International Mail: Information on Designated Postal Operators and Universal Service in Selected Countries

What GAO Found

Based on the information GAO obtained about postal service in 10 selected countries, 9 of the 10 countries formally selected their current designated postal operator either directly or indirectly via statute. All 10 countries have one postal operator registered with the Universal Postal Union (UPU).

All 10 countries include similar elements in their definitions of the universal service obligation, but have wide variation in how they implement elements of their universal service obligation. When defining their universal service, all 10 countries mentioned one or more of the following: the types of products to be delivered, pricing, or how often mail was to be delivered and collected. While all countries defined and implemented service as nationwide, the information we obtained also showed that each country implemented other specific elements of universal postal service differently: product range, consumer access, delivery and collection, pricing, and service quality. In addition to how countries define and implement universal postal service, GAO found information that indicated the selected countries also varied in how they fund universal service, either by requiring the designated postal operator to fund universal service out of its own revenues or by paying the designated postal operator out of public funds to cover those costs.

Each of the 10 countries has a government agency that regulates the country’s designated postal operators to ensure that these universal service obligations are met. However, based on the information GAO obtained, the countries use a variety of mechanisms to ensure this obligation is met. For example, all but one country publishes performance information for the designated postal operator, and 5 countries give the postal regulatory agency the power to direct postal operators to take actions to fulfill the universal service obligation or fine the designated postal operators if these obligations are not met.

Why GAO Did This Study

The United States Postal Service (USPS) exchanged 940 million pieces of mail with more than 190 countries in 2015.  This mail exchange generally occurs under agreements negotiated through the UPU, a United Nations agency that facilitates the exchange of international postal service. UPU’s member countries agree to ensure a right to universal postal service consisting of quality basic postal services over their entire territory at affordable prices, but each country can implement this obligation differently.  Additionally, each country can designate one or more postal operators to provide universal postal service. As a practical matter, countries without a mail delivery monopoly may have multiple postal operators that could provide universal delivery of letter mail. GAO was asked to examine how countries without a mail delivery monopoly select designated postal operators and assure that those operators can meet their universal service requirements. This report describes how selected countries without a mail delivery monopoly: (1) selected their designated postal operator; (2) define and implement their universal service obligation; and (3) seek to assure that designated operators meet the universal service obligation.

To select countries for our analysis, GAO used characteristics such as international mail volume, the extent of privatization of designated operators, and European Union membership status to provide a diverse sample of 10 countries that did not have a letter delivery monopoly and exchanged the most mail with the United States. To address these objectives, GAO reviewed information available on the national government agencies responsible for regulating their postal industry (the postal regulatory agency), designated operator websites, annual reports from postal regulatory agencies and postal operators, and information collected by the UPU from postal operators. GAO corroborated the information we obtained with USPS and U.S. State Department officials.