
4.2.5.1 Regulatory requirement for customer satisfaction surveys

Regulatory requirements relating to customers satisfaction surveys seem not to be
necessary. All profit-oriented service providers have an intrinsic interest to monitor
whether their services are customer-oriented. Customer satisfaction surveys give USPs
the opportunity to verify whether their services currently provided meet the customers
needs. In a competitive environment, and this should be the objective for the postal
market, the measurement of customer satisfaction will become a must for the USP.
Although the consumers satisfaction will directly be reflected in the market shares of
the providers, customer satisfaction surveys could probably reveal the reasons for the
shift of market shares. In this respect surveys could provide important information on
users satisfaction with recent changes in service. They are useful and necessary
means of control in order to evaluate continuously the impact of the USPs business
policy on demand. They allow an adequate analysis of the present business strategy.
Only if the pressure of competition seems to be too low, a regulatory requirement could
be justified. Publication of the results is then a key issue. In such an environment it is
needed that the result are accessible for the regulators. Against this background, there
may be a need for the NRAs in Greece, Luxembourg and some AC (CY, LT, LV) to take
action as the USPs there do not conduct customer satisfaction surveys yet. However,
the NRAs should carefully consider if regulatory provisions will become redundant due
to increasing competition.
In the view of eight NRAs it is conceivable that the introduction of customer satisfaction
surveys would get obligatory for the USP in the next five years (see Figure 4-39). NRAs
could use the outcome of customer satisfaction surveys as source of information. The
results may provide indications about the necessary focus of future regulation. If there is
a sudden drop in a corresponding index, it would provide a mechanism to investigate
what the reasons are for such deterioration. In order to obtain such qualitative
information there are two possibilities. On the one hand the NRAs could measure
customer satisfaction themselves. On the other hand the USPs could be required to use
a standardised measurement method and to publish the results.
236

Figure 4-39:
Possibility of mandatory customer satisfaction surveys in the view

of the NRA
n/a: NL, SE, UK
Yes: AT, BE, DK,

FR, IT, LU, PT, SF
No: DE, EL, ES, IE
4.2.5.2 Standardised measurement method for customer satisfaction surveys

Ten NRAs consider the definition of a Community method for measuring customer
satisfaction (e.g. by CEN) as an opportunity (see Figure 4-40).
Figure 4-40:
CEN standard for customer satisfaction measurement
USP
1
n/a
NRA
6
No
2
8
Yes
10
Only the French and the German regulator refuses the introduction of a CEN standard.
The USPs appear to be more split on this issue.
Final Report
237
The reasons against a standardised evaluation of customer satisfaction are numerous.

The USPs throughout the Community are probably too different to implement a unique
measurement standard. An appropriate methodology applied in one Member States
might be unsuitable in another. Services are very heterogeneous from country to
country and customer perception varies a lot. A common methodology would assume
that a qualitative topic as customer satisfaction takes into account cultural differences
and national peculiarities. Against this background only a very simplified methodology
would be appropriate.
However, such a basic method will probably not fit the operators own interests. It
makes little sense to compare the satisfaction of the customers with different postal
services in different countries. Thus, the reason for having a common standard that
makes such a comparison possible feels rather useless. Above all the use of customer
satisfaction surveys is related to the national market. It concerns the relationship
between the national postal operator and its customers. With a common standard there
will be less flexibility and it is harder for a single USP to identity specific shortcomings.
Therefore, postal operators prefer the use of individualised surveys tailored to their own
needs. If a simplified measurement standard would be implemented across the
Community, the USPs would probably not give up their own tailor-made surveys. Due to
the high degree of national differences it is unlikely that a standard could define
minimum requirements, sufficing to provide suitable information to the regulators, and
that the same survey then could develop some additional operator-specific items.138
Therefore, the USPs would have to conduct two surveys. The resultant cost duplication
is substantially unnecessary. The standardised measurement result will have minor or
no value for the USP. The use of a simplified measurement method for customers and
the NRAs seems also questionable since the vague results hardly allow to draw any
accurate conclusions.
4.2.6 Standardisation perspectives
4.2.6.1 Standardisation in stakeholders view

This subsection states the stakeholders priorities for CEN activities and their vision how
standardisation should evolve in the future. It presents the interests of different
stakeholders in current activities of CEN and in participating in its work.
138 This position reflects the view of WIK on a standardised method for customer satisfaction surveys.
However, this issue is very controversial.
238

Awareness and involvement
Besides the Luxembourgian USP all postal regulators and operators of the present MS
are aware of and informed on the European standardisation activities carried out within
CEN/TC331 (see Figure 4-41). Concerning the AC some USPs (CZ, EE, MT, SI) and
NRAs (CY; LV) lack awareness and information about CEN.
Figure 4-41:
European standardisation in the operators and regulators view
6
6
Awareness of CEN
14
14
6
6
Informed on CEN
14
14
Interested in CEN
6
Involvement
8
8
NRA (MS)*
USP (MS)
10
13
14
10
NRA (CC)*
USP (CC)
Nevertheless, all regulators and operators in the AC are interested in European

Standardisation activities with respect to QoS measurement. The interest of the Danish
USP depends on the subject matter and the terms of involvement. The Swedish USP
regards the CEN activities as cost-driving and one-sided, since the standards become
only mandatory for USPs but not for competitors. In a liberalised market they would not
be in the public interest. Therefore, the Danish and the Swedish USPs are not willing to
be (more) involved in the European standardisation activities. The same is true for the
operators of Finland, the Netherlands, Lithuania and Slovakia. Five NRAs do not intend
to get more involved.139 The Danish regulator has not any recourses to participate in
further activities. Like the Belgian and the Irish regulator the German NRA is already
No answers from the NRAs of the Netherlands (MS), Malta and Poland (ACs).
139 The USPs of Estonia and Malta and the Spanish NRA did not answer this question.
239
Final Report
participating in all relevant Working Groups. Additionally, the German NRA sees no
need for further standardisation due to a risk of an over-standardisation.
Only 46.2% of the customers organisations are aware of European standardisation and
only 53.8% are interested in the CEN activities. Nevertheless all these organisations
see a benefit in EU harmonised methods of QoS measuring (see Figure 4-42).
Altogether, 84.6% of the customers organisation consider harmonised measurement
methods developed by CEN to be beneficial.
Figure 4-42:
European standardisation in the view of customer organisations
Awareness of CEN
Interest in CEN
Benefit from
harmonised methods
0%
20%
40%
60%
80%
100%
Around half of the customers representatives are aware of the adopted CEN standards
EN 14012 (handling of complaints) and EN 14508 (transit time measurement for 2nd
class items). Nearly two of three have notice of EN 13850 (transit time measurement for
1st class items). 75% of them consider the adoption of EN 13850 as useful. Altogether,
53.8% believe that EN 13850 is of use for their members (see Figure 4-43).
240

Figure 4-43:
Customers representative organisations' awareness of adopted

CEN standards
EN 14012
EN 14508
EN 13850
Use of EN 13850
0%
20%
40%
60%
80%
100%
Additional CEN standards
NRAs and USPs were asked whether additional CEN standards which recently have
been worked out are considered interesting for implementation. The picture across the
different stakeholders is not consistent (see Figure 4-44). For the NRAs in the MS the
standards with regard to loss of mail are the most relevant. The ACs NRAs are most
interested in the implementation of the measurement standards for bulk mail and for
loss of non-registered mail. Especially the implementation of this technical specification
is not of interest for the USPs in the present MS and in the AC which is not really
surprising. As Figure 4-45 points out, in the customers perception the measurement
standard for loss of registered mail is the most important new CEN item (63.5%).
241
Final Report
Figure 4-44:
Assessment of additional CEN standards interesting for

implementation?
6
6
Non-priority mail
(EN 14508)
9
5
Bulk mail (EN 14534)
10
7
Loss of registered
mail (EN 14137)
11
11
5
NRA (MS)*
Loss of non-registed
mail (prTS)
10
11
USP (MS)
NRA (CC)*
USP
No answers from the NRAs of the Netherlands (MS), Malta and Poland (ACs).
Figure 4-45:
Importance of additional CEN standards in the view of customers

representatives
Bulk mail (EN 14534)
Loss of nonregistered mail

(prTS)
Loss of registered
mail (EN 14137)
0%
20%
40%
60%
80%
100%
242

4.2.6.2 Future work of CEN

This chapter considers the importance of CEN standards which are going to be
developed within the new CEN mandate. Possibly they provide appropriate solutions to
overcome existing limitations.
The second CEN mandate contains additional QoS issues within the universal service
that shall be considered for standardisation:
Measurement of quality of access to postal services and of the quality of postal

delivery
The scope of this work item is to draw up one or more standard(s) related to the
methodology for the measurement of the quality of access to postal services and the
quality of postal delivery. This subject might encompass indicators such as queuing
time for accessing postal services, collecting time and delivery windows etc.
The access conditions are strongly linked with the transit time perception of senders
and receivers. This perception does not necessarily correspond with the applied
measurement method of transit time. In general, the measurement method merely
reflects the operators view. Therefore the published transit time performance is not
affected even if the collection time is changed (see 4.2.1.3). Moreover, the transit
time measurement does not take into account the time of day when the item is
delivered. It also does not describe the conditions of the items when delivered.
Against this background additional requirements with regard to access and delivery
conditions should be discussed. The work item has to collect information and to
weigh up potential benefits from standardised measurement methodologies against
the induced costs in the EU Member States. However, if any requirements with
respect to access and delivery shall be set it must be ensured that an effective
monitoring is possible.
End-to-end measurement of the quality of service of parcels using track and trace
technology
It is open to discussion whether the setting of transit time objectives and the
corresponding measurement is necessary in case of services which make use of
tracking and tracing. In this case the customer is able to monitor the way of the item.
If in the view of the customers reliability is far more important than speed, it would
be easy for the customers to obtain sufficient QoS information due to the track and
trace systems. Against this background, there would be no need for regulatory
objectives and a requirement to measure the end-to-end transit time respectively.
However, it is not sure, that the track and trace systems will be adopted for all postal
items. Moreover, in case of poor performance, the user might have no alternative
provider he could change to, if workable competition is not present. Thus, the
relevance of a measurement requirement for the transit time of tracked and traced
Final Report
243
parcels depends on the importance of speed in the viewpoint of the customers and
on the intensity of competition on the relevant postal markets.
Notwithstanding the regulatory provisions for measurement, a standardised
measurement method for the end-to-end transit time of parcels would be in any
case an opportunity. A corresponding CEN standard could involve benefits for both
the USPs and the customers.
Therefore, the scope of a dedicated new work item is to identify an appropriate
measurement methodology. The standard shall relate to the measurement of the
parcel services given to private persons, households and businesses who post
parcels over the counter at post offices or give their parcels directly to the parcel
service operator. The methodology will only encompass parcels that are included in
the postal operators track & trace system.
It might be possible that all postal operators within the Community will apply the
track & trace technology for the main parcel services used by the consumers and
small business customers in the near future. If not, this QoS indicator would not
contain all relevant QoS information of the parcel market.
Extension of existing standards for multiple operators.

This work item bears in mind the possible effects of the progressive market opening
to competition. These changes in the market environment may require adapting
existing standards in order to guarantee that they do not inadequately impede the
USPs, the competitors or potential entrants in their possibilities to compete. Against
the background of the ongoing liberalisation on postal markets this is a highly
important work item.
Extension of the standards to new EU members.

Preparing the Accession Countries for using the existing standards is an essential
subject of future work. Although the standards enable a flexible implementation,
these flexibility areas might not be sufficient. In order to enable their application in
the enlarged Community it is therefore necessary to identify required amendments
(concerning the transit time measurement of single-piece mail see 4.2.1.3).
In the view of the stakeholders the work items with respect to access and delivery as
well as with respect to the transit time measurement of parcels are relatively important
(see Figure 4-46). Especially the NRAs attach importance to standards relating to the
access and delivery conditions. A standard for the transit time measurement of parcels
is favoured in particular by the USPs in the AC and the customer organisations. Two
additional new work items which correspond to the measurement of services outside
the universal service (hybrid mail and unadressed items) are of minor interest from the
stakeholder viewpoint.
244

Figure 4-46:
Importance of new CEN work items in the stakeholders view
100%
80%
60%
40%
20%
0%
Access & delivery
NRA (MS)*
Parcels
USP (MS)
NRA (CC)**
Hybrid mail
USP (CC)
Non-addressed mail
Customers' organisations
For all questions relating to standardisation it has to be borne in mind, that standards
should only be developed where really needed. Whether a standard is of interest or not
depends particularly on its benefits and its flexibility. Postal operators are generally
cautious in the field of developing standards due to the risk of unwanted inflexibility in
case of implementation. Once imposed, it could be difficult to adjust them in a dynamic
setting where customer needs and competitive conditions change rapidly. If postal
operators have to follow outdated standards, this may limit their commercial and
competitive capacities. This would be a disadvantage for the operators and possibly for
customers as well. Therefore, standardisation issues have to be elaborated adequately.
Regular reviews are necessary in order to ensure that measurement standards will
properly adjust to a currently changing environment. This approach shall support that
the standards are of considerable potential and benefit the operators as well.
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4.3
245
Deriving feasible opportunities for future QoS policies
This section summarises the main findings of the analysis of potential opportunities with
respect to QoS objectives, requirements, performance and measurement issues. The
conclusions encompass a catalogue of feasible opportunities for the future QoS
regulation. These objectives and measures could possibly overcome recent
performance limitations and provide the opportunity to improve quality of postal
services. They take into consideration the costs of improving QoS beyond the present
level and enhancing the accuracy of measurement and weigh up these expenses
against potential benefits.
The feasible opportunities mainly focus on cross-border and domestic transit time
issues. This also reflects the opinions of the NRAs and the USPs who were asked for
the most important aspects of QoS that should be subject to regulatory objectives and
requirements.140 Additionally, the emphasis is placed on the measurement of lost and
delayed mail, the handling of complaints and the access conditions. This reflects the
consumers and customers views of important regulatory areas.
Objective and performance level
The possibilities to amend the current intra-Community cross-border objectives

(upgrading and/or adjustment) have been discussed in detail. Additionally, the feasibility
of the current intra-Community cross-border transit time objectives within the enlarged
EU has been analysed.
The current cross-border objectives are seen as feasible for the present MS as well as
for the AC. Currently, especially Spain and Greece must improve their cross-border
transit times in order to meet their legal obligations, which is considered to be feasible
as long as the USPs endeavour to get rid of the problems in their domestic postal
networks.
Logistical problems between the present MS could not be identified. But these problems
are relevant for the country-to-country relations between the AC themselves as well as
between the AC and the present MS. These problems temporarily hamper the
achievement of the intra-Community cross-border transit time objectives for the majority
of the bilateral mail flows between the AC and MS. It should be taken into consideration
that most of the MS failed to meet the Postal Directive objectives at the time it was
adopted. Against this background it should be considered whether the USPs of the
Czech Republic, Hungary, Malta, Slovak Republic and Slovenia need a transition period
at all. The other USPs, especially the Cypriot one, may need one. A transition period
shall be granted exceptionally and only after a very detailed analysis and discussions.
Before deciding on a transition period for these AC, information about their actual transit
time performance is needed. Currently, this information is not available because cross-
140 For details see appendix stakeholders views.
246

border transit time measurement does not take place with respect to all bilateral mail
flows. Consequently, a reliable measurement system should be implemented before
finally deciding about the necessity of a transition period in some AC.
With respect to the MS the amendment of the current cross-border transit time
objectives is discussed. Due to lack of information about quantitative cost and demand
effects a final conclusion about the feasibility of the particular opportunities could not be
drawn. With respect to the expected strength of cost effects either an adjustment of the
D+5 objective (e.g. D+5 99%) or an adjustment/upgrading of all objectives for selected
bilateral mail flows could come into question.
Furthermore, the compatibility of domestic and cross-border transit time objectives and
performances has been analysed. Mainly country-to-country relations including Spain or
Greece missed the D+3 objectives in the last year. Whereas in Greece problems in the
national postal network seems to be responsible for low-performing cross-border and
domestic transit times in Spain a D+1 service is still not on offer. Against this
background the Spanish operator should consider introducing a D+1 service in order to
facilitate compatibility with the cross-border transit time objectives.
Besides the compatibility of the speed objectives the relationship between the
supplementary reliability objectives for domestic and cross-border 1st class mail (e.g.
D+2 or D+3 objectives) have been analysed. Except for three MS all MS have set such
objectives. Even without a domestic transit time objective their cross-border transit time
performance meets the D+5 objective. In case D+1 performance at domestic level and
D+3 performance at cross-border level is already good, regulatory objectives seem not
to be necessary in order to be compatible. With respect to the AC a supplementary
reliability objective is reasonable. Additional costs due to measurement are not
expected in case measurement is already undertaken.
The past and expected future development of the transit time performance with respect
to 1st class mail supports the opportunity to implement more aligned D+1 objectives in
all MS. The interrelationship between geographical as well as demographic factors and
the domestic transit time performance has been analysed. Based on this partial analysis
it seems that the higher the population density and the higher the degree of
urbanisation the higher is the transit time performance. Nonetheless, this result should
be cautiously interpreted due to shortcomings in the data. In particular the transit time
performances which are measured by even slightly different methods are not
completely comparable. Furthermore, there are some important outliers. This outcome
clarifies that even in case of negative geographical and demographical conditions
efforts could be made to overcome these restrictions, so that they are not determinant
for the transit time. This means that besides geographical and demographic factors
additional important influential factors are effective which can not be covered by the
analysis. Postal customers preferences reflected by their willingness to pay is such an
important factor. In case they are willing to pay a higher price for more speed, even in a
country with geographical or demographic disadvantages high transit time
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performances might be feasible.

The USPs of Spain, Greece, France and Belgium should therefore consider to improve
their domestic transit time. Assumed that an improved transit time corresponds to postal
customers needs and is reflected by a higher willingness to pay, investments in the
postal network could be feasible.
Besides transit time objectives for 1st class letter services the setting of national
objectives for parcels in all MS has been discussed. The requirement to introduce
transit time objectives for parcel services in all MS strongly depends on the national
parcel market situation. In order to identify market failure information is needed about
the actual quality of service provided by the USP.
The quality aspect is at least two-fold. The first part corresponds to the network access.
This part is already regulated in the MS as it is an essential aspect of the universal
service obligation. The second part corresponds to the transit time and the reliability of
parcel delivery. Due to tracking and tracing the measurement of transit time becomes
more easy and less costly compared with the former situation. In case of low volumes
measurement could be a problem. It is not guaranteed that it is economically
reasonable to invest in a tracking & tracing technology in case of very low parcel
volumes. Against the background that the number of delivered parcels is relatively low
(between 0.2 and 7 parcels per capita) the measurement costs in these cases are
probably relatively high.
In case spill-over effects are significant (reflected by the transit time performance) a
regulatory transit time objective is not seen as necessary in our view. In case the quality
is not sufficient the setting of a regulatory transit time objective should be taken into
consideration.
Measurement level (results from status quo and CEN perspectives
The application of EN 13850 for the transit time measurement of 1st class mail will
generally ensure reliable and comparable (to some extent) performance results across
the Community. IPC will apply EN 13850 for the measurement of cross-border mail
flows within the enlarged Community as of 2005 in compliance with the Member States
commitment in the framework of the Postal Directive Committee. In the present Member
States this standard will in general be implemented for domestic surveys in 2004 at the
latest (2005 in some cases). The Accession Countries will have to adjust their
measurement systems to (possibly adapted) EN 13850 as soon as possible. In case of
financial bottlenecks a temporary external funding could alleviate the problem.
In order to ensure statistically valid measurement results and to control the cost of
measurement, the accuracy requirements of EN 13850 could be related to the size of
the measured mail streams, which is currently being investigated within the
CEN/TC331. Moreover, additional requirements with regard to access and delivery
conditions should be discussed and possibly drawn up in the framework of the new
CEN mandate.
248

Since operators and customers benefit from the transit time measurement of bulk mail,
the related standard EN 14534 would be valuable. The standard was defined through
consensus building among the industry stakeholders where the USPs are quite
influential. Therefore, it seems to be certain that the application of the standard would
not cause inadequate costs. EN 14534 probably fits the operators and customers
interests as good as possible and does so at reasonable cost.
Although its useful application depends on the competitive environment on parcel
markets in the future, Working Group 1 should go on with developing a transit time
measurement standard for parcels. In case of missing alternative operators for
consumers and small business customers this standard could become relevant.
Since a statistically accurate measurement of lost mail seems not to be possible it
would be an opportunity to determine substantially delayed postal items in the context
of the transit time measurement. The experimental standard (TS) which is in
development should be experimented as soon as accepted in order that the reliability of
the measurement method could be evaluated. The requirement to publish the
measurement results should be replaced with a confidential notification of the results to
the regulator.
EN 14012 will support the implementation of simple and transparent complaints and
redress procedures. At the moment it is not exactly foreseeable when this standard will
be applied in every present MS and AC. Therefore, postal operators shall be
encouraged to carry out their complaint handling according to this standard as soon as
possible. For the AC a longer transition phase might be necessary.
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QoS regulation against market developments
This chapter addresses the interrelation between QoS, regulation, market trends and
liberalisation with a focus on the upcoming evolving competition in a stepwise opened
postal market, leading to a completely opened postal market in the future.
5.1
Development of the EU postal markets: from monopoly to competition
Postal services traditionally used to be provided by Public Postal Operators (PPO). This
was the fact for almost the whole 20th century and has started to change only during the
last decade. The liberalisation process in Europe evolved end of the 80s, establishing a
framework with the Green Paper and the first Postal Directive towards a stepwise
market liberalisation.
The reasons for public services provision have been twofold. Firstly, postal services
have been seen as a basic service representing an important input for the economic
development but also to achieve social cohesion within a country and the
Community.141 Secondly, availability and affordability of postal services all over the
country in the view of the states required public service provision. This perception
started to change in the 1980s. With the liberalisation of the US American
telecommunications market researchers and policy makers started to think about the
opportunity to transfer the concept of liberalising network industries to the postal service
provision.
The corner stones of the liberalisation process within the EU as far as they concern
the here undertaken analysis with a focus on the incentive and their impacts on the
market structure142 can be seen in the following elements:
Corporatisation of the PPOs and their establishment as profit seeking firms
This invented the incentives for cost efficient service provision. Postal operators
started to restructure their network and altered and diversified their service
provision. Privatisation can be seen as an additional step in this transformation
process. But the examples of New Zealand and to a certain extent Germany
show that privatisation seems to be less responsible for restructuring towards more
efficient service provision than corporatisation.
141 With the foundation of the UPU, the foundations for establishing a single postal market had been laid,
and thus transferred the aims on the national level to the international.
142 An analysis of the development in each of the Member States is not being provided in this chapter.
The focus is on general results and connections between QoS, regulation and market development in
an increasingly liberalised environment.
250

Declaration of liberalising the postal market to competition (gradual, and controlled

liberalisation, EU-Directive; specified dates for complete market opening, national
law, i.e. Germany)
This awareness of a liberalisation in the near future supported the incentives to

restructure and to prepare for competition. The strength of this effect on the USP
was and still is dependent on the credibility of postal policy on national as well as
European level.143
Stepwise market opening (defined by weight and price thresholds)
In fact, the stepwise market liberalisation of letter mail services did not much harm
on the USPs. In terms of mail volumes, the market share subject to competition has
been too small to allow competitors to challenge the USPs. The transition period of
stepwise market opening is being used (and according the Directive is supposed
to be used) to prepare USPs for competition in a completely liberalised postal
market. This has offered USPs the opportunity to use the transition period to
modernise and restructure their network and/or to adjust their service portfolio
including QoS to customers preferences.
According to the Postal Directive the reserved services and thus the stepwise
market opening should enable the USPs to continue providing universal service,
e.g. to cover the costs of serving unprofitable regions or customers. Besides this
motivation, the stepwise market opening also has been implemented in order to
facilitate the transition of the former public postal operators towards market
orientation and competition.
It shall be stressed that according to the Directive the USO is a necessary
measure to ensure QoS. Since there are universal services that are not reserved
services, QoS regulation is not necessarily restricted to monopolistic market
segments but also covers services subject to competition.
Technological progress and mail substitution
Mail substitution is expected to increase with the development of new

communication technologies. In the amended Postal Directive increasing mail
volumes are still be seen as a necessary condition to ensure universal service
provision in a further liberalised market. Although there are no indications of
decreasing mail volumes at present, the fact that Posts is not a noticeably growing
market (like telecommunications), makes ceteris paribus the liberalisation process
much more likely to harm USPs (compared to telecommunications) and thus
143 This may explain the different behaviours and stages of development of the USPs within the EU, i.e.
La Poste and Deutsche Post.
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251
universal service provision. In fact, it also has to be taken into account that the
regulation of postal markets goes not as far as the regulation of telecommunications
markets with its unbundling and interconnection obligations. Therefore, liberalisation
of postal markets ceteris paribus is much less likely to harm USPs compared to
telecommunications.
5.2
Rationale for QoS regulation
5.2.1 QoS regulation in monopolistic markets

Applying normative economic theory market failure calls for public provision of the
respective services. Regarding postal services the monopoly has been in place
historically, and the reasons for this have been multi-dimensional. In this subsection the
role of QoS regulation in monopolistic markets shall be addressed. Thereby we will
restrict our analysis to markets that are monopolistic at present and in the foreseeable
future. This assumption will be relaxed in the next subchapters.
Under monopolistic conditions without threat of competition and only very limited
possibilities of substitution the incumbent has hardly any incentives to follow
consumers preferences. Dependent on its goals it offers a quality-price mix which, for
example maximises its profits. Such a strategy can be associated with low quality
services. The problems with such a monopolistic service provision are twofold: (1)
prices exceed costs and include monopoly rents, (2) service quality does not reflect
customers preferences. This requires regulatory intervention addressing both, price
and quality regulation. In case of introducing price regulation without setting any quality
standards the monopolist may react with quality reductions which can be interpreted as
hidden price increase. Therefore in regulated, monopolistic structured markets quality
regulation is necessarily the other side of price regulation,144 and in this context QoS
objectives and requirements are a form of regulatory intervention.
Objectives and requirements are usually to be determined in a political process. The
problem of revealing customers preferences makes it an ambitious undertaking. The
strength of pressure groups not necessarily reflects the interests of the different
customer groups and may lead to QoS specifications that differ from those that would
144 Economic theory does not provide a clear guideline regarding the impact of the market structure on
service quality. There are contradictory results, so it is not for sure that a monopoly only provides
services on a low-quality level. Furthermore, economic theory treats quality as a one-dimensional
variable. But especially against the background of regulation quality has to be considered as being
multi-dimensional. See Noam, Eli M. (1991): The Quality of Regulation in Regulating Quality: A
Proposal for an Integrated Incentive Approach to Telephone Service Performance in: Einhorn,
Michael A. (ed.): Price Caps and Incentive Regulation in Telecommunications, Boston.
252

evolve under competition. This, among others, can explain that the market outcome of
regulated monopolies is less welfare maximising than under competition.145
5.2.2 QoS regulation in competitive markets

As outlined above QoS regulation is necessary in monopolistic markets. Whether this is
required in competitive market too will be addressed in this subsection. In detail this
subsection deals with the following issues:
Reasoning of QoS regulation in competitive markets
Potential evolution of QoS regulation within a liberalised environment (regarding

rationale, purpose, scope and depth)
Impact of QoS regulation in the transition period of monopoly towards competition
In order to provide an assessment of the issues raised, an analysis of the incentives

and strategies of the economic players in the transition towards a competitive
environment will be undertaken. This should provide the basis to assess the
consequences for the need of regulation. The subsection starts with the reasoning of
QoS regulation in competitive markets. Before undertaking the regulatory analysis with
regard to postal services, results of the questionnaires will be presented that give some
indication on the perception of USPs and NRAs about the role of QoS in a competitive
market environment.
Reasoning of QoS regulation in competitive markets
Regulatory intervention in basically competitive markets has to be justified at least

from an economic point of view by market failure. Even though the market does not
fail completely the service provision does not meet the requirements as it would do
under workable competition. Within the political process also distributive considerations
(e.g. ensuring an affordable minimum service for those who would not be served with
such conditions under workable competition) justify regulatory intervention.
Quality regulation with respect to postal markets is particularly being applied with the
universal service obligation. The universal service obligation is justified by the idea that
under competitive conditions and cherry picking of new competitors parts of the
population or some regions are not being served due to high average costs. A negative
trade off between liberalisation and the provision of universal services is therefore
145 These insights can be seen as the first steps towards liberalising communications markets.
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253
feared. Since policy makers wanted to assure that a certain degree of QoS as well as
affordable prices will be offered USO policy was invented.
Besides this fear of market failure other reasons for QoS intervention can be derived.
Bargaining power can be seen as a phenomenon that leads to a market outcome which
is not welfare maximising. Customers with homogenous preferences can be grouped by
market segments. Depending on their demand in relation to the overall service provision
they may achieve a purchasing power. This can result in a situation where, even under
competitive conditions, the needs of all groups/market segments will not necessarily be
met because of heterogeneous preferences. Some customers demand more others
less from the product or service. The needs of the first group are more likely to be
noticed by the suppliers especially in a situation where competition is about to start
because the effects on the companys return are much stronger. Nevertheless, under
sufficient competitive conditions it can be expected that the needs of small and
economically less important customer groups will be considered by operators.146
Asymmetric information can also be a reason for market failure. Postal services are socalled experience goods. The sender does not know the characteristics and the quality
level of the service before concluding the contract. Furthermore the postal user is
usually not able to observe the actual provided quality. This uncertainty can also be
described as an asymmetric distribution of information to the disadvantage of the postal
user. But as the name indicates (experience good), service operators that want to
sustain in the market have incentives to offer reliable QoS and thereby overcome
quality uncertainty. In postal markets under monopoly the USPs had the opportunity to
provide a sustainable QoS and thus to eliminate quality uncertainty for its customers
without loosing market shares.
Role of QoS in a competitive market environment results from the questionnaire
The impact of liberalisation on cross-border transit times has been addressed in the
questionnaires. Since the amended Postal Directive already opened the market for
outgoing cross-border items to competition with beginning of 2003 this is an example of
a market segment where liberalisation has stepped forward to a great extent.147
The majority of NRA and USP is of the opinion that liberalisation would have a positive
impact on the cross-border transit time. Whereas none of the NRAs assume that there
could be a negative impact, three of the USPs are afraid of negative effects.
146 This does not mean that service provision will adjust to customers preferences regardless to costs.
147 The liberalisation of ingoing cross-border, of course, is still subject to the national degree of regulation
and monopoly rights.
254

Figure 5-1:
Impact of liberalisation on cross-border transit time in the view of

USPs and NRAs (Member States)
FR,NL,UK
Don't know
AT, DK, FR, UK
EL, LU, PT
negative
0
SF
none
SE
AT, BE, DK, ES, IE, IT,

SE
BE, DE, EL, ES, IE, IT,
LU, PT, SF
positive
5
NRA
10
USP
According to the Belgium and German NRA as well as the Danish USP competition
increases the number of provided cross-border postal services according to customers
needs. In their perception, the positive impact does not only imply an increase in transit
time performance. Furthermore, it is expected that a wider range of cross-border
services will be available characterised by different transit times.
Providing high quality services meaning reliable as well as quick delivery of postal
items plays an important role in order to maintain USPs market share. This is the
view of several NRAs but also of USPs that already face competition and struggle to
keep their position (NRAs from EL, IT, and LU; USPs from IT and ES). At least, most
USPs regard QoS as an important strategy in order to ensure customer retention (BEUSP, IE-USP, IT-USP, SE-USP). Interestingly, one USP mentioned the fact that the
existence of competitors may help the USPs to learn more about customers needs in
the sense that competitors and their applied strategies can serve as benchmark for the
USP.
Taking all these positive expectations (on cross-border as well as domestic services) for
granted, the position of the Irish and Portuguese NRA should be emphasised, which
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255
makes the picture more complete: In case of transit time they expect the QoS of bulk
mail to be enhanced whereas QoS for single-piece items would be decreased because
of expected missing competitive pressure in this market segment.148 This example as
well as economic theory suggests that competition is likely to affect first those market
segments that are economically more attractive (like business customers). The focus on
large mailers associated with increasing cost pressure due to price competition, may
result in disregarding the private consumers and thus decreasing QoS.
Evolution of QoS regulation in a transition period and within a liberalised environment
Whether decreasing QoS for private consumers is a likely outcome of liberalisation and
competition has to be analysed more carefully. The following assessment will consider
a situation of a completely liberalised environment. Additionally, the impacts of QoS
regulation during a transition period on the competition to be expected under complete
liberalisation will be analysed.
Of course, liberalisation will have an impact on operators incentives towards more
customer orientation. But there is indication to believe that incentives already changed
with corporatisation, privatisation and partial market opening: modernisation and
restructuring of the network started or has nearly been finalised. Besides reengineering
the network structure and increasing automation, relevant cost cuts could have been
realised also by reducing the number of access points to the postal network.
Taking these incentives that are in line with the statements of the questionnaires as
a starting point, we must consider the economics of providing postal services in order to
derive impacts on QoS for private and business customers. There is no doubt that
business customers will be the first who will benefit from competition. Operators,
competitors as well as USPs will aim at meeting customers preferences and thus to
gain or sustain market shares. As indicated above, increasing QoS and diversifying the
service portfolio will be relevant strategies. Transit time in terms of speed and reliability
is likely to be an important feature of QoS in competition. For most USPs this has
required them to modernise and restructure their network in order to meet the QoS
demanded by the market. As long as business and private mail is being processed in
the same network, private consumers also benefit from the increased QoS, since the
operators hardly take the effort to separate mail, which in fact would not be
economically at all. Only those parts of the conveyance chain that hardly contribute to
the service provision for business customers, decreasing QoS could be a likely
outcome. This is basically the collection network with the post offices and street letter
boxes, a part of the infrastructure which is extremely cost intense. Therefore
liberalisation and competition may lead to a QoS reduction in the access network mainly
affecting private consumers and small business customers.
148 Both NRAs mentioned this aspect in the context of domestic services.
256

Whether this is likely or not depends on various factors and can hardly be predicted for
every Member State. Nevertheless, the recent developments in Germany may give
some insight concerning the incentives driving the USPs QoS strategy. Deutsche Post
which has remarkably modernised and restructured its network since the beginning of
the 1990s followed the strategy outlined above. Reducing the number of post offices
and street letter boxes were announced in order to cut costs. Even though Deutsche
Post took account of USO, the public opposed strongly against this cost cutting
strategy. Deutsche Post already removed about 30.000 street letter boxes, when they
noticed that public opinion completely condemned their action, Deutsche Post
announced the re-installation of some of them. It seems that reputation may outweigh
remarkable (fixed) costs of the access network.
This example may give some insight in possible corporate strategies and show that
lowering the QoS of the access network and thus QoS for private consumers not
necessarily is a sustainable strategy. Nevertheless, we do not know Deutsche Posts
reaction in a competitive environment. On the one hand, competition is expected to
strengthen the cost pressure which would support the hypothesis that Deutsche Posts
reaction as recently observed - would not prevail under competition. On the other
hand, a competitive environment sets incentives to adjust to consumers preferences. In
fact, it is surprising that the latter effect has already been observed in the absence of
competition and it might be expected that it is strengthened under competition. In any
case, the USO in place assures the QoS at the access level, specified by each Member
State (within the frame of the Directive) and therewith the minimum QoS being
provided. In case reputation really has such a strong impact, there is no indication for a
considerable QoS reduction. Therefore, it can be questioned whether the importance of
QoS regulation will increase.
Depending on the political goal of market liberalisation and the associated allocative
and distributive effects regarding the provision of postal services it might be acceptable
to reduce QoS in certain segments and areas. This could be justified against the
background of technological innovation and availability of other means of
communication that substitute traditional mail services. Since a dense access network
is extremely costly and private consumers increasingly substitute traditional mail by
other communications services, it seems to be economically advisable to relax the USO
in this respect. This, of course, is a political decision, evaluating the ease to access the
postal network of those people who remain to use traditional postal services and live in
areas where the establishment of access points is extremely costly. Anyhow, it should
be emphasised that such a measure substantially contributes to a sustainable USO
provision.
To evaluate QoS regulation during a transition period, its impact on competition in a
completely liberalised environment has to be analysed. Therefore, we must ask under
what conditions competition is likely to evolve and sustain. To benefit from competition
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257
entry barriers must be eliminated or at least reduced. With the following points we want
to illustrate the impacts of QoS regulation on barriers to entry.
QoS regulation under monopolistic service provision allows the incumbent to

establish a good reputation in order to overcome quality uncertainty. In contrast,
competitors have to start from scratch with customers facing complete quality
uncertainty. One solution could be the use of track and tracing systems. But since
these systems are relatively costly, the new entrants will hardly be able to compete
with a track and trace service in the segment for standard letter mail. Therefore QoS
objectives imposed by regulation can be regarded as a cost efficient way to
overcome quality uncertainty but it should be noted that it gives the incumbent the
opportunity to achieve a competitive advantage over the newcomers in the course of
a transition period.
In addition to the reputation issue, the incumbent operator due to history has the
advantage of existing customer relations and thus high mail volumes compared to a
newcomer. With relevant economies of scale and scope in the provision of postal
services this is associated with a cost advantage of the incumbent operator on top
of the first issue.
QoS regulation that exceeds the public goal to provide a minimum service quality all
over the country at affordable prices can be regarded as a substitute for
competition. In case QoS regulation assures the provision of the respective service
quality, the incumbent is already prepared to offer services according to customers
preferences. The more the QoS regulation leads to a diversification of service
provision of the incumbent, the less impacts of competition can be expected in a
completely liberalised market. Since niches will already be foreclosed by the
incumbent operator, competitors will find it hard to differentiate themselves from the
incumbents service provision and thus to sustain in the market. Only in case QoS
regulation substantially fails to meet customers preferences USPs may face a cost
disadvantage since they have to provide QoS nobody in fact is demanding. Due to
their mail volume it could still be likely that the USPs average cost remain under
those of the competitors. Even if that is not the case it is difficult to judge whether
the cost disadvantage outweighs the other advantages mentioned above.
5.3
Consequences for QoS regulation in (stepwise) liberalised postal

markets
Based on the general assessment of QoS regulation in competitive markets the insights
shall be applied to the specific situation on the Community postal markets. Policy
relevant questions are: How far will the present objectives be required for a sufficient
quality of service in the future and to what extent will the (optimum) level of objectives
be affected by liberalisation and competition?
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Regarding the scope of QoS regulation (neglecting the distinction between USPs and
competitors) we think it is reasonable to transfer the results of the subchapter above on
the current situation on the EU postal markets: Due to positive incentives of competition
on QoS provision an extreme position would be to suggest a reduction or elimination of
QoS regulation. But because of the universal service problem this is not a realistic and
feasible policy recommendation. QoS regulation in terms of USO can be interpreted as
a kind of fall back solution in order to guarantee a minimum service quality under
competition that in the positive and more likely event does not restrict operators in a
way that exceeds the pressure of the market forces (but in case of the market underperforming universal service). Past QoS regulation due to the Postal Directive as well
as national regulation assured the politically desired service quality or at least provided
measures to enforce it. The likelihood of failure of the different QoS objectives and
requirements is difficult to assess and is likely to differ from country to country. Thus,
identification of objectives that will be required in the future is difficult, but as just
outlined not necessary relevant. As outlined in the analysis above a quality decrease
might be viable in the access area. Since asymmetric information was identified as a
reason for market failure, measures like monitoring the loss of mail items as well as
transit time (as already being imposed by the Directive) shall be provided also under
competitive conditions.
The extension of QoS regulation does not seem to be necessary due to positive
incentives of competition on QoS in a liberalised and competitive environment. As
discussed in the previous subsection, QoS regulation of an already corporatised USP in
a monopoly market that is supposed to be liberalised in the near future, can have a
negative impact on the sustainability of competition. This negative impact on
competition is due to the regulation of the past as well as the incentive set by
corporatisation and upcoming liberalisation, and will exist regardless whether QoS
regulation will be prolonged at this level or not. The fact that QoS regulation substitutes
incentives which are expected to be set by competition in fact establishes a barrier to
entry when the market is completely opened. This raises the question whether this
hampers competition to such an extent that the positive incentives of competition to
provide QoS will not develop. In case of such an outcome, QoS regulation like under
monopolistic conditions again becomes a necessary means of regulating postal
markets.
The interrelationship between QoS regulation, monopoly, corporatisation, and
competition, within a transition period to transform monopolies in competitive markets
reveals the difficulties to find the balance between QoS regulation and competition. The
more QoS regulation is fulfilling this task in the transition period (and the longer this is)
the less likely a sustainable, workable competition will be.
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The fact that posts is not a noticeably growing market leads its liberalisation much more
to the problem of harming the incumbent operator than in the telecommunications
market. Against this background intensifying QoS regulation in postal markets is a
measure to smoothen the impacts of liberalisation on the incumbent operator but on the
other side makes the market less contestable for competitors.
Altogether, it can be advised that extending QoS regulation must be considered with
care. From a sole economic point of view, it can not be recommended. In order to
support sustainable USO provision a reduction of the QoS level could rather be
indicated (e.g access network). From a social and political perspective, an extension of
QoS regulation could be argued on social grounds. Nevertheless, political decisions on
upgrading or adjusting QoS objectives and requirements should focus on addressing
QoS shortcomings and relevant issues.
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Conclusions, policy guidelines and recommendations
6.1
Conclusions
Before deriving recommendations and next steps for future QoS regulation the main
conclusions from the comparative assessment and the analysis will be summarised.
They refer to measures on the objective and requirements setting level as well as on
the level of measurement (requirements and methods) and performance.
In chapter 3 of this study potential opportunities have been derived by applying a
comparative approach. Whereas some of the potential opportunities have been
discussed in the subsequent analysis, some shall be discussed in this chapter. The
different opportunities can be attributed to different levels or subjects:
Opportunities which refer to QoS objectives or requirements
Opportunities which refer to QoS performances
Opportunities which refer to QoS measurement methods
Furthermore there are two subjects which can not be attributed to one of the three
levels. On the one hand these are opportunities which refer to the incentive structure.
The incentive structure shall guarantee that the USP endeavours to meet the QoS
objectives and requirements. On the other hand there are opportunities which refer to
the procedure how regulatory objectives and requirements are set or how measurement
methods are developed. These opportunities are additional results of the comparative
approach.
Comparative assessment feasible opportunities
Objective/requirement level
Transit time objectives for other domestic postal services than priority mail and
parcels
Limitation of transit time objectives on single-piece items
Satisfying requirements for the access to the postal network
Incentive structure
Enforcing the publication of QoS objectives and performances as well as

relevant information about the measurement methods
More QoS-oriented sanction mechanisms: price-quality link
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More transparency with respect to sanction mechanisms
Involvement of customers in setting the QoS framework
Institutionalised involvement of postal customers in setting QoS objectives
Institutionalised involvement of postal customers in the development of

measurement standards (especially on CEN-level)
Analysis feasible opportunities

Objective/requirement level
Amendment of current intra-Community cross-border objective (upgrading

and/or adjustment)
Compatibility of domestic and cross-border transit time: D+1 services in Spain

and some AC
Implementation of harmonised D+1 objectives
Implementation of supplementary reliability objective for 1st class mail (e.g. D+2
or D+3 objectives)
Setting national objectives for parcels in all MS (potentially limited to the main
parcel services used by consumers and small business customers)
Performance level
Improving cross-border transit time performance in particular in Greece and

Spain as well as in the AC
Improving domestic transit time performance in present MS and future MS
Measurement level (results from status quo and CEN perspectives)
Application of relevant transit time measurement standards for single-piece

items developed by CEN (EN13850 and EN14508) in all present MS as well as
AC
Enhancing the flexibility of measurement standards with respect to statistical

accuracy (activities already started within CEN/TC331 within the new mandate)
Application of the CEN standard for the transit time measurement of bulk mail
(EN14534)
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Application of the measurement standard for complaints and redress procedures

(EN14012)
Application of the CEN standard for the measurement of loss of registered mail
(EN 14137)
Development of a standard for measuring loss and substantial delay of priority

and 1st class single piece mail (activities underway within CEN/TC331 for the
development of a TS experimental standard)
Development of a transit time measurement standard of parcels services

(activities have already started within the new mandate for CEN/TC331)
Development of a measurement standard of access and delivery conditions

(activities have already started within the new mandate for CEN/TC331)
Before recommendations with respect to the particular opportunities can be derived

additional criteria are needed in order to restrict the range of possible opportunities (e.g.
in relation to cross-border transit time). These criteria are presented and briefly
discussed in the next section.
6.2
Policy guidelines and derivation of recommendations
6.2.1 Policy guidelines

In order to derive recommendations from the preliminarily summarised conclusions it is
necessary to prove carefully the need and the possibilities of regulatory interventions.
Apart from economic aspects, social and political criteria have to be taken into
consideration. Therefore the following criteria should be taken into account for the
subsequent derivation of recommendations:
Scope of QoS regulation: minimum vs. high level objectives and requirements
The Postal Directive aims at improving the quality of postal services in all MS and
on Community level. Moreover, the Directive aims at establishing a level playing
field. This is reflected by a set of rules related to specified QoS aspects focusing on
transit time, regularity and reliability of postal services. In general the Postal
Directive is primarily characterised by setting minimum objectives and requirements
in relation to postal universal services. Due to the diversity of the Member States
and the ongoing enlargement of the Community the implemented rules are more of
a general nature so that the MS can fill them up according to their individual needs.
An important exception of this rule has been the setting of clearly defined intraCommunity cross-border transit time objectives as well as the requirement to link
264

the quality of cross-border QoS on terminal dues. Moreover, QoS objectives and
requirements set on national level should be compatible with these cross-border
objectives set on Community level.
As a result of the general framework provided by the Postal Directive the scope and
depth of QoS regulation varies a lot in the MS. It ranges from defining minimum
standards for some selected services to very demanding objectives and
requirements for even all universal services.
Providing universal services of a specified quality at affordable prices presents an
additional restriction for the scope of QoS regulation. The regulatory framework has
to balance between a in the view of postal customers satisfying QoS level and
the resulting costs faced by the operator. The prices of postal services should be
geared to costs. In case of relatively demanding QoS requirements price increases
could be inevitable. Only in case of possible QoS improvement with no cost or a
corresponding willingness to pay on the side of all or at least the majority of postal
customers this would not hamper QoS improvement.
Level of QoS regulation: harmonised vs. individual QoS objectives and requirements
(including measurement issues)
The second important objective of the Postal Directive is the provision of converging
conditions throughout the Community postal market in order to support social
cohesion within the Community and the development of an internal market. QoS
regulation on Community level therefore has to balance between two important
principles: Achieving a possibly high degree of harmonised conditions on the one
hand and taking country-specific needs into account on the other.
QoS regulation under changing market conditions: monopoly vs. competition

The firstly mentioned relation between QoS regulation and costs plays an even
more important role if the current and future market conditions have to be taken into
account. Increasing competition and changes in the behaviour of demand of postal
customers especially with respect to 1st class postal services have a negative
impact on USPs mail volumes and therefore on their cost structures.
Depending on the degree of market opening each MS is characterised by another
mix of challenges with respect to their individual market conditions. Some MS have
already abolished the reserved area whereas in other MS even the new thresholds
for the reserved areas are not yet adopted. Within the enlarged Community the
range will be even wider. These different states of development may conflict with the
objective to harmonise QoS objectives and requirements on a relatively high level
as well.
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Coverage of QoS regulation: protection of all postal customers vs. protection of a

selected group of postal customers (consumers and small business customers)
Against the background of the current and potential future market conditions it has
to be asked whether postal customers need protection by regulatory interventions
and if yes, which group of customers would be affected by potential market failures.
This has to be judged by taking account of changes in the market conditions. If the
postal market is characterised by increasing competition it would be highly probable
that large mailers are more easily able to protect themselves by private
arrangements whereas consumers and small business customers would have little
or even no opportunities to bargain about price and quality.
The brief discussion of these criteria makes clear that there are important trade offs
between them:
Differences in the national postal market conditions limit the opportunities for
harmonised QoS regulation on national and Community level. Therefore, QoS
regulation as setting of minimum objectives and requirements is the most
suitable way to produce a harmonised development.
Furthermore, QoS regulation with very demanding objectives and requirements

is limited due to costs and induced price effects. This trade off would be
strengthened in case of decreasing mail volumes which can be a result of
competition or changing demand behaviour (mail substitution).
The quality level ought to correspond to the needs of postal customers reflected
by their willingness to pay. As long as the postal customers are willing to pay a
higher price for improved QoS more demanding regulatory objectives and
requirements could be justified.
Nevertheless, such a policy is not necessarily recommendable. There is a risk to
overestimate the willingness to pay (due to incomplete information) and thereby
to enforce a QoS level that is not demanded by the market.
The coverage of QoS regulation with respect to postal customers can be

reduced with increasing competition and its associated beneficial effects (market
failure as guideline for QoS regulation in liberalised postal markets).
6.2.2 Derivation of recommendations

In the course of the analysis carried out within this study a lot of conclusions have been
drawn. These conclusions will now be discussed against the background of these
identified trade offs. They provide the guideline in order to derive recommendations for
future QoS regulation and practice.
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QoS regulation in the AC is characterised by the very rapid adjustment process driven
by their wish to join the Community in 2004. On the regulatory side additional time is
needed to collect experience in quality regulation. On the operators side a
reorganisation and adjustment of the existing national postal networks is necessary in
most of these countries in order to fulfil the QoS objectives and requirements.

In the following the focus lays on transit time objectives, performance and measurement
methods. Cross-border and domestic transit time issues are separately dealt with as far
as possible. As the transit time of both mail flows should be measured by applying the
same standards the recommendations with respect to measurement methods is
commonly presented.
6.2.2.1.1 Cross-border transit time

Significant cross-border transit time improvements have been realised with respect to
both objectives (D+3 and D+5) in the last five years. Furthermore, an increasing
alignment of transit time performances (D+3 and D+5) can be observed on Community
level which are mainly driven by QoS regulation (Postal Directive) and the REIMS II
agreement. As required by the Postal Directive a direct linkage between the terminal
dues and the transit time performance for ingoing cross-border items has been
implemented in the agreement.
The existing cross-border transit time objectives are feasible for all countries the
present MS and the AC at least in the medium term. The development is mainly
limited due to transitory logistical constraints in particularly between the present MS and
the AC as well as between the AC. Moreover, the implementation of a measurement
system according to EN 13850 needs additional time (2 years).
A wide range of potential amendments of the cross-border transit time objectives has
been discussed. Most are seen as feasible at least in the medium term. In some cases
cost and therefore price effects are probable. It is very difficult to derive final
conclusions with respect to each particular possibility due to lacking information about
consumers and customers needs and the related willingness to pay. Furthermore, the
impact of QoS improvements on prices is only qualitatively derived assuming that
identified cost effects would result in price effects.
Nonetheless, for country-to-country relations from and to the AC a transition period is
necessary to adopt the current, the adjusted or even upgraded cross-border transit time
objectives. The length of this period highly depends on the degree of adjustment or
upgrading, and speed of economic integration.
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267
Objective level
In general, the definition of the current objectives should not be relaxed in order to
guarantee a harmonised level of cross-border transit time performances in all present
MS and the AC. Taking this harmonisation objective and the lack of information on cost
effects as well as customers acceptability in mind in our view it is not recommendable
to upgrade in particular the D+3 objective at this stage.
Adjustment D+3
For the present MS the technically feasible adjustment of D+3 from 85% to e.g. 87%
or 90% would have the following potential effects which have to be taken into
account. The requirements to restructure the national postal networks with respect
to collection and delivery of cross-border items would be strengthened in order to
achieve compatible cross-border and domestic transit time performances.
Additionally, it has to be considered, whether an adjustment of the transit time
objectives set by the REIMS-agreement (and the thereby implemented incentive
structure) constitute a necessary precondition.
Cost effects at least in some MS due to the inter-relationship between cross-border
and domestic transit time are unknown but very probable. Because of insufficient
information about the customers needs and willingness to pay on Community and in
particular on national level a final recommendation about the adjustment of D+3 can
not be given.
Adjustment of D+5
Reliability of cross-border postal services is a very important issue against the

background of the Postal Directives objectives (harmonisation and development of
an internal market). An adjustment of D+5 to e.g. 98%, 98.5 or even 99% would
support improving the reliability. Additionally, this adjustment would have a positive
effect on the organisation of national postal networks. This effect would be weaker
than in case of an adjusted D+3 objective. But it would certainly support a higher
reliability of domestic mail, too.
The cost effects of an adjusted D+5 objective would be lower or even negligible
compared with an adjustment or upgrading of D+3 which would have a more
significant impact on D+1 objectives and performances on national level.
Against the background of harmonised conditions on Community level and the
ongoing need for reliable postal services on national as well as on Community level
we recommend an adjustment of D+5 to more than 97% (99% at maximum). In our
view a high degree of reliability by defining a D+5 99% objective is superior to an
upgrading objective (e.g. D+4 95%). Thus we do not recommend an upgrade to D+4
at this stage.
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Transition period for the AC
For the AC the current cross-border objective of D+3 85% should be maintained.
Currently, it is unclear to what extent the AC already meet the current objectives.
Therefore we can not recommend neither an upgrade nor an adjustment. This shall
be reconsidered after transit time monitoring has been implemented. This
information is additionally necessary in order to decide on the final transition period.
On the one hand technical and organisational problems between the countries have
to be solved on the other the national postal networks have to be adapted. With
respect to the former aspect especially Cyprus will face strong problems due to
lacking flight connections. Concerning the latter one we expect that Poland have the
worst starting position of all AC.
It should be taken into consideration that as the Postal Directive came into force,
most of the MS fail to meet the cross-border objectives Against this background it
should be considered whether the USPs of the Czech Republic, Hungary, Malta,
Slovak Republic and Slovenia need a transition period at all. The other USPs,
especially the Cypriot one, may need a transition period. The final decision should
be derived when cross-border transit time measurement is carried out with respect
to all bilateral mail flows. As long as the performance is not reliably measured, the
objective has no effect at all.
Performance
Improving cross-border transit time performance in particular in Greece and Spain

as well as in the AC
In order to fulfil their legal obligation to meet the Community objectives, especially
Spain and Greece have to improve their performances. In order to incite to an
improved cross-border performance, the terminal dues for the AC, who are not
member of the REIMS agreement so far, should be linked to the quality of service
achieved (as required by Article 13 of the Postal Directive).
6.2.2.1.2 Domestic transit time

On national level a harmonisation of transit time performances with respect to priority
letter services is visible. Performances of more than 90% are highly probable in the
majority of the present MS within two years.
Whereas the AC currently experience high mail volume growth, some present MS face
a decline in mail volumes, especially with respect to 1st class mail. It is widely expected
that the decline will go on touching all postal markets in the existing and future
Community in the medium term.
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269
Objective level
Compatibility of domestic and cross-border transit time: D+1 services in Spain and
some AC
In order to ensure compatibility between the intra-Community and the domestic

transit time objectives Spain should consider the introduction of a D+1 service with
corresponding transit time objectives. The incentives set by the REIMS agreement
and the Postal Directive seem to be not sufficient to ensure the compatibility. It is
highly probable that the introduction of D+1 service would require additional
investments in the Spanish postal network. Due to these potential cost and price
effects information about Spanish customers needs and their willingness to pay
should be evaluated. Because of the very low price level for Spanish postal services
it is quite possible that Spanish postal customers are interested in a D+1 service
even it would be more expensive than the current D+3 service.
Implementation of harmonised D+1 objectives
The harmonisation of domestic transit time performances of 1st class letters is partly
driven by the intra-Community cross-border objectives due to the compatibility
requirement of the Postal Directive. Additionally, current and expected competitive
pressure has induced improvements in transit time partly as a side effect of the
modernisation of the national postal networks. Against the background of countryspecific conditions with respect to degree of competition, geographical issues and
customers preferences harmonised D+1 objectives are not recommended.
Implementation of supplementary reliability objectives for 1st class mail (e.g. D+2 or
D+3 objectives)
Due to compatibility requirements of the Postal Directive not only objectives with
regard to the speed of postal services but also to their reliability could be taken in
consideration on national level. All MS have set objectives except for four. Even
without a domestic transit time objective their cross-border transit time performance
meets the D+5 objective. In case D+1 performance at domestic level and D+3
performance at cross-border level is already good, regulatory objectives seem not
be necessary in order to be compatible.
With respect to the AC a supplementary reliability objective, but at least the
measurement and the publication of the performance would inform the postal
customers about the reliability of postal services. Against this background the
information itself has a value. Additional costs due to measurement are not
expected in case it already takes place. According to EN 13850 the transit time
performance has to be measured up to 30 days.
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Setting national objectives for parcels in all MS (potentially limited to the main parcel
services used by consumers and small business customers)
In half of the MS and AC regulatory transit time objectives have been set. They are
characterised by a great variety. Moreover, in every country parcel services are
outside the reserved area and important segments of the market are under
competition. Usually, consumers and small business customers have to rely on
parcel services offered by the USP because of differences in price levels and more
suitable access conditions (post offices). Nonetheless in most countries spill-over
effects from the competitive segments to the less competitive segments can be
observed. The application of the tracking and tracing technology of standard parcel
services is an example.
Against this background regulatory transit time objectives in every MS are not
considered as necessary. Because of the different market conditions on national
level the countries themselves should decide whether regulatory transit time
objectives in particular for parcels demanded by consumers and small business
customers are necessary.
Transit time objectives for other domestic postal services than priority mail and
parcels
Other universal services than the priority services are characterised by a large
variety of objectives and performances. They range from no objectives at all to
objectives for all universal services. Even in case that transit time objectives are set,
the levels are very different in terms of days (D+2, D+3 ..) and percentages.
Similarly to the parcel services, newspapers and magazines are not part of the
reserved area and in some countries even not part of the universal services.
Furthermore, these services are used by relatively large mailers (publisher). Besides
the transit time requirements of newspapers and magazines strongly depend on
their publication dates (daily, weekly, monthly). Therefore not only one but a couple
of objectives would be necessary. Because of the relatively small but often wellorganised group of publishers private arrangements between the mailers and the
USP would principally be the better way to handle their individual needs.
Direct mail services if specifically provided are mainly used by large mailers.
Furthermore, within the MS the degree of competition with regard to direct mail
services differ. In some countries theses services are not part of the reserved area.
Private arrangements between the mailers and the USP are usual. Consequently, in
our view the MS themselves should decide whether regulatory transit time
objectives for newspapers and magazines as well as direct mail services should be
set dependent on their specific needs.
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In case of 2nd class services the situation is slightly different. In most of the MS and
AC where 2nd class services consumers and small business customers also use
these services. In the majority of these countries regulatory objectives are set and
measured. Against this background there is no need for action.
Performance level
Improving domestic transit time performance for 1st class mail in existing and future
MS
In some MS, in particular Belgium and France, the current transit time objectives
have not been achieved over years. Although, the compatibility with the current
cross-border objectives seem to be guaranteed.
Nonetheless, low-performing USPs should consider to improve their transit time
performance. Furthermore, customers needs should be taken into account in order
to identify if necessary investments in the national postal networks can be potentially
financed by higher prices. This is also valid for the AC who are at the beginning of
the catch-up process.
6.2.2.1.3 Measurement level
Application of relevant transit time measurement standards for single-piece items

developed by CEN in all present MS as well as AC (EN 13850 and EN 14508)
Reliable and fairly comparable measurement methods are a necessary precondition

to get reliable information about the actual transit time performance. In particular, it
should be guaranteed that the method is free of arbitrary changes. The developed
CEN-standards for transit time measurement provides a suitable basis and should
therefore be applied by all present MS as well as AC as far as domestic 1st and 2nd
class single-piece services are provided.
Cross-border 2nd class single-piece services are characterised by decreasing
volumes. In general, the importance of 2nd class single-piece items is very low. In
case that the transit time is already measured by some USPs it should be
considered to relax the statistical requirements in case of cross-border single-piece
2nd class items due to the measurement costs.
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Enhancing the flexibility of the CEN standard EN 13850 with respect to statistical
accuracy
There is a need for measuring the domestic and the cross-border transit time of at
least 1st class mail services. Moreover the cross-border transit time should be
measured on all country-to-country relations. In order to balance between cost of
measurement on the one hand and reliable performance figures on the other it
should be considered to relate the statistical requirements on the mail volumes per
flow. CEN/TC331 is already working on this issue supported by a Commission
mandate and funding.149
Application of the transit time measurement standard for bulk mail developed by
CEN (EN 14534)
Bulk mail in general comprises a large number of postal items having similar
characteristics which are posted by a single sender at the same collection point.
Bulk mail can be sent as 1st, 2nd class, direct mail, magazines or newspapers
dependent on the product portfolio of the national USP. A clear definition of bulk
mail with respect to the number of postal items is not provided in the recently
adopted standard.
The USP as well as the mailers are very interested in measuring transit time of bulk
mail. A standard supports the transparency and reduce the risk of arbitrary changes
in the method. Therefore the adopted standard should be applied in case bulk mail
is covered by regulatory objectives.150 In case voluntary measurement takes place
the application of this standard is recommendable, too.
Development of a transit time measurement method for parcels services (tracking &
tracing)
The transit time of parcels can be measured by using the track and trace
technology. Thus, it can be expected that the measurement costs are relatively low.
Technical problems could arise with respect to cross-border parcels because the
national USPs apply different tracking & tracing technologies. This issue is already
addressed by the CEN/TC331 working group 3 (addresses and automatic
identification of items). Thus, transit time measurement of domestic and crossborder single-piece parcels seems to be an appropriate measure in order to get
information about the reliability of a parcel service.
149 Standardisation mandate M/312: Extension of the existing standards on the new EU members.
150 The subject if regulatory transit time objectives for bulk mail in general are necessary is discussed in
section 6.2.2.1.4.
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6.2.2.1.4 General limitation of transit time objectives on single-piece items

The transit time objectives of cross-border and the majority of 1st class mail services are
subject to single-piece items as well as bulk mail. Consumers and small business
customers mainly post single-piece items while bulk mail is posted by a relatively low
number of large mailers. Against this background it can be questionned whether there
will be a need for transit time objectives independent on the affected customer group in
future.
As long as main parts of the domestic and cross-border letter mail market are provided
under monopoly the transit time of both mail flows should be measured. Furthermore,
the MS should take into consideration to separately publish the performance figures for
single-piece on the one and bulk mail on the other hand. Differences in the
characteristics (e.g. presorting) and the treatment of these mail flows (especially with
respect to the collection) may result in significantly different transit time performances.
When using a volume weighted average these differences would be concealed.
With ongoing liberalisation of the letter mail markets by stepwise reducing the price and
weight thresholds the position of large mailers might be changed. In our view it is highly
probable, that in particular large mailers would gain from market opening.151
Regarding cross-border postal services the legal monopoly of outgoing cross-border
mail is already abolished with the amendment of the Postal Directive. Due to the
complete liberalisation of the outgoing cross-border mail it is highly probable that the
competitive pressure forces the USP (in the country of origin) to provide a satisfying
transit time performance. It could even be the case that this pressure is transferred to
the cooperation partner (USP) in the country of destination by contractual
arrangements.
With increasing competition especially large mailers will be more and more able to
protect themselves by private arrangements with the USP. Thus, latest after the
complete liberalisation of the postal market the limitation of domestic and cross-border
transit time objectives to single-piece items which are mainly used by consumers and
small business customers shall be taken into consideration.
151 The Swedish experience indicates that such a development can be expected under liberalised
conditions, too.
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6.2.2.2 Other important QoS issues

Objective level
Satisfying requirements for the access to the postal network
In all countries rules about the number and/or density of access points are set. The
range goes from general statements (sufficient number of points) to clearly defined
requirements with regard to area and population criteria.
Consumers and small business customers who represent a relatively small share of
mail volume usually have to rely on these access points whereas large mailers have
additional possibilities to send their mail. Currently and in the future especially with
regard to the full liberalisation of the postal markets the USPs have a strong
incentive to reduce the number of access points in order to save costs.
As a result there might be an additional need in the future for balancing between the
customers needs on the one and the resulting costs with respect to the access
conditions on the other hand. Therefore this issue should be carefully observed in
the next years. A suitable measurement method would additionally support the
monitoring of access conditions (see under measurement level).
Regulatory requirement for customer satisfaction surveys
The regulatory authorities and the USPs have a strong incentive to get information
about customers needs and their satisfaction with current postal services. Such
surveys are additional sources of information for regulatory decisions on the one
and market strategy decisions on the other hand. Against this background nearly all
USPs make use of such surveys,152 so that a regulatory requirement is not
necessary in our view. Most regulatory authorities usually do not conduct general
customer satisfaction surveys.
Measurement level
Enforcing the application of a measurement standard for complaints and redress

procedures
Customers shall be encouraged to make complaints if USPs apply easy and lowcost procedures. Furthermore, the USPs could use the information to monitor their
service performance. The application of EN 14012 supports a transparent and
simple treatment of doing so within the Community. With respect to cross-border
services the co-operation between the concerned USPs should be improved.
152 Even ELTA, the Greek USP intends to make use of this instrument (statement in the interview).
Final Report
275
Besides corresponding rules in the REIMS agreement similar complaint

management systems in all MS may make it easier to implement such a cooperation. Furthermore, implementing EN14012 should be feasible as the method
was developed by consensus of the industry stakeholders within CEN/TC331. In the
MS all responsible organisations have already implemented a complaints system
which have to be adapted according to the standard. For the AC this standard could
be a suitable guideline in order to introduce such a system.
Application of the CEN standard for the measurement of loss of registered items
(EN 14137)
The implementation of the standard for measuring the loss of registered items
should be enforced.
Development of a standard for measuring loss and substantial delay of priority and
1st class single piece mail
Measurement of lost items is an important issue in the view of the customers

(additional indicator for reliability). It is very costly to get statistically accurate results.
This shortcoming could be avoided by measuring substantial delay (e.g. D+10 or
15) as by-product of the transit time measurement. In order to reduce the risk of
excessive reactions, confidential notes to the NRA instead of publication should be
taken into consideration. Thus, the activities within CEN/TC331 for the development
of a TS experimental standard should be supported.
Measurement of access and delivery conditions
The access and delivery conditions are strongly linked with the transit time
perception of senders and receivers. This perception does not necessarily
correspond with the applied measurement method of transit time. In general, the
measurement method merely reflects the operators view. Therefore the published
transit time performance is not affected even if the collection or delivery time is
changed. As already stated, USPs have a strong incentive to reduce the number of
access points in order to save costs. Clearly defined measurement methods would
help to monitor changes in the access and delivery conditions over time.
Therefore, it is recommendable to develop and implement suitable standards in
order to support a transparent analysis of access and delivery conditions.
276

6.2.2.3 Incentive structure
Enforcing the publication of QoS objectives and performances as well as relevant

information about the measurement methods
The objectives, related performance as well as principles of measurement should be

published regularly. This is already required by the Postal Directive. Currently the
way and the structure how these information have to be provided differ between the
countries. The application of CEN-standards will support a higher transparency in
the structure of measurement results.
Nevertheless, it has to be ensured that regular, complete, and transparent
information will be provided by the responsible institutions (e.g. USPs or NRAs).
More QoS-oriented sanction mechanisms: price-quality link
The survey reveals that the sanction systems implemented on MS level are often
not as transparent as necessary. The relation between sanctions and missing QoS
objectives and requirements seems not to be clearly defined in some countries.
Linking the QoS performance to price regulation would be a possibility to ensure an
effective control of the QoS requirements and objectives. The MS and the AC
should take this form of target-oriented regulatory measures into consideration.
6.2.2.4 Involvement of postal customers

Regulation as a substitute of missing competition should take the customers and
consumers needs into consideration. The focus of regulation should lay on those
customer groups which are not able to get private arrangements with the USPs
meaning consumers and small business customers.
The low return rate of questionnaires reflects the problems of especially this customer
group to articulate their needs. Consumer associations must handle a lot of consumerrelated problems with services which are more important in means of the consumers
budgets than postal services. In most countries associations for postal services with
enough experiences and manpower does not yet exist (like Postwatch in UK or
Postkundenforum in Germany). Furthermore these associations face strong financial
restrictions in most cases.153
With respect to large mailers there are several well-organised associations on national
as well as on Community level who are very active and competent in postal issues.154
The importance of postal services is much higher in means of their budgets than in case
153 Perhaps with exception of Postwatch which is financed by Royalmail.

154 Like FEDMA, EMOTA, FAEP on European level and numerous direct marketing, publisher, and mail
ordering associations on national level).
277
Final Report
of consumers and small business customers. Furthermore, their interests are more
homogeneous and clearly expressed.
Nonetheless the universal service obligation is mainly set in order to protect the less
powerful, but numerous consumers and small business customers. Their needs should
therefore be identified by the legislator and the regulatory authorities. Against the
background of the future postal market development and related risks mainly
concerning consumers and small business customers, the involvement of these
associations should be supported especially on national level. This implies the following
recommendations:
Objective level
Institutionalised involvement of postal customers in setting QoS objectives
In order to enhance the importance of customers needs in the process of setting

QoS requirements and objectives their involvement should be institutionalised. The
procedure how to manage this involvement highly depends on the cultural and legal
history of a country. Nonetheless, in our view transparent and open procedures
should be preferred.
Measurement level
Institutionalised involvement of postal customers

measurement standards (especially on CEN-level)
in
the
development
of
In the past the applied measurement methods and even those developed on CENlevel are more or less operator-oriented. This one-sided view was partly caused by
the fact that consumer associations were often not represented in the respective
working groups. Most of these associations are not aware of CEN. But even if they
are informed they often do not have the manpower which guarantees a qualified
participation. The foundation of the CEN/TC331 customers needs task force is a
step in the right direction. But even this task force is not dominated by
representatives of consumer associations.155 This also reflects the low degree of
awareness of CEN work.
Moreover, consumer and customer representatives should be more involved on the
level of the CEN working groups.156 As this work is even more time-consuming than
the work on the level of the customers needs taskforce it is very difficult to find
appropriate participants.
155 Besides European customer associations like ANEC and FEDMA, representatives of PostEurop, and
especially of upstream industries take part.
156 E.g. ANEC has actively accompanied the development of EN 14012 (measurement of complaints and
redress procedures).
278
6.3

Level of implementation
In the last section numerous different recommendations on QoS objectives and

requirements, performance and measurement issues have been derived. The next step
is to discuss how these recommendations should be implemented.157
Firstly, we address the geographical level of implementation distinguishing between the
Community and the national level. Secondly, we analyse how to implement the
recommendations. The range goes from clearly defined new or adjusted objectives in
the Postal Directive (Community level) or in national postal law (hard regulation) to
general requirements and recommendations without obligatory character (soft
regulation).
In the subsequent sections the recommendations are attributed to the Community or
national level. Furthermore, they will be differentiated dependent on their content
(objective, performance or measurement issue). Most of the recommendations can be
characterised as soft regulation.
6.3.1 Regulation on Community level
6.3.1.1 Objective/requirement level
Enhancement of the cross-border transit time objective (D+5)

The adjustment of the D+5 objective can be conducted without changing the Postal
Directive. Only changes of the Annex would be necessary. According to Article 16
these standards can be adjusted to technical progress or market developments by
decision of the Postal Directive Committee.
Enforcing the regular and easily available publication of objectives and performance
figures on MS- and AC-level
The Commission should enforce this requirement according to Article 16 and 19 in
all existing and future MS. The Postal Directive Committee should discuss the
possibilities of how and where the publications should regularly take place. The
adopted CEN standards provide clear definitions about the structure of information
which has to be published.
157 According to the survey results the majority of USPs (MS) prefer voluntary agreements for all QoS
dimensions even for domestic and cross-border transit time. The NRAs clearly prefer regulation on
national level with exception of cross-border transit time. The majority of USPs of the AC prefer
regulation on national level whereas the opinions of the respective NRAs are mixed. For details
please see appendix AC.
Final Report
279
6.3.1.2 Measurement methods

With respect to measurement methods developed on CEN-level, standards can be
applied voluntarily or in order to fulfil a regulatory requirement. The Postal Directive
Committee is responsible for this decision at Community level. In case a CEN standard
is defined as standardised conditions in the meaning of the Postal Directive, each
USP or NRA who measures the respective QoS dimension (e.g. transit time) voluntarily
or by regulatory requirement has to apply this standard (however, it should be noted
that the decision to define a certain CEN standard as standardised conditions in the
meaning of the Postal Directive does not, as such, create a regulatory obligation to
measure the corresponding QoS aspect; it simply requires the standard method to be
used, if the corresponding QoS aspect is measured). The following recommendations
can be attributed to this subject.
Enforcing the implementation of EN 13850 (end-to-end transit time measurement for

1st class single-piece items) for cross-border and domestic transit time
measurement. The AC should also implement this measurement standards but they
need a transition period of at least 2 years.
Application of the recently adopted EN 14508 (transit time 2nd class) and 14534
(transit time bulk mail) as well as EN 14137 (loss of registered items). Both
standards should be subject to a Postal Directive Committee decision.
Deciding whether the EN 14012 standard (measurement of complaints and redress

procedures) shall become part of the standardised conditions in the meaning of
the Postal Directive and thus implemented in the MS. The AC should also
implement this standard but they need a transition period of at least 2 years.
Development of reduced statistical requirements for low-volume cross-border mail

flows between the present MS as well as between the AC and between the AC and
MS as already under development within a new work item of CEN/TC331.
Development of a measurement method with respect to parcels mainly used by

consumers and small business customers as already underway within a new work
item of CEN/TC331.
Development of measurement method with respect to loss of non-registered items

as already underway within CEN/TC331.
6.3.2 Regulation on national level

Some of the derived opportunities are related to the country-specific situation. The
opportunities are based on the insights of the comparison of the status quo in the
Member States on the one hand and the analysis on the other hand. Best practice can
280

be considered as a pragmatic approach in order to derive recommendations subject to

QoS objectives and requirements based on the results of a comparative analysis. If
particular QoS requirements are identically set in several MS and since they contribute
to a satisfying situation, it could be taken into consideration to transfer these
requirements to other MS, too. By applying such a best practice method it should be
kept in mind that the comparability of the national situations is a necessary condition in
order to derive recommendations based on best practice considerations.
6.3.2.1 Objective/requirement level
Spain should consider to introduce a D+1 service with related regulatory transit time
objectives in order to ensure compatibility with the Postal Directive. The assessment
of the compatibility between domestic and cross-border transit times on the one
hand and the fact that the other 14 MS have a D+1-service (best practice) on the
other hand support this recommendation.
Latvia and Slovenia should implement regulatory D+1 objectives in order to support
compliance with the Postal Directive.
The implementation of supplementary reliability objectives for 1st class mail should
be considered in the AC and the MS, especially in case that the domestic D+1 and
the cross-border D+3 transit time is underperforming.
Depending on the competitive environment and positive spill-over effects, the MS

and AC should verify whether the introduction of objectives for parcels is necessary.
Existing MS and AC should assess the opportunity to link price regulation and QoS
objectives (best practice).
6.3.2.2 Performance level
The MS, especially Greece and Spain, shall ensure that the cross-border transit
times on those relations which are currently underperforming with respect to D+3 as
well as D+5 objectives will be improved.
Low-performing MS and AC should ensure further performance improvements (in

particular Belgium, France, Greece, Austria).
Final Report
281
6.3.2.3 Measurement
It should be considered whether the statistical requirements should be reduced in

case of very low domestic mail volumes even for a transition period (especially in
Lithuania and Latvia).
All AC must implement independent performance monitoring, both at cross-border

and national level as required by the Postal Directive.
All MS and AC have to implement the CEN standards defined as standardised

conditions in the framework of the Postal Directive Committee. Currently, it is only
valid for EN 13850 (transit time measurement of 1st class single piece items).
6.4
Next steps
This study is not able to answer all relevant open questions. Therefore, there is a need
for more information and discussion about the below listed subjects. Based on these
results changes in the regulatory frameworks on Community as well as national level
could be more easily justified as currently possible.
Consumers needs and interests should be identified on national and Community

level
Especially the involvement of consumer associations should be strengthened. Due

to the presence of BEUC and ANEC and the recently implemented CEN customers
task force it is less problematic on Community level. But on national level there is
lack of participation mainly caused by the workload of these associations. Postal
services are not an important factor in the consumers budget as e.g.
telecommunication services or other services of public interest (electricity, water,
railway).
Due to the low participation of consumer and customer associations we have not
been able to derive recommendations for all issues e.g. a strong enhancement of
cross-border transit time objective or the harmonisation of domestic transit time
objectives. Changes in the regulatory framework which are linked to significant cost
and price effects can only be recommended if actual and potential postal customers
strongly wish this change. Otherwise it is unclear if the cost effects can be
outweighed by corresponding benefits on the customer side.
Therefore, it is very important that business customer but especially consumer
associations will be more involved in the discussion about the future regulatory
framework (including objective and requirement setting as well as the development
of measurement methods) of the postal sector. This is valid for the MS but even
more for the AC.
282

Identification of transition periods of the AC in relation to intra-Community crossborder transit time objectives (if any)
With respect to the AC, especially the Baltic countries, Poland and Cyprus, specific
transition periods should be identified. In the coming months and years most of
these countries need additional support in order to modernise the organisational
structure of their postal networks. Furthermore, reliable measurement systems
should be implemented as fast as possible. The performance figures are a
necessary input for identifying the transition periods of these countries. Furthermore,
clear information about their main problems within the postal value chain is a
precondition to effectively and successfully reorganise their postal networks.
Furthermore it would help to improve their reputation as reliable postal service
provider in the medium and long term.
In case that financial restrictions mainly impede the implementation of suitable
measurement systems external financing by UPU or EU funds should be taken into
consideration.
Discussion about relaxing the statistical requirements for transit time measurement
in case of very low mail volumes (domestic as well as cross-border services)
A new work item of CEN/TC 331 about the extension of existing standards on new
EU members is dealing with this question. Representatives of the AC NRAs and
USPs should participate in this work item. It is in the interest of the AC to solve
these measurement-related problems as quickly as possible. The quicker the
methods can be applied the earlier the USPs would be able to identify the main
problems of their postal networks.
Enforcing the implementation of the measurement standard for complaint and

redress procedures (EN 14012)
The provided assessment of potential opportunities is based on the current situation

within the existing and the future MS. As already stressed, there are ongoing changes
in the postal markets due to numerous challenges like liberalisation and changes in the
customers preferences. In particular the adaptation of the postal infrastructure in the
AC to the changes induced by the enlargement process is in full swing. Furthermore,
the application of the CEN standards will provide more reliable and comparable
performance figures in future. Thus, a review of the situation in the present MS and the
AC should be taken into consideration at a later stage.
Final Report
283
References
CEN/TC331 (2002), Working Group 1, Mandate M312: Extension of existing standards to new
EU Members, Report from Subgroup.
ComReg (2003), AN Posts quality of service: domestic single piece mail, document no. 03/58.
Correos y Telegrafos (2001), Annual Report.
CTcon (2001), Study on the conditions governing access to universal postal services and
networks.
Ducasse, Jean-Philippe (2003), Presentation about QSF, issues and challenges for Accession
Countries, held in Brussels 12.-13.3.2003.
Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on
common rules for the development of the internal market of Community postal services
and the improvement of quality of service (OJ L15, 21/02/1998 p14) amended by
Directive 02/39/EC of the European Parliament and of the Council of 10 June 2002
amending Directive 97/67/EC with regard to further opening to competition of
Community postal services (OJ L176, 05.07.2002 p.21).
Eurobaromtre 58 (2002), Lopinion des consommateurs sur les services dinteret general,
European Commission, DG Sant et Protection des Consommateurs, edition speciale.
European Commission, DG Internal Markets (2002), Implementation of the EN13850:2002 CEN
standard.
European Commission (2003), Notice pursuant to Article 19(3) of Council Regulation No 17,
Case Comp/38.170 REIMS II Terminal Dues, Official Journal C 94/03.
IPC (2003)), Improving the Quality of International Mail, Years Results 2002.
IPC (2003), UNEX Lite Pre-Accession, Quality of service Monitoring, Full Year Results 2002.
Noam, Eli M. (1991), The Quality of Regulation In Regulating Quality: A Proposal for an
Integrated Incentive Approach to Telephone Service Performance, in Einhorn, Michael.
(ed.), Price Caps and Incentive Regulation in Telecommunications.
Omega Partners Ltd. (2001), Study on the Impact of Certain Aspects of the Application of the
Directive 97/67/EC on the Postal Sector.
sterreichische Post (2002), Presseinformationen Oktober.
Regulierungsbehrde fr Telekommunikation und Post (RegTP) (2002), Annual Report.
WIK-Consult (2003), Survey on some main aspects of postal networks in EU Adhesion
Candidate Countries.

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wik-Consult Final Report

Study for the European Commission

Quality of Service Objectives,

Bad Honnef, August 2003

The views and opinions expressed in this study

List of acronyms and abbreviations

Background and purpose of the study

Scope and methodology

Main results of the analysis

Recommendations and next steps

1.1 Background and purpose of the study

1.2 Outline of the study

2 Scope and methodology of the study

3.1.1 Postal Directive (Directive 97/67/EC amended by Directive 2002/39/EC)

3.1.2 Technical standardisation by CEN/TC331

3.1.3 UPU: Quality of Service Fund, objectives and measurement issues

3.2 The national QoS framework and performance in the EU

3.2.1 Product portfolio of the national universal service providers in the EU

3.2.2 Definition and setting of national QoS objectives in the EU

3.2.3 Performance and measurement of QoS in the EU

3.2.4 Consequences of missing quality of service objectives

3.2.5 Publication of quality of service issues

3.3 National QoS framework and performance in the Accession Countries

3.3.1 Universal postal services and other services

3.3.2 Objectives, performance, and applied measurement methods

3.3.3 Consequences of failure

Quality of Service Objectives, Performance and Measurement

3.3.5 Status of QSF concerning the Accession Countries

3.4 Summary: status quo and resulting opportunities

3.4.1 Legal transposition of the Postal Directive

3.4.2 Scope and depth of QoS regulation

3.4.3 QoS performance

3.4.4 Sum-up: Potential adjustments of intra-Community and national QoS

4 Analysis of QoS regulation on national and Community levels feasibility of

4.1 Transit time

4.1.1 QoS regulation, costs and demand for postal services

4.1.2 Analysis of objectives and performances

4.1.3 Objective definition and compatibility on national and Community level

4.1.4 Transit time and demand

4.2 Measurement of Quality of Service

4.2.1 Transit time measurement of single-piece items

4.2.2 Transit time measurement of bulk mail

4.2.3 Loss and damage of mail

4.2.4 Treatment of complaints

4.2.5 Customer satisfaction surveys

4.2.6 Standardisation perspectives

4.3 Deriving feasible opportunities for future QoS policies

5.1 Development of the EU postal markets: from monopoly to competition

5.2 Rationale for QoS regulation

5.2.1 QoS regulation in monopolistic markets

5.2.2 QoS regulation in competitive markets

5.3 Consequences for QoS regulation in (stepwise) liberalised postal markets

6 Conclusions, policy guidelines and recommendations

6.2 Policy guidelines and derivation of recommendations

6.2.1 Policy guidelines

6.2.2 Derivation of recommendations

6.3 Level of implementation

6.3.1 Regulation on Community level

6.3.2 Regulation on national level

6.4 Next steps

Quality of Service Objectives, Performance and Measurement

Number of distributed questionnaires and return

Weight limits of the universal service (in kg)