The Productivity Analysis of Postal Services

Abstract

In Japan, the Postal Services Agency¹ has provided monopolistic postal services for more than one hundred years based on Article 1 of the Postal Law, which stipulates, “the objective of postal service is to enhance public welfare by fairly providing postal services at the lowest possible rate on a nationwide basis.” Institute for Posts and Telecommunications Policy (IPTP) and Ministry of Posts and Telecommunications (MPT) (2000) clarified the purpose of Japan’s postal universal services specifically as “to deliver letter-postcard items and parcels accepted through post boxes or post offices throughout the country, with the lowest possible rate and on a nationwide basis to each doorstep.”² However, in 2003, Japan’s postal operation is scheduled to shift from the Postal Services Agency to a new state-run corporation with a more flexible management structure, and the letter-postcard delivery will be fully opened to private companies. Postal administrations in many industrialized countries will also be facing diminishing reserved areas and increasing competition with new entrants to newly liberalized postal markets. For postal services to fulfill their universal service obligation (USO), the postal administrations around the world are expected to focus on increasing operational efficiency and productivity to preserve a fair and affordable postal rate.

The content of this paper is solely the authors’ opinion and does not reflect official opinions of the Ministry (MPHPT) and the organizations to which the authors belong. We thank Frank Wolak as a discussant in the 9th Conference on postal and Delivery Economics held in Sorrento, Italy. We also thank Michael A. Crew and paul R. Kleindorfer for giving us beneficial comments to a draft.