The relevance of one single postal network: Challenges and opportunities

Published 23.05.2019 00:13
The relevance of one single postal network: Challenges and opportunities

The Universal Postal Union (UPU), established in 1874 with the intent of having one single postal territory covering the entire world and thus reducing the difficulties arising from mutual agreements between countries, is known today as one of the most widespread intergovernmental institutions in the United Nations. Since its foundation, it has been serving the global community through one single network regardless of any political, military or economic circumstances.

However, it has recently faced some vital challenges concerning the future of the union such as the withdrawn claim by the U.S. Postal Services. Together with member countries, the International Bureau of the UPU continues to build trust, sincerity, commitment and compromise within the UPU for the benefit of humanity. There is a firm belief to build even greater unity, promote negotiation and cooperation between members within a framework of mutual respect. Notwithstanding the size and geography, the UPU is striving to reach out to all postal operators to involve them in its activities based on the objectives of promoting accessibility and connectivity to the global postal network.

The major obstacle

Today, the single postal territory goal, which is a must, is facing difficulties due in no small part to economic and commercial challenges. This mainly stems from the terminal dues system that defines the remuneration between member countries in terms of the level of development. At this point, it is a well-known fact that traditional mail is being replaced by small packets.

The rise of e-commerce was a real turning point for the whole postal industry, and the topic itself was addressed at the 26th UPU Istanbul Congress, held in Turkey in September and October 2016. In those days, the postal world was experiencing a sharp change, and the business was evolving ever more rapidly from letters to merchandise.

As a result, both the Integrated Product Plan and Integrated Remuneration Plan covering terminal dues and inward/inbound land rates were among the key decisions brought to the attention of the members. After long-standing negotiations, a new terminal dues system was agreed upon by the member countries. Terminal dues, the cross-border remuneration system in other words, applies to letters and small packets up to 2 kilograms, which meant to reimburse posts for taking care of mail from overseas.

The Integrated Product Plan's broad objectives were to clarify the content of postal items as documents and goods, to eliminate different remuneration systems such as TD, ILR, EMS and therefore to reveal one single applicable system. A lot of work was carried out during plenaries and related committee meetings but the sharp contrast between small packets and letter post has not been ensured. Consequently, small packets remained in the classification of letter post, subject to terminal dues. The solidarity spirit at the congress aimed to meet the concerns of the members and therefore get all countries into one group so that every member country applies the same rules and pay destination country-specific rates.

At this point, the U.S. Postal Service has been striving to solve such an important issue that has a direct effect on its revenues for years. From this point of view, on Oct. 17, 2018, the U.S. Postal Service notified the UPU of its intent to withdraw from the organization. This important issue was brought to the attention of member countries during the POC and CA meetings at UPU Headquarters in March/April.

Now, the UPU senior team is cautiously dealing with the issue. Apart from steady negotiations with the government of the United States of America and the U.S. Postal Service, the UPU is holding consultations with members by force of the UPU spirit of single postal territory serving the whole community under all circumstances. After all these efforts aiming to ensure unity, it was becoming necessary to hold an Extraordinary UPU Congress to solve the issue with deep care. The voting process is going on to determine whether to convene, and this crucial gathering is expected to be organized toward the end of 2019 without losing further time.

Ecom@Africa Initiative

While dealing with such vital challenges, the UPU, as the U.N. specialized agency for the postal sector, is developing region and continent-specific projects based on the advancement of the e-commerce business.

It is believed that having efficient and operational e-commerce services empowers socio-economic development. The UPU has regularly emphasized that posts are still relevant and can be key players in making a significant contribution to socio-economic development through its extensive surveys and reports covering the whole world.

In addition, it was the UPU that developed the 3I principle as a whole — innovation, inclusion and integration — and revealed the role of posts in today's societies. Any postal administration that successfully completed its digital transformation can be a catalyst of the national economy and have an enormous impact on the ones who are excluded from the financial and social system.

According to the UPU Report, "The Digital Economy and Digital Postal Activities — A Global Panorama," some 93 percent of posts currently provide digital postal services either directly or by outsourcing through other companies within the industry.

It is well known that posts have one of the most efficient service networks that cover the whole country and therefore are very well positioned to provide all kinds of postal, financial, e-commerce, insurance and banking services to populations. Based on this capacity, posts are reaching excluded ones such as women, the poor, the less educated, those living in desolated areas and those in the informal economy. Each UPU project gathers all these different aspects and objects under a single roof. Ecom@Africa is among the most important examples of this capacity.

In accordance with the UPU Istanbul Congress deliverables, the UPU International Bureau was instructed to develop projects and programs that promote and strengthen the capacity of members' postal operators to provide integrated e-commerce services. In line with this, the Istanbul World Postal Strategy (2017-2020) also clearly underlined the significance of e-commerce to the development of digital postal services. Being a key player in e-commerce by using the existing infrastructure, extensive network and core services such as virtual e-commerce platform, payment and delivery/logistics solutions, posts can trigger economic development and social welfare.

Aims of the project

In parallel with this purpose, the UPU launched the Ecom@Africa project in November 2016 to reach forgotten lands by using the global postal network with its vast geographic reach and multi-dimensional service channels.

According to the official statement made by the UPU, the project aims to establish a fully integrated cross border e-commerce ecosystem provided by African postal operators over physical e-commerce hubs interfaced with virtual shopping platforms backed by the UPU technical expertise and IT tools.

The project-specific concept and methodology was developed by the technical team between November 2016 and March 2017. The initial negotiations started in December 2016 with the South African Government, Department of Transport and South African Postal Authority.

In March 2017, Tunisia was the second destination of the UPU technical team to have an onsite scoping visit and reveal the potential of Tunisia as a central e-commerce hub in the region. The first agreement was signed between Tunisia and the UPU in July 2017, which is considered as the cornerstone of this initiative.

At that time, the Turkish Post Corporation was holding negotiations both with the Tunisian Ministry of Communication Technologies and Tunisian Post to have an e-commerce service corridor between both countries and beyond. The Tunisian Government, Ministry of Communication Technologies and Tunisian Post have made significant progress in terms of planning and investment in e-commerce logistics and virtual shopping platform.

Since this important step, the UPU senior team has held further talks with Ivory Coast, Ethiopia, Kenya, Cameroon, Morocco and Tanzania. Agreement negotiations go on with South Africa and Kenya. The agreement has already been signed with Tunisia, Ivory Coast and Ethiopia. There is an ongoing implementation with Tunisia, South Africa, Ivory Coast and Ethiopia. On March 2019, another important agreement was signed with Ecommerce Europe.

At a political level, the first high-level extensive ministerial meeting took place on March 29 in Geneva in coordination with the UPU. The Tunisian minister of communication technologies; the Ivory Coast minister of communication, digital economy and the post; the Ethiopian minister of innovation and technology; the UPU senior team; ambassadors and Geneva permanent representatives of Kenya, Morocco, Tanzania, Ivory Coast, Tunisia and Ethiopia actively participated in this meeting.

Due to the rural elections in Turkey, Turkey was represented by its postal representative, the Turkish Post and Telegraph Corporation and the Permanent Mission of the Republic of Turkey to the U.N. Office at Geneva. The presence of Turkey at the table was considered as insurance for the project.

Turkey had the opportunity to share its expertise on e-commerce with participants, and the briefing attracted considerable attention. At the end of the meeting, it was decided to have the final high-level meeting in Turkey to see Turkey's potential and e-commerce expertise in place.

In light of these developments, it is obvious that the UPU attaches great importance to the involvement of governments. This is what really adds another dimension to the Ecom@Africa project.

Without governments, related ministries and national institutions, it would be a simple business oriented project. But here, on the contrary, the attitude and the approach created through this project meant the extraordinary capacity and potential of African nations, collective cooperation, solidarity, synergy, commitment and excitement of African people. The rich continent but the poor Africans perception could be changed through such initiatives and now Africa has a story to write and to believe in.

Turkey: Hub of the future

Based on investments made in recent years, Turkey is expected to be the fastest-growing economy of the Organization for Economic Co-operation and Development (OECD) members during 2018/2019, with an annual growth rate around 5 percent. Substructure and superstructure investments strengthened Turkey's position in terms of international trade and logistics. Based on the information broadcast by the Investment Office of the Republic of Turkey, Turkey's unique location, which provides access to multiple markets of $25 trillion GDP, $7.8 trillion trade and 1.7 billion people, reveal an enormous business potential. This capacity was emphasized and confirmed in detail by the participants during the Geneva Meeting.

Thanks to the Justice and Development Party's (AK Party) humanitarian attitude toward the African continent and African people and the mutual relation established between Turkey and the African Nations, they want Turkey to be fully involved in this story.

For an e-commerce business, it is essential to have a virtual shopping platform, payment solutions and logistics/delivery services. Turkish Post is among the few postal administrations having its own e-commerce platform, which is called epttavm.

Following the Istanbul Congress, Turkish Post has started to focus more on e-commerce and concluded e-commerce specific agreements with 15 different countries. Most of these countries and Turkey are connected by strong historical, cultural and trade links. As an example, the turkishsouq initiative, which is an online shopping platform, serving Qatar, was developed with Qatar Post by using Turkish Post relevant technical expertise. Today, it has gained a real momentum for further growth, and it targets 5 million products in 2019.

On May 3, the second high-level meeting was held in Istanbul in coordination with Turkish Post. In accordance with the proceedings of the Geneva meeting of March 29, the Istanbul meeting, chaired by the Minister of Transportation and Infrastructure, underlined the importance of developing such an ambitious project for the use of African people by using Turkish Post's virtual shopping platform expertise.

In comparison to some local e-commerce service providers and the recently announced DHL virtual shopping platform initiative toward Africa, African producers will have the opportunity to sell their products worldwide through Ecom@Africa, which is going to be interfaced with Turkish expertise.

The main goal is to empower local African producers, farmers and small and medium-sized enterprises. Istanbul, as Turkey's HUB, was home again to another important postal gathering. Its role coming from the Istanbul Congress, Istanbul World Strategy and Istanbul CEO Forum reinforced with this achievement. An agreement proposing to use Turkish expertise on the e-commerce virtual platform in Tunisia was concluded between the Turkish Ministry of Transport and Infrastructure and the Tunisian Ministry of Communication Technologies.

E-commerce has to be the constant focus of Turkish Post. Based on the Qatari and Tunisian examples, ongoing implementation processes with the above mentioned 15 countries have to be finalized in parallel with the Ecom@Africa initiative.

The rich and humanitarian potential through the Ecom@Africa project has to be taken into consideration with deep care.

It is essential to remember the nature of this project, as African nations consider it as a milestone in the history of the continent. They strongly believe that this project will help them to teach something to the world instead of receiving. They believe that they can teach the world and tell the world that they can realize such an extensive project thanks to a global single postal network. Turkish Post has to complete its internal processes to be a postal power exporting its technical expertise on e-commerce.

* Employee at Turkish Post – Ph.D. candidate at Yıldırım Beyazıt University

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