Report Strategy Conference Dubai Report En

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Universal Postal Union

www.upu.intwww.dubaiupu2006.com

Copyright Grand Hyatt Dubai

Laying the foundation of the future

UPU Postal Strategy

Report of the 2006 UPU Strategy Conference

Dubai, United Arab Emirates

14 16 November 2006


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The contents

The event 2

The opening and welcome 3

The keynote speakers 4

The postal sector and the Inormation society 5

Understanding the industrys challenges 7

The evolving postal network 10

New market players 13

Ensuring sustainable development o the postal sector 15

Governance 17

Regional approaches to meeting global needs 20

The uture role o the UPU 23

The conclusions 24

The strategic direction 28


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The event

Hailed as a huge success by the almost 800 participants, the Dubai Strategy Conerence laid the oundationsor the 2008202 World Postal Strategy.

Social, nancial and technological exclusion should be com-bated by promoting the interconnection o world postal net-

works and adopting a regionalized development approach:this was the principal conclusion o the two and a hal dayso presentations and debates that took place between 14and 16 November 2006

The key objective o the 2006 UPU Strategy Conerence wasto provide an opportunity or all the postal worlds decision-makers and partners to better understand developments inthe world environment and to nd ways to build a dynamic,competitive postal market, in line with the UPUs overallmission and with a view to satisying customers unda-mental needs It also achieved its goal o generating ideasor the UPUs strategic planning process up to the 2008

Nairobi Congress

Held outside Switzerland or the rst time at the invita-tion o Emirates Post, the Strategy Conerence, which wasmoderated throughout by Fouad H Nader o AdrenaleCorporation, attracted great interest all around the worldIt succeeded in bringing together ministers responsible or

The importance of the conference was demonstrated

by the fact that it took place under the patronage of His

Highness Sheikh Mohammed Bin Rashid Al Maktoum,

Vice President and Prime Minister of the United Arab

Emirates and Ruler of Dubai, who met with top confer-

ence speakers at a private meeting at his palace.

The participants

Countries 122

Participants 782Ministers 40CEOs, Chairmen &

DGs o postal business 50Consultative Committee 9Restricted Unions 13UN and InternationalOrganizations 15Private sector 37

The conerence has broadened the outlook othe postal world and has provided a clearer pic-ture o its uture role.

Mr. Edouard Dayan, UPU Director General

Posts, senior ocials o regulatory authorities and chair-men and directors general o postal businesses, as well as

representatives o international organizations and o otherpostal sector stakeholders

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Postal services have a critical role to

play in our collective eorts to acceler-ate development and in realizing theMillennium Development Goals.

Mr. Sergei Ordzhonikidze, Director Generalo the United Nations Ofce in Geneva.

The opening and welcome

The opening session confrmed that postal services were a vital inrastructure or social and economic develop-ment and that they had the potential to help governments achieve the UN Millennium Development Goals. Inaddition, the physical, electronic and fnancial networks o the UPU could help expand world trade.

The speakers emphasized the need or Posts to use their

unique network to promote e-commerce and to bridge thedigital divide. The problem o the postal divide betweendeveloping and industrialized countries was highlighted,and there was support or urther reorm o the UPU inorder to address this issue. However, the principle o zeronominal growth currently applied to the UPUs budgetcould stymie urther development.

Mr. Edouard Dayan, Director Generalo the UPU, said the Strategy Coner-ence was taking place at a very importanttime or the UPU.

Not only did it allow a frst review o thecycle which had begun ater the BucharestCongress, but it was also, and above all,a starting point or the strategic choices

that the UPU would have to make at the Nairobi Congressin less than two years time. The Dubai Conerence wouldbe the oundation stone o what was decided in Nairobi.

H.H. Sheik MaktoumBin Mohammed BinRashid al Maktoum,Chairman o theDubai Technologyand Media Free ZoneAuthority, and H.ESultan Bin Saeed AlMansoori, Minister oGovernmentSector Developmentand Chairman oEmirates Post, beorethe opening o theConerence.

The dignitaries

H.H. Sheik Maktoum Bin Mohammed Bin Rashid alMaktoum, Chairman o the Dubai Technology andMedia Free Zone Authority

H.E Sultan Bin Saeed Al Mansoori, Ministero Government Sector Development and Chairman oEmirates Post

Mr. Abdulla I. Al Daboos, Director Generalo Emirates Post and Chairman o the Strategy Con-erence

Mr. Sergei Ordzhonikidze, Director General o theUnited Nations Ofce in Geneva

Mr. Edouard Dayan, Director General o the UniversalPostal Union

Mr. Matahi Kagwe, Minister or Inormation and

Communications, Kenya


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Opening session

The keynote speakers

Mr. Pascal Lamy, Director General o the World TradeOrganization (WTO), expressed the view that the UPU

and the WTO shared many common interests and valuesand that cooperation between the two organizations wasnecessary to ensure coherence between their activities Forboth organizations, development was the ultimate objec-tive While continuing to ull its undamental mandateto ensure the provision o universal postal service duringthe past decade, the UPU had ocused its eorts on trans-orming the postal sector by encouraging and helping itsmembers to embrace new technologies, to undertakepostal reorm and to modernize the postal sector Mr Lamystressed also that postal services constituted an importantsector o trade in services; the UPU strategy o integratingthe physical, electronic and nancial networks could dra-matically acilitate the expansion o global trade In closing,Mr Lamy conrmed that, with the recent granting to theUPU o observer status during meetings where postal ser-vices were discussed, the WTO now considered the UPU asthe UN organization representing the postal sector

His Excellency Alpha Oumar Konar, Chairman othe Commission o the Arican Union, spoke about his

vision or Arica and the act that the vast continent hada number o important questions to deal with; the mainocus o his speech, however, was on identiying specicproblems acing the postal sector First o all, there was aneed to provide the necessary logistics and high-level inra-structure to make the postal sector ever more accessible,more aordable and more user-riendly Secondly, eortsshould be ocused on developing the electronic capabilitieso the Posts to make, or example, the delivery o parcelsand packages more ecient And thirdly, activities shouldbe undertaken to develop electronic money transersThousands o Arican migrants wanted to use these newand secure acilities, which would always be in demand as

the number o migrants was set to increase or the ore-seeable uture The Post was a basic inrastructure whosedevelopment would help to oster the economic and socialdevelopment o the Arican continent HE Alpha OumarKonar underlined the great eorts that the UPU, and itsDirector General, were making through a policy designedto support developing countries, and Arican countries inparticular

The UPU strategy o integrating the physical, elec-tronic and fnancial networks could dramaticallyacilitate expanding global trade.

Mr. Pascal Lamy, Director General, WTO. You chose Arica because you know how impor-tant the Post is or Aricans and or our organiza-tion, which considers that the development o postalservices and o basic postal inrastructure will helpachieve the economic and social development o our

continent.

His Excellency Alpha Oumar Konar, Chairman o theCommission reerring to the UPUs

Regional Development Plan or Arica.


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First session

The postal sector and the Inormation societyFacing a new communications market

The session on the inormation society highlighted the importance o the postal sector in the development o

the inormation society and acknowledged that, while inormation and communications technologies (ICTs)will substitute certain types o mails, overall there is very little danger that postal services will disappear, asthese two types o communications media are complementary. The postal sector should, however, implementreorm in order to embrace ICTs among the new services it oers to customers while at the same time usingICTs to improve the quality o service o the core business. Postal services are a trusted brand that should beused to introduce trusted e-services.

Consideration should be given to including an e-Post strat-egy in the Nairobi Congress Strategy in order to enable theUPU to provide the next generation o postal electronicservices while at the same time improving the quality oservice o its core business There is also recognition thatcompetition in the postal sector can be introduced through

licensing and regulation and that such competition has thepotential to grow the sector in the same way that the tele-communications sector has seen rapid growth ollowingthe introduction o competition

Mr. Mohsen A. Khalil, Director, World Bank GlobalInormation and Communications TechnologiesGroup (GICT)

Widespread access to aordable postal services is animportant building block in making the most o the inor-mation society, which lies at the heart o the developmentagenda Success, however, will only be achieved through

major reorm o the postal sector There is also a directrelationship between economic development and postalservices This can be demonstrated by comparing GDP andletters per capita per year in sub-Saharan Arica

Postal services are an important part o the inormationsociety as, or example, they can help by providing a linkto less densely populated areas, by using their existing net-works and logistics or the introduction o new services toallow the adoption o IT-based services Inormation andcommunications technologies (ICTs) will not replace postal

services as the two types o communications media arecomplementary; however, ICTs can be considered both athreat and an opportunity or the postal sector

ICTs are already an important part o postal services cer-tainly in industrialized countries, but also in some develop-ing countries They have many possible applications: theycan be used to enhance sorting technology, track and tracecapabilities, improved data collection and managementand network integration

The Post is a pillar o the development agenda The WorldBank will continue to provide support to countries that are

planning to reorm the postal sector and to include ICTs intheir assistance to the postal sector, with the aim o devel-oping a three dimensional network that provides physical,electronic and nancial services

In uture, the winners are going to bethe ones who reinvent themselves andthink about themselves dierently, asplayers in the delivery o inormation

and consumer services, as opposed tothe delivery o postal services alone.

Mr. Mohsen Khalil, Director GICT,World Bank.


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First session

The postal sector and the Inormation societyFacing a new communications market

Mr. Alaa Eddine M. Fahmy Yousse, Chairman o theBoard, Egypt Post

ICTs could be the catalyst or transerring postal servicesinto the modern era; at the same time, postal services canbe the basis or developing ICTs By embracing ICTs in orderto meet changing customer demands and the challengesderived rom the opening up and the globalizing o postalmarkets, Egypt Post decided to move and position itselstrategically as a key player in the inormation society Togrow its electronic network, Egypt Post has put in place athree-year strategic plan that will improve access to mod-ern postal services through the provision o, among other

things, inormation centres, cash and payment systemsand money transer networks

Mr. Joong-yeon Hwang, President, Korea Post

Postal market liberalization, competition, the Internet,new technologies, and diversied and advanced customerneeds demand alternatives in order to strengthen competi-tiveness In response to this, Korea Post has embarked onan ambitious programme to ully embrace ICTs in its busi-ness and, in doing so, satisy the needs o its customers

Korea Post has devised and is implementing three innova-tion strategies to gain and maintain customer satisaction,namely customer service, business model and process Inpractice, these three strategies relate to such business seg-ments as logistics, Internet post oces, mobile banking,

call centres, IT-based enterprise resource planning systems,inormation centres and customized services The customer-ocused strategies regarding ICT implementation appear tohave had a substantial impact on the growth o some prod-ucts and services, such as registered parcels and EMS

ICTs can serve as a vehicle that can better satisy the newneeds o customers, and can also be used as an opportu-nity or creating added value As technologies converge,the denition o what is mail may need rethinking, whilecompetition increases as a result o the convergence

The Post is a trusted brand and should use the trustit has earned to introduce trusted electronic services.The Post should be used as a platorm to developnew electronic services, including new fnancial ser-vices.

Mr. Alaa Eddine M. Fahmy Yousse,Chairman o the Board o Egypt Post


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Second session

Understanding the industrys challenges

The speakers discussed some o the powerul trends aecting the postal services and the challenges acingthe postal sector. International migration and the opportunities it has created were highlighted. There was

support or the UPU eort to establish a worldwide electronic payment network, as it would provide acces-sible, aordable and secure means o money transer or migrant workers and provide destination countrieswith an injection o oreign capital to help them fnance their development needs.

There is also a need or investment in human resourcesdevelopment, with the aim o providing a trained andmotivated workorce capable o acing up to the new chal-lenges in the postal industry Social dialogue also needsto be promoted While competition has the potential oimproving quality o service and growth or the sector, itwas observed that a ree market would not guarantee theprovision o the universal postal service However, oeringgood quality o service is a crucial challenge in any market

situation

Mr. Brunson McKinley, Director General, InternationalOrganization or Migration (IOM)

Increased human mobility and how it transorms servicessuch as those oered by the postal industry is a major chal-lenge or the postal sector One o the challenges associ-ated with growing migration fows is how to help maximizetheir benets or countries o origin, countries o destina-tion and or individual migrants themselves In this context,the topic o remittances plays a central role because thelargest economic benet o migration or origin countries

is very clearly remittancesRemittances alone cannot address all development needso poor countries, nor be a substitute or oreign aid, butthey do put migrants rmly within the development equa-tion, and as they grow, oer more and more opportunitiesor contributing to economic development and povertyalleviation in many parts o the world

There are a number o things that institutions can do toenhance these already important development impacts at the individual level, at the community level, and atbroader regional and national levels

Institutional interventions in the remittance market can bedivided into two categories: those which contribute to enhanced development

impacts; and

those which improve remittance transer services byreducing cost, expanding choices and improving accessThe role o postal services ts clearly in the second cat-egory

Posts can play an important role in helping to lower remit-tance transer costs, improve transer services and expandchoice Playing a larger role in this marketplace will not onlybe good business, but will also help enhance the contribu-tion that postal services currently make to global develop-ment, an objective included in the Universal Postal Unionsmost recent strategic report, where the aims o eradicatingpoverty and developing global partnerships or develop-

ment are detailedThe UPU has a long history o involvement in the nancialtranser market These services, according to its strategicreport, have not kept pace with current needs For postaloperators to be competitive in this market, remittancetranser services must be accessible, simple, transparent,ast, sae and aordable

The UPU has taken a step in the right direction by developing a worldwidenetwork or electronic und transers that connects postal operators in all its

member countries, acilitates interconnection with other networks and providescitizens with access to postal and non-postal fnancial services.

Mr. Brunson McKinley, Director General IOM.


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Second session


Mr. John Pedersen, Union Network International

The postal industry is, and will continue to be, very labour-intensive; the perormance o its workers will guarantee, orotherwise, the success o the postal industry Developmentsin recent years have brought about a series o changes,including rationalization, restructuring, automation andmodernization, all o which have had a tremendous impacton employment and working conditions One o the majorchallenges that the industry aces in responding to thesechanges is to ensure suitable investment in a well-trainedand highly-motivated workorce that can easily and readilyadapt to the changes

New technologies and electronic substitution are two ur-

ther major challenges acing the postal industry that couldresult in decreased volumes in some postal segments butcould generate increased volumes in other segments Acombination o merging the physical and electronic net-works and the development o nancial services and logis-tics solutions could be a suitable response to these chal-lenges

Another major challenge will be to guarantee and urtherdevelop the concept o the universal service obligationEvery citizen throughout the world has the right to com-municate using postal services and it is the obligation ogovernments to provide these services A well-unctioning,

high quality postal service is the cornerstone o any demo-cratic society and contributes both nationally and interna-tionally to social coherence and economic growth

A nal challenge to consider is that presented by the exis-tence o competition This actor can be viewed as a drivingorce or growth and expansion in the postal sector How-ever, a combination o globalization and a highly competi-tive environment is setting a trend where a lot o emphasis isbeing placed on making a prot, sometimes at the expenseo the rights o the workorce It is important to remember

the importance that a well-motivated workorce has orthe success o the postal industry, so every eort should be

made to create growth or the postal industry, while at thesame time guaranteeing the rights o the postal industrysmost important asset its workorce

Mr. Herbert-Michael Zap, President and CEO, Inter-national Post Corporation

The challenges or the postal industry all into two catego-ries, namely internal challenges (mail substitution, demo-graphics, consumer power, customer needs, competitionrom postal operators, shareholder pressure, saety andsecurity, corporate responsibility), and external challenges(globalization, liberalization and regulation) I the postal

sector understands these challenges and i all the playerswork together it will be possible to nd solutions and suc-ceed

Postal operators should react by developing strategies tomeet these challenges They will inevitably ace increasedcompetition amongst themselves; this is a very normalprocess But competition and cooperation are not mutu-ally exclusive On the contrary, there is a need or morecomprehensive cooperation to increase cross-border qual-ity, to oer excellent end-to-end quality o service Thisis the greatest challenge in a competitive market Indeed,quality must be consistent and at a permanently high level

There can be no prospect o growth or development orthe postal sector without quality o service

The UPU, as an intergovernmental body, and IPC, as a postaloperators organization, can support cooperation betweenPosts to meet upcoming challenges The two organizationshave worked together in the past and also have an impor-tant complementary role to play in the uture, in a moreand more competitive environment Both the UPU and IPCare part o the postal industry and are committed to itssuccess

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Second session


Mr. Igor A. Syrtsov, Director General, Russian Post,and Chairman o the UPU Strategy Planning Group

One o the major roles o the Strategic Planning Group isto advise the Council o Administration (CA) and the PostalOperations Council (POC) on matters related to the stra-tegic planning process or the UPU The Scenarios Paper(initially published and presented to the 2006 POC) is akey strategic planning tool used by the group to provide aqualitative description o some o the orces driving changewithin the postal sector and to develop a ramework orexamining a range o possible utures or the sector

The postal sector is evolving, but the pace and directiono the change is varied The Scenarios Paper develops ourpossible scenarios or the postal sector based on the rate

o change developmental, predictable, transormationaland disruptive and the ollowing three possible types

o Posts as a response to these scenarios: traditional Post(well-managed organization providing high-quality basic

services through ecient operating processes), hybrid Post(still operated under government-directed mandates, mostunding coming rom services in competitive markets), andcommercial Post (driven by shareholder expectations)

The UPU has an important role to play in providing tar-geted support and services to meet the needs o the di-erent Posts, whatever stage they are at Some o theseservices should be very similar to those already providedtoday, but with any necessary improvements added Oth-ers may evolve rom the need to develop new marketingand customer services as a result o increasing competitionand internationalization o commerce Finally, the UPU will

have to meet the sophisticated requirements o the mostdeveloped commercial operators that only an internationalbody that truly represents the postal industry can provide


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Third session

The evolving postal network

The presentations showed dierent options or the postal operators to evolve and become global: in onecase, by developing the operators network through acquisitions and agreements and expanding the range

o products and services; in another, by means o mutually benefcial alliances between a postal operator anda global service provider. Taking account o all the long-term interests o the parties concerned, such alliancescould also provide a solution to the problems regarding access to the network; they could add value to theproducts and services oered to customers and generate economies o scale to providers.

As the global postal network has evolved and becomemore complex, so standards have become even more nec-essary in order to interconnect its various components Thedevelopment o e-commerce has created new needs orstandards; IT security, data processing security and securityin postal nancial services are only a ew examples Interna-tional governance bodies such as the UPU and ISO will playkey roles in helping all players in the sector to harmonize

the postal network and acilitate its development

Societies evolve, but societies in developing countries areacing social, digital, banking, technological and postalexclusion The postal sector has an important role to play inghting against this exclusion and in supporting the achieve-ment o the UN Millennium Development Goals Throughpartnership with governments in their social policies, postalservices could provide a universal service even under com-petitive conditions and still achieve positive results

Mr. Thomas Baldry (on behal o Dr. Klaus Zumwinkel,Chairman o the Board o Management), Deutsche

Post AGThe challenges that postal operators are acing in thesetimes o global competition and liberalization are very wellknown The evolution o Deutsche Post rom a nationalpostal operator to a global network provider is one responseto these challenges Globalization and changing trade pat-terns have also changed the needs o customers Today,the big customers also work, think and operate globally;they ask or sophisticated logistics solutions and no longerjust or transport rom A to B So, to remain in this marketand to stay competitive, Deutsche Post began in, the 90s,to undergo a huge and complex transition process So, in

one sense, it transormed rom a decit-driven nationalauthority to a global player in express and logistics; andin another sense, Deutsche Post was transormed, passing

through a process o separation rom the regulator andthen privatization, rom a governmental organization to astock corporation

Deutsche Post is now a corporate structure, still guarantee-ing the universal service that is supported by our pillars,namely: mail, express, logistics and nance Two core ele-ments made the transition process possible and success-

ul: rstly, the process was stable and predictable withoreseeable and clearly dened milestones; and secondly,good collaboration with the Government, trade unionsand employees was developed The turnaround could nothave taken place without the support and cooperation oemployees and unions

Another important consideration or success in the evolvingenvironment is to perceive challenges as opportunities and todevelop strategies to meet them Internationalization, out-sourcing, electronic substitution and digitalization are someo the major changes the postal world is acing, in addition tothose previously mentioned, such as increasing competition,

changing customer demands and regulation The strategiesthat Deutsche Post has developed include eciency andquality improvement and cost fexibility to deend the corebusiness, as well as expanding the product range and beinginternational to move beyond the core business

A nal remark concerned the need or cooperation Today,with liberalization picking up speed and an increasing num-ber o Posts being privatized, the postal sector will becomelike any other industry where cooperation and competitionexist hand-in-hand There are possible instances where aprivate operator can cooperate with a postal operator withmutual benets Being competitors does not mean that

one cannot cooperate On the contrary, ruitul coopera-tion can be the best way to serve customers, and this is acommon and ultimate goal

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Third session

The evolving postal networkMr. Carl Asmus, Vice President, International Market-ing, Fedex CorporationAlliances between postal operators and global serviceproviders have the potential o strengthening the evolv-ing postal network Such alliances can address the chal-lenges acing the sector and add value to the productsand services oered to customers Three requirements arecritical to build a successul alliance: to have a partner thatts, to have a confict resolution system and to build trustthroughout the organization

A good example o an alliance o this kind is that o Fedex,a global service provider, and USPS, a postal operator It isbased on the capacities o both parties the very stronginternational brand and the very extensive internationalglobal transportation network o the global service providerand the very strong national brand and the very extensivedomestic retail and delivery network o the postal operatorthat can provide coverage or the whole country

The benets o alignment are very strong or mutual port-olios The global provider gains access to a very vast retailinrastructure and delivery network and would have a newmarket or its global services The postal operator gainsaccess to an expansive global network with highly evolvedIT systems and to an alliance with a trusted internationalbrand The result is an extremely strong international anddomestic brand that adds value or both customer seg-

ments, oers unmatched access to the networks and ullservice or the entire customer base

Mr. Carlos Henrique Almeida Custodio, Chairman,Empresa Brasileira de Correios e Telgraos, Brazil

It is vital or Posts and their network to evolve i theywant to succeed in a changing environment They need tobecome more ecient and to improve their managementand decision-making processes They also need to oer

new products and services and to develop new strategiesThere is a new culture; there are new values or companiesand new policies to be applied

There is also, however, a world o exclusions where soci-eties in developing countries ace social, digital, banking,technological and postal exclusion To ght against thisexclusion, the Posts have to ace up to their challengesand should be called upon to ull their role in a satis-actory way by not only supporting governments in theirsocial policies, by committing to the achievement o the UNMillennium Development Goals, by providing the universalservice but also by being competitive and achieving posi-tive results

The postal network is a basic social inrastructure, a plat-

orm on the basis o which other programmes can belaunched to encourage social inclusion and to give peoplemore chance to integrate Remittances or those who livein the most remote places, distribution o material or pub-lic schools and distribution o medicines are only a ewexamples o the social values carried by the postal networkspecically developed by the Brazilian Post

The situation o change and exclusion in a complex postalworld generates new challenges or the UPU as well TheUPU has a role to play in challenging contradictory expec-tations about postal volumes in the uture, in eliminatingpostal exclusion and digital gaps, in improving postal net-

works in terms o quality, security and eciency and inbridging the gap between ICs and DCs which is still grow-ing despite all our best eorts

In conclusion, the postal world (postal operators, postalorganizations and postal stakeholders in general) mustchange by adapting to this new and evolving environmentThere is a need or social compromise and or universal-ity, consensus and cooperation, in spite o the competitiveenvironment


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Third session

The evolving postal network

Mr. Alan Bryden, Secretary General, InternationalOrganization or Standardization (ISO)

The emergence o the Internet, and associated technolo-gies and services, together with the globalization o trade,have revolutionized many industrial and service sectors inthe last decade, and the revolution is only just starting Thisis particularly true or postal services, which have operatedas an international network or over a century under theauspices o the UPU

Networks, especially at the international level, cannotoperate without agreed standards, and this is where theUPU and ISO, the leader or the production o multi-sector,consensus-based international standards, collaborate and

will increasingly do so in the utureGlobalization has considerably increased the need or,and the production o, international standards In ISO, or

example, the production o standards has increased romjust under 900 in 2002 to some 1,250 in 2005 Such stan-

dards are developed in a new political ramework or thetechnical harmonization o regulations and business prac-tices, characterized by:

the World Trade Organization, which now has 150 sig-natory countries, its Agreement on Technical Barriers toTrade (TBT) and its General Agreement on Trade in Ser-vices (GATS);

the multiplication o bilateral and regional trade agree-ments;

the emergence o new and powerul developing econo-mies;

the promotion o good regulatory practices; international companies becoming more and more mul-

tinational

The complexity o the emerging global postal network will need internationalstandards to operate eectively and a win-win relationship should be consoli-dated between UPU and ISO and their respective members.

Mr. Alan Bryden, Secretary General o ISO.

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Fourth session

New market players

The session ocused on new players in the market. Liberalization and privatization are attracting new investorsin the postal market. The geography o the sector is changing. The traditional postal operators have to evolve

in order to adapt to the new environment. New entrants and new players, with resh ideas, lean manage-ment and decidedly customer-driven attitudes, have already entered some postal markets, and this trend willprobably continue, both nationally and globally. It will ultimately lie with the customers o postal services todetermine who will survive. But it will be the business customers who made that decision, due mainly to thesheer size o the business mail market and the relatively small number o major customers that produced themail. Universal service was guaranteed and underpinned by business mail customers. I their needs are notmet, they will simply shit to another operator that meet their needs.

The presentations during the session repeated the mes-sage given by previous speakers, namely that, i managedwell, competition in many cases could be a positive devel-opment giving customers greater choice and inciting theincumbent to react and reinvent itsel Improving quality

o service, more fexible pricing and other new ideas wereamong the benets to be gained in a more competitivepostal sector But greater liberalization and the entry onew players will require more regulation to protect theinterests o consumers

Mr. James A. Runde, Special Adviser, Morgan StanleyThe opening up o the postal markets is beginning to attractinvestors Investment in postal assets had until recently beenby way o privatizations and initial public oers (IPOs) (TNT,Deutsche Post) but with the recent partial sale o Post Den-mark and La Poste Belgique, a new orm o postal invest-

ment has begun Privatization is on the agenda or severalgovernments, including Japan and Italy

New entrants into the postal investment markets havetaken three orms, namely private equity (CVC (DenmarkPost, Belgium Post)), the involvement o integrated com-panies (such as UPS and FedEx in the USA) and, nally,inrastructure unds, such as Macquarie in Australia

In making investment decisions, the strategic direction o apostal company will determine the amount o equity andthe source o equity The constraints in setting the strategicdirection include several major considerations and infuencesie pension obligations, universal service obligations (USO),government budget constraints and labour relations

These issues must be dealt with beore nally deciding thestrategy The capital markets are monitoring the sector andhave noted the signicant changes that are taking place,not the least o which are liberalization and privatization;

increasingly, they are seeing attractive opportunities orinvestments


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Fourth session

New market playersMr. Carl-Gerold Mende, Director International, RoyalMail Group plc, Great BritainThere are several ideas regarding the problems that incum-bents may have in the market i they do not reinvent them-selves to be adapted to the changing environment The rstidea is that size and being around or a long time arenot necessarily saeguards or prosperous survival As anexample, airline companies and major motor manuactur-ers that were once in a seemingly impregnable position arenow aced with having to make major restructuring eortsin order to survive The second idea is that articial marketentry barriers will not work as long-term protection; highprot margins may attract potential competitors and turmoilcan be created when markets open up too late in the dayThe third idea is that the market will not tolerate waste,

meaning that lean production principles are necessaryThe automotive industry is a case in point The last thesis,customers require products that ull (their) needs, dealswith the consequences o producing because we eel com-ortable

Royal Mail, as the incumbent postal operator, is reacting tothese ideas by making signicant changes to its businessocus This requires major cultural and attitudinal changeto become a customer-ocused competitor, while eliminat-ing waste and coping with regulatory changes and therequirement to maintain the universal service Competi-

tion is actually helping Royal Mail to change, though it isable to retain its traditional advantages o a trusted brandand the commitment o its workorce Investment in newpeople (rom outside the company) and training o exist-ing sta are other notable changes that the company isintroducing to reinvent itsel in order to be sustainable inthe new environment

Mr. Angus Russell, Director, Legal and CorporateAairs, TNT Post UK Ltd.Every country is dierent and each postal operator is di-erent but all have something in common: Posts are parto a much wider continuously changing communicationsmarket in which Posts are trying to adapt and prosper Buti they want to survive, they need to ocus on business cus-tomers needs It is a act that the collection and delivery osocial mail depends upon businesses continuing to use thePost; they are the backbone o the postal services

Business customers want cost-eective ways o meeting theirneeds and new solutions that t their business They are nolonger prepared to t their business needs around postalservices; they want postal services tting around their needs

Competition in this respect should be regarded as a benetCompetition improves choice and brings in new ideas suchas late collections, single item tracking or machine sortingor large letters, new services and also new jobs

But developing a climate or healthy competition needstime Opening up the market in the European Union tookrom 1992, with the issuing o the Green Paper on PostalServices, to 2009 with the announced directive on ull mar-ket opening There are many obstacles to introducing com-petition: unequal tax regimes, the economies o scale theincumbents have without it, trusted brand (the emotional

brand link to incumbent brand) and price regulation; butcompetition makes sure that the Post does what customerswant, and that the Post thrives, rather than just surviving


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There was a ocus on the actors that permit countries ben-eting rom technical assistance and cooperation to ensurethe sustainability o their own reorms and developmentsPublic institutions have to commit themselves to imple-menting postal sector reorm in an integrated and con-certed manner and this approach will only succeed i thepostal sector is regarded as a high-level priority at nationallevel The regional development policy, designed and nowbeing gradually implemented by the UPU, responds to the

question o integration and oers a stable ramework anda methodology which ensurs the involvement o all con-cerned parties government, operator and regulator

The harmonious and sustainable development o the postalsector must also take into account the social responsibilitieso governments They should, or example, precisely denethe obligations o the universal postal service and shouldalso dene the appropriate regulatory ramework or thepostal sector, while at the same time taking into accountthe needs o the customer and society; the need to takeinto account social needs was raised as well

Ms. Maria Encarnacin Vivanco Bustos, Vice-Ministero Transport and Public Works, SpainIn the current environment, reorming postal services toensure their long-term viability has to include key elementssuch as a specic plan (integrated postal reorm and devel-opment plan (IPDP) developed by the UPU) in which actionsto support and develop the universal service are integratedand the regional ramework is taken into account But,above all, there is a need to get political commitment romgovernments The act that the Post itsel contributes to thegeneral development (vast network, 53 million employees,money transers to support emigrants, integration o new

Fith session

Ensuring sustainable development o the postal sector

The session highlighted the issue o sustainable development in the area o technical cooperation by ocusingon the strategies and policies that should be put in place to reduce the gap between developing and indus-

trialized countries. Reerences were also made to the postal divide, which was compared with the digitaldivide. The political dimension o sustainable development was emphasised by speakers who stressed theimportant role o governments in guaranteeing its success.

technologies through E-products and support to E-com-merce by delivering goods, etc) is an important point toemphasize in order to get that commitment

The current technical cooperation activities in the UPUhave a new outlook: this includes a regional approachto meeting the specic needs o the beneciary country orregion This new approach to cooperation is being devel-oped jointly by the UPU, along with Restricted Unions and

governments through the IPDPs and regional developmentplans (RDPs) This new strategy, based on regionalization,takes account o postal laws, the network inrastructureas a undamental asset or the Posts, the commitment ogovernments, the possible unding options and the trans-er o technology It looks orward to increased eciencyand improved results

The UPU contribution to the UN Millennium DevelopmentGoals is another undamental aspect o the contribution tosustainable development in general and, specically, to thesustainable development o postal services This support

could be taken into account in the orthcoming NairobiStrategy

The political dimension taking into account the commit-ment o both the donor country and the beneciary countrygovernments is a key element o success Considerationcould also be given to reinorcing this dimension in theuture strategic plan o the UPU There is a need to empha-size the political component o cooperation over a purelytechnical approach A joint eort by all the parties involved governments o developed and developing countries, UNbodies and agencies, unding organizations like the WorldBank, Restricted Unions, etc including ollow-up o theresults, is the only guarantee o success


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Fith session

Ensuring sustainable development o the postal sectorMr. Georges Leebvre, Director General, La Poste,FranceThe uture o the postal sector is a major issue or societyThe postal services play a societal role; they have a dou-ble responsibility social and economic In the EuropeanUnion, the 1997 Directive assured a harmonized universalservice o quality to all European citizens

To guarantee sustainable development, the modernizationo the postal sector has to be based on a universal serviceo quality The universal service obligation cannot be seenas a burden, but rather as a actor to contribute towardseconomic growth and sustainable development

The European postal operators have committed themselves

to modernization o the postal services based on two mainpillars: industrial and technical modernization and thedevelopment o value-added services Social moderniza-tion is inseparable rom industrial and technical modern-ization The liberalization o the postal sector, which is alabour-intensive sector, has to take into account the socialrole o the sector The industrial and technical reorm andmodernization needed to compete with other sectors willnot succeed i it is not based on equivalent goals rom thesocial point o view

Postal sector evolution, i it is to be sustainable, has to be

global; it has to cover industrial, technological, commercialand social aspects The postal sector, to be competitive andmake this competition sustainable, has to renew and alignits vision towards the provision o new services adapted tothe needs o the changing society

Mr. Guozhong Huang, Deputy Director General, Uni-versal Postal UnionThere are two elements at the heart o the UPUs develop-ment cooperation policy One is to bring about change byredesigning postal institutions and policies, and the other isthe importance o creating a global partnership or devel-opment

The activities o the UPU are very much ocused on bring-ing structural changes to the postal sector to enable it todeliver its ull potential in terms o social and economicbenets These activities are also part o the UPUs eortsto create a global partnership or development In buildingthe partnership, the UPU works with dierent stakeholders,including governments, postal operators, regulators, devel-

opment banks and suppliers, using a regional approach todevelopment that consolidates all the necessary ingredi-ents to eect change But developing and implementingactivities in a country or a region is not the only challengeFinding ways to guarantee their lasting impact makingthem sustainable and nance these activities are evenbigger challenges Securing the investments to bring a planto lie is critical, and unding is, o course, given on theunderstanding that a project can bring concrete results Inthis respect, the UPU is making every eort to show that astrong and ecient postal sector can bring tangible solu-tions to many social and economic problems acing many

least developed and developing countries But while theUPU can provide the plans and tools to urther developthe global postal network, it cannot do it alone Nationalgovernments and nancial institutions must also commit tobuilding and ensuring the lasting development o a vibrantand strong postal sector

The UPUs activities are very muchocused on bringing structural chan-ges to the postal sector to enable itto deliver its ull potential in termso social and economic benefts andcontribute to the Millennium Devel-opment Goals. These activities arealso part o the UPUs eorts to cre-

ate a global partnership or devel-opment.

Mr. Guozhong Huang, UPU DeputyDirector General


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Sixth session

Governance

At both the global and national levels, good governance is an essential process, not only or the sustainabledevelopment o the postal sector but also to ensure a level playing feld or all parties. In global governance,

the UPU has a legitimate role to play or the sector, alongside the WTO, ITU, ISO and other United Nationsand international organizations.

An ecient governance ramework enables the develop-ment o binding rules because the actors eel they havehad a voice in the decision-making process The sovereignpowers o member countries are respected because theythemselves decide to adhere to the common strategy andto abide by the rules When the rules are expressed in theorm o results or outcomes, fexibility is assured, allowingeach member to pursue postal transormation and reormin its own way In a world where technology rapidly rendersany detailed regulation obsolete, the act that good gov-

ernance is based on sel-compliance will enable the postalsector to keep up with change and trends

At the national level, postal reorm has to dene clear rolesor the government, regulators and operators In additionto protecting the interests o consumers, regulation shouldalso aim to increase eciency o services, set air tarisand help to grow the world economy Whatever type oreorm is implemented, universal service should always beguaranteed


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Sixth session

GovernanceMr. Hideo Shimizu, Vice-Minister or Policy Coordi-nation, Ministry o Internal Aairs and Communica-tions, Japan

Governance in the postal sector in Japan is not a smallmatter The national Parliament was dissolved and newelections held over the disagreement on the privatizationo the postal services

Governance in the postal sector can be broken down intothree perspectives First, at the global level, the postal net-work is interconnected, ramed by international normscontained within the UPU Acts, rules and standards Thesecond perspective is national Here, the institutionalramework denes the relationship between the operatorand the regulator, and the evolution o the operator In

the case o Japan this evolution involves a transition romthe public to the private sector Finally, there need to benorms o behaviour or the operators themselves, includinggreater internal and external audits, and ensuring that theneeds and preerences o consumers are met

The structure o governance is not xed; it has to evolvein parallel with changes in the marketplace In a liberalizedenvironment it has to be fexible enough to increase ree-dom o business management and to support the develop-ment o the postal services and the postal market

In order to keep up with current changes, the Government

o Japan decided to urther reorm the postal services ol-lowing ve basic principles: vitalizing the economy, reormin line with the entire structural reorm in Japan, conve-nience o consumers, use o Japan Posts current network,and consideration o present conditions o employment

In pursuing reorm rom the perspective o governance,the operator in Japan will be required to maintain universalservice, accessible to all citizens at least at the same levelas beore reorm There will be greater fexibility in revisingrates, and the operator will be allowed to expand into inter-national logistics, and other new businesses, with relaxedregulation or parcels The combination o strengthened

governance, with improved oversight o the regulation onthe operator, and privatization enabling more fexible oper-ations and business management governance, is expectedto produce the best results

Mr. George Omas, Chairman, US Postal Rate Commis-sion

The postal service is historically part o the national gov-ernment Postal reorm, in general, reduces the role o thegovernment in providing postal services but, in the end,governance o some sort is still necessary

The US postal reorm in 1970 was a precursor to the mod-ern reorm movement It insulated management rom thegovernment; it directed management to operate in a busi-ness-like ashion even though they retained the monopolyor letter mail At the same time, an independent regulator,the Postal Rate Commission, was created

An independent postal regulator can provide substantial

benets The rst unction o the Postal Rate Commissionis to protect captive users rom exploitation Keeping let-ter mail aordable or everyone is part o the universalservice obligation At the same time, rates or competitiveproducts and services must be set high enough to assurethat the postal service is not competing unairly with pri-vate businesses The second unction is to ensure that themonopoly is not exploited to cross-subsidize those prod-ucts oered in competition; in this sense, a primary ocuso the Postal Rate Commission has been to learn how andwhy postal service costs are incurred The third unction isto increase transparency and thereby oster more ecientoperations Accurate cost inormation is the best tool or

improving operating eciency The ourth unction o thepostal regulator is to assure that the universal postal serviceobligation is met

Although the American model has been successul, newways o improving the ways in which the system achievesthese our unctions are being explored To require the Postto meet its obligations, legislation is currently being consid-ered that would give the regulator new authority It wouldalso give the operator new pricing fexibility to implementmarket-driven rates, so long as the increases are below therate o infation

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Sixth session

GovernanceMr. Emmanuel Drai, Lawyer, Latham & Watkins

Governance is a decision-making process used to dene

common rules based on respect, dialogue and consensusGovernance does not mean government Government hasa political dimension, but both notions are complementaryGovernance is exercised by governments in a specic geo-graphical scope

Governance ensures sustainable development The validityo rules based on consensus and protection o the generalinterest ensures its long-term existence But globalizationcreates a need or global governance The postal sectoris aected by globalization and, consequently, it calls orglobal responses

The BWPS and its ve objectives oer a good exampleUniversal postal service raises the question o whether ornot there is a need or regulated markets Quality o ser-vice and eciency o the postal network raises the issueo harmonization o national situations; Markets andresponding to customer needs might include developingglobal responses or the marketplace Through the waveo modernization o the postal sector, the orces drivingPostal reorm and sustainable development can be seenas relatively uniorm in both the industrialized and develop-ing world There are objectives to be dened at global levelThe last objective, Strengthen and broaden cooperation

and interaction among the stakeholders o the postal sec-tor is the denition that best emphasises a global needor governance

The UPU is thereore an excellent example o global gov-ernance, operating as what may be called a sel-regulatingsociety, with three pillars The rst pillar is the establish-ment o a decision-making process bringing together allthe actors within the sector to dene a set o commoninterests The UPU, as the global orum bringing togetherall the actors in the postal sector, and having dened com-mon objectives in a single strategy, has done this Second,the UPU is an intergovernmental organization, wheremember countries exercise their sovereign power withinthese objectives to enact rules and standards that are bind-

ing on all But in order to create a eeling o belonging anda sense o obligation, the rules should be a set o generalprinciples, not too detailed, with requirements or resultsor expected outcomes The actors have dierent traditions,policies and technologies, and may reach the same resultsin a dierent way The third pillar is that UPU membercountry governments vest national regulatory authoritieswith the power to control and sanction compliance withthe international rules They dene how the eciency othe internal compliance chain is measured, and then moni-tor it whether on the basis o complaints or on an overallassessment


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Seventh session

Regional approaches to meeting global needs

This session provided views on the lessons to be learned rom regional approaches to meeting national andglobal objectives. Defnition o key perormance indicators at national and regional level and basing reorm

on best practices were some o the key messages given by the speakers. Having the support o stakeholders,provision o unding and monitoring, and evaluation o the reorm process in order to implement urtherreorms were other key messages.

Emphasis was placed on the importance o the work othe UPU in providing viable models or postal reorm,together with the need to promote regional cooperationOther specic areas mentioned or implementation whilereorming included having reliable postal statistics, quali-ed sta and cost accounting systems The need or re-engineering postal processes and improving the deliveryinrastructure, together with the need or integrating ICTs,was also pointed out

The Honourable Pennelope Beckles, Minister o Pub-lic Utilities and Environment, Trinidad and Tobago

The Caribbean region, composed o 22 countries and ter-ritories, has its own specicities in terms o geographical,economical and political structures and development Thesame is also true at the postal level As an example, the79% growth in the domestic service is the highest amongall UPU regions Challenges have to be met both at nationaland regional level

At national level, Trinidad and Tobago Post is going through

a transormation process in order to restore public con-

dence, build volumes and revenues, improve customerservices, extend universal coverage, revise the legislativeand regulatory ramework and gradually open up to com-petition

At regional level, the creation o the Caribbean Single Mar-ket and Economy (CSME) is a pillar to reinorce the develop-ment o postal services in the region The provision o theuniversal postal service, the expansion o products such as

electronic money transers, developing greater customer-ocus postal organizations, investing more in technologyand inrastructure and exploring new partnerships withprivate companies are some o the goals to be achieved

The UPU has a role to play in assisting the Caribbean regionby acknowledging the regions special needs and devisingplans and programmes to meet these needs Specically,the UPU can contribute to the development o new prod-ucts and services and to capacity-building in the regionFinally, the UPU should channel greater resources, includ-ing technical assistance and development aid, to postaladministrations that are undeveloped in inrastructure and

operational systems

I the region ails in meeting its postalgoals, this will result in disadvantagedpopulations, disgruntled business clients,disconnected networks, unhappy govern-ments, ewer jobs in the sector and unreg-

ulated operators.Hon. Pennelope Beckles,

Minister o Public Utilities and Environmento Trinidad and Tobago

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Seventh session

Regional approaches to meeting global needsMr. Khutso Mampeule, CEO, South Arican Post OfceLtd. (at the time), and Chairman o the Strategy Board

or Arican postal operatorsThe needs o the Arican region are evident The entireworld agrees that Arica must be a priority in terms oeconomic and humanitarian aid Postal perormance indi-cators illustrate well how Arica is also ar behind otherregions in the development o postal services The UPU isseeking to make Arican Posts ecient links in the universalservice chain

The oremost priority in Arica is to recognize and build aregional perspective The (UPU) Postal Development Plan orArica is an inter-regional approach o sharing knowledgeand intellectual capital to help all Arican postal operators

to achieve the global standards It ocuses on the physical,electronic and nancial postal services and products andis based on concrete objectives with measurable resultsIt will lead to better support or eorts to improve resultsand promote partnerships in avour o Arica at national,regional and global levels Implementation o the PostalDevelopment Plan has started and has already led to someimprovement in service and better utilization o unds

Arican countries are acing many challenges such asbridging the digital divide, access to services and markets,wealth creation and poverty reduction, bridging the devel-opment gap and regional integration, inrastructure and

trade acilitation

The critical postal actors or success in Arica at regionallevel include the need to improve regional cooperation and

the availability o a methodology to implement denedpolicies and strategies The UPU can do a lot regarding

this point At country level, availability o nancially viablebusiness models, qualied proessionals, implementationo technologies, government support to cover the costo the universal service obligation, investment in postalinrastructures and other related acilities are only some othose critical actors

There are some specic targets to be achieved beore the2008 Nairobi Congress These targets include: preparationo IPDPs or at least our below-average countries eachyear; achievement o UPU worldwide standard or on-timedelivery (J+5 or letter-post items) by all 44 Arican membercountries; development o the postal parcel sector and a

yearly 3% increase in postal trac rom 2006 onwards;implementation o cost accounting systems in the conti-nents 30 LDCs; increase in the use o IFS Light to 85% oArican countries and provision o EMS service to 100%

Arica aces complex challenges, not only at coun-try level, but also at regional and at global level.However, these challenges should be regarded in apositive light. They can be seen as opportunities orbuilding E-portals and E-services, postal inrastruc-

ture and acilitation o trade or small and mediumenterprises through Posts.Mr. Khutso Mampeule

CEO o South Arican Post Ofce Ltd.

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Seventh session

Regional approaches to meeting global needsDr. Mohamed S. ben Taher Benten, Head o Saudi Ara-bia Post

An example o how a region reorms is the transormationo Saudi Arabia Post rom a civil service department to acommercialized holding entity that also owns and operatesa number o privatized sub-entities

The reorm was initiated in 2004 and our options wereconsidered: keep Saudi Arabia Post as an independent gov-ernmental organization; license a private operator; changeSaudi Arabia Post into a commercialized entity; or turn itinto a commercialized holding entity and look at the activi-ties within the entity which needed reorm The last optionwas adopted

Each activity which the Saudi Post was perorming or couldperorm was evaluated It was decided that mail deliveryand postal processing as well as administrative issues andIT inrastructure needed to be reormed, strengthened andkept in-house Logistics and transportation could operateindependently, so the best logistics company in Saudi Ara-bia was purchased to provide these services As direct andhybrid mail was not oered and could be a money-gener-ating activity, a company providing these services was pur-chased as well A separate entity was created to manageproperty, as the Post had many buildings at prime locationswhich could be commercially exploited It was also decidedto separate the express mail and give it nancial and mana-

gerial autonomy to enable it to compete eectively in theexpress mail market As no specialization was available inthe organization in respect o sales and marketing, theseservices were also outsourced

Regarding the administrative inrastructure, legislative,regulatory and operational unctions have been separatedFinally, to achieve ecient mail processing and delivery, astandardized and clear addressing system has been estab-lished and mail delivery to customer premises started Anew ZIP code has been developed to improve the distribu-tion process and to decrease its cost

In respect o IT inrastructure, technology was consideredthe only way to move orward Saudi Post plans to intro-duce automated mail processing, and make all mail items

traceable and mail delivery navigable It has plans to intro-duce a door-to-door delivery system using geographicalinormation systems (GIS) Subscribers to the new servicewill be given a postal code and a street number whichwill be entered into a database acilitating delivery any-where within Saudi Arabia in the shortest time possibleand at a minimum cost Saudi Post and Microsot havesigned an agreement or launching a long-term strategicrelationship with the goal o integrating traditional mailwith state-o-the-art electronic services, providing citizensand organizations with integrated and unied postal andmail solutions

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Eight session

The uture role o the UPU

This session took the orm o a round table discussion between the Chairmen o the Council o Administration(Mr. Gabriel Mateescu, Romania), the Postal Operations Council (Mr. Michael Regan, United States o America)

and the Consultative Committee (Mr. Charles Prescott, United States Direct Marketing Association).Each othem was invited by the moderator to link the key outcomes o the Conerence to the uture role o the UPU.Their comments and observations were supplemented by Conerence delegates who gave their views on howthe UPU should address operator, government, customer and other sector needs and desires.

The ollowing key messages were delivered on the uturerole o the UPU:

reorm o the UPU is necessary to meet new challengesand the special needs o developing countries;

the results o this Conerence will help the UPU to adoptstrategic orientations on which reorm can be based TheUPU has to take into account the act that 85% o itsmembers are DCs and that the strategy has to be globalbut fexible enough to be adapted to the regions;

the UPU has to help develop nancial services by pro-moting the capacity o Posts to provide both physicaland virtual communications The nancial sector wouldnot exist without the postal sector, but the postal sector,would exist without the nancial sector;

the UPU should acilitate E-commerce and improve theparcel business to exploit its potential The network opost oces provides a strategic access point or devel-

oping the inormation society and the UPU is one o theounding members o connecting the world projects;

the UPU should address the problem o the postal dividethat exists between ICs and DCs and between urban

and rural areas The UPU has to react to what has beensaid in this Conerence; a strategy conerence to dis-cuss the situation o Arican Posts should be organizedbeore Nairobi;

the UPU has a lot o objectives and activities to achievebut, since 1997, zero nominal growth prevents us rom

completing all tasks adequately From Nairobi onwards,the UPU members should submit proposals supportedby a breakdown o the budget required to implementthe proposals Funds should be allocated in advance andthe number o projects should be reduced accordingly;

the UPU has an important role to play in helping coun-tries to oer the best quality o service or the deliveryo goods bought on the Internet The use o barcodes isan important element o this process;

the UPU is a vehicle o union and coordination Postaloperators cooperate but they also compete The UPU is

an organization which is fexible and open to discussion;it is an excellent platorm or communications among allthe stakeholders o the postal sector, and the 2006 UPUStrategy Conerence is a good example o this

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Ninth session

The conclusions

The participation and interventions o all the UPU Strategy Conerence speakers, including those rom inter-national organizations such as the UN, WTO, IMO, ISO and the World Bank, served not only to highlight the

important role o the UPU as a central platorm or postal sector debate, but also to add legitimacy to the roleo the UPU as one o the main actors in addressing the major economic and political challenges namely tradein services, migration, fnancial services that are acing the sector.

One act is evident rom the various presentations madeduring the conerence: the environment in which thepostal services operate is undergoing proound changes,changes which have accelerated to breakneck speed overthe last ew years In the words o Pascal Lamy, DirectorGeneral o the World Trade Organization, there is no get-ting away rom the globalization and internationalizationo trade today And, as was mentioned a number o times,the opening up o markets at both national and regional

level has also had an overwhelming impact on our sectorAnother eature is the emergence o new players in thepostal markets, and new partnership strategies betweenprivate and public operators, described by the FEDEX rep-resentative

However, against this background o radical changes, it wasparticularly interesting to consider the words o Mr CarlosH Almeida Custodio, Chairman o Brazilian Post: We livein a world o exclusion: digital exclusion, social exclusion,nancial exclusion and technological exclusion

Not only must the Universal Postal Unionassimilate all these acts and elementsaecting the postal sector, it must also ndsolutions The response should be basedon three key actors that emerged rom theconerence, namely:

interconnectiondevelopmentgovernance

which are the three cornerstones o UPUactivity

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Ninth session

The conclusions: InterconnectionThe concept o interconnection is one o the major chal-lenges acing the sector in the world today For the Univer-sal Postal Union, the interconnection o postal networksand, in a wider sense, o all the players in the postal sector,is o undamental importance As Hideo Shimizu, Vice-Min-ister or Policy Coordination, Ministry o Internal Aairs andCommunications, Japan, reminded us during the sessionon governance, the UPU adopts this approach in a spirit ocomplete impartiality and openness, or the benet o thesector as a whole

The rst theme o the conerence ocused on the role o thepostal services in the inormation society New technologieshave become an essential tool in developing our sector andimproving service to users

An intervention made by Canada during the Conerenceplaced the postal sectors role in the inormation society atthe strategic level In the words o Canada, the postal sectorand the UPU need to act as leaders in this eld Throughthe post project, the UPU has already embarked on thecreation o an integrated approach or Internet users Itonly remains to develop it, with the ull support o all UPUmembers

Through interconnection, it is possible not only to iden-tiy messages electronically, but also, most importantly, to

make them secure Here too, as was pointed out at the rstsession, the UPU has made great strides, with the recentadoption by the UPU o a worldwide standard or the digi-tal postmark (DPM), which makes the interoperability andauthentication o DPMs possible between postal operatorsworldwide This is a undamental aspect o the UPUs workon interconnecting postal networks and making electronicmessages more secure

Standards and standardization are key actors in intercon-nectivity In what, as was pointed out many times duringthe Conerence, is a rapidly changing environment, stan-dards play a crucial role The discussions during the Coner-ence conrmed the view that the appropriate level at whichto set common standards is international This should becarried out through an open approach to the other orga-

nizations which set worldwide standards, such as, princi-pally, the International Organization or Standardization(ISO) Alan Bryden, the Secretary General o the ISO, sup-ports the UPUs strategy o openness, which aims to bringtogether all players in the interests o greater eectivenessor the UPUs member countries and or the sector as awhole In a climate o internationalization, with the gapbetween public operators and the private sector becom-ing ever narrower, the need or standardization is steadilyincreasing Standardization is a major challenge in ensuringthe interconnection and interoperability o networks andservices, now and in the uture It promotes innovation andreduced costs

Interconnection is, above all, a matter o interconnecting

every aspect o the sector The uture success o the UPUdepends on this and, as Pascal Lamy also pointed out, theUPU is open to other postal sector players, through theConsultative Committee: it includes customer associations,industrial associations connected with the postal sector,and employees representatives

Another important subject discussed during the Conerencewas the issue o migratory fows As mentioned by severalspeakers, including Brunson McKinley, Director General othe International Organization or Migration (IOM), thisphenomenon can no longer be ignored by the postal world

The UPU could even go as ar as to say that this issue mustbe included in government agendas, operators strategiesand UPU activities The transer o migrants unds to theircountry o origin is a major challenge or the internationalcommunity The gures quoted were 167 billion dollars in2005, plus at least 80 billion sent through non-ocial chan-nels The Director General o the IOM reminded Conerencedelegates o the part that the postal services could, andshould, play in responding to this challenge

Interconnection, then, is a vital strategic objective or oursector In this context, acilitating the integration o theworld postal networks three dimensions physical, elec-tronic and nancial seems more necessary than ever Thisis the task we are undertaking; the work is under way, andthe initial results are encouraging

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Ninth session

The conclusions: DevelopmentThe second area o discussions during the Conerencethat warrants particular mention and ocus was the devel-opment o the postal network, with development beingdened in the broad sense, covering not only the role othe postal services in social and economic development, butalso the development o the postal sector; in other words,its growth and protability

A number o Conerence speakers included in their remarksthe United Nations Millennium Development Goals and therole o the postal services in economic and social develop-ment policies and in reducing poverty This was mentionedby the heads o international organizations, as well as byMr Sergei Ordzhonikidze, Director General o the Oce othe United Nations in Geneva, government ocials, includ-

ing Ms Maria Encarnacin Vivanco Bustos, Spains DeputyMinister o Transport and Public Works, and postal opera-tors, such as Brazilian Post Needless to say, as a special-ized agency o the United Nations, the UPU ensures that itsactivities are in line with the Millennium Goals The UPUsdevelopment cooperation policy aims not only to promotepostal services as a means o combating social and economicinequality, but also to raise the standard o the sector, par-ticularly in the developing countries And the way this is doneis by correcting disparities in the global network through adevelopment cooperation policy, designed and implementedto match as closely as possible the needs o member coun-

tries, particularly the least developed countries

Conerence delegates heard the development needsexpressed at regional level The Director General o SaudiPost, speaking on behal o the Council o Gul Countries,stressed the importance o regionalizing UPU policiesRegionalization has been the cornerstone o the UPUsdevelopment cooperation initiatives since 2005; it shouldalso be a key element o our uture strategy in this area

The rst regional development plan was adopted this yearby Arica The aim is to establish priorities that meet thespecic needs o the Arican postal sector through concrete,measurable projects involving all the players in the Aricanpostal sector This was one o the messages contained inthe presentation by Mr K Mampeule, CEO o South Ari-

can Post, in which he also reerred to the need to introducecost accounting, another priority area o the UPUs regionalapproach, and one which meets the particular needs othe countries by providing them with an essential tool ordetermining their costs

As His Excellency Mr Alpha Oumar Konar, Chairman othe Arican Union Commission, pointed out with such pas-sion and eloquence, the UPUs choices or the uture o thepostal sector in Arica can help to build the basic inrastruc-ture needed or the development o the continent Otherregional development plans are in preparation and will bediscussed with all the parties involved: governments, postaloperators, regional postal unions and regional and interna-tional lenders

For the UPU, development cooperation also means respond-ing, as ar as its means allow, to natural disasters and otherexceptional circumstances that have damaged the postalinrastructure Mr Guozhong Huang, Deputy Director Gen-eral o the UPU, reerred to our methodology, developedin 2005 and approved by the CA, or ensuring optimumeectiveness in dicult situations such as the atermath othe tsunami in South-East Asia, or Pakistan in the wake othe earthquakes This methodology would have been par-ticularly useul ater the cyclone which devastated an areao the Caribbean in 2004

As has been said so oten beore, there can be no pros-pect o growth or development or the postal sector with-out quality o service and customer satisaction This viewwas orceully expressed during the Conerence by severalspeakers, including Herbert-Michael Zap, the Presidentand CEO o IPC

The UPU will assume responsibility or constantly improvingquality o service worldwide, which also means strength-ening research and development activities through ourexisting partnerships with universities and technologicalresearch institutes This will enable us to make progress onmajor issues or our sector, such as RFID, which should beuniversally available, in industrialized and developing coun-tries alike

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Ninth session

The conclusions: GovernanceWhilst the development o the postal sector is conditionalon quality o service, the regulatory ramework is also akey element There can be no development or investmentwithout governance, as discussions during the Conerenceclearly showed O course, there is no single postal gover-nance model to suit all countries In this connection, theneed or close coordination between the World Bank andUPU initiatives has become clear And whilst postal sectorreorm and regulation are necessary, they must be basedon clearly established principles with obligations o result,as Mr Emmanuel Drai, o Latham and Watkins, put it sowell during his presentation

In addition to regulating the sector at national level, theUPU encourages its member countries to base their rules o

governance on the integrated postal reorm and develop-

ment plan, or IPDP Mr Mampeule, the South Arican PostOce CEO, whose objective is our IPDPs a year in Arica,pointed out that the aim o the IPDP was to provide guid-ance and methods or introducing postal reorm based ona global view o the postal situation in a given country

Postal reorm encompasses various elements: postal sectorregulation, awareness o the universal service and clarica-tion o the respective roles o the government, the regu-lator and the universal service operator This was clearlyrefected in the presentations by Mr Omas, Chairman othe Postal Rate Commission, and Mr Shimizu, the Japa-nese Vice-Minister or Policy Coordination One o the con-ditions or the success o these IPDPs is the involvement oall the stakeholders at national level

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The strategic direction

The Dubai Conerence achieved all its objectives. It provided the UPU and the postal sector with guidelines orpreparing the next strategy to be adopted in Nairobi, as well as enabling the UPU to strengthen its existingstrategy or implementing UPU actions and apply it to the process o developing the road map that must beollowed between 2008 and 202.

The method adopted by the UPU has to be open: the UPUmust consider all the elements making up the postal sector:governments and Posts, o course, but also the private sec-tor, industrial partners, customers, employees, and indeedinvestors and legal rms I the UPU did not share a globalstrategic vision, it would be ignoring much o the reality othe sector and the environment in which it operates Withthis in mind, the UPUs strategy should also take account othe individual situation o each country, whether it is indus-trialized or developing and, by extension, o each regionIt should also include refections on major internationalchallenges such as security issues, new technologies, the

globalization o trade, migratory issues and developmentpolicies

The opportunity oered by the concrete partnerships thatthe UPU is establishing with international organizations,some o which spoke during the Conerence, is one whichthe UPU intends to take and develop, particularly as theseorganizations are now, in their turn, opening up to the UPUand the postal sector

This open method must be based on an approach that isjoint and participatory The UPU bodies, the CA and thePOC, as well as the Consultative Committee, will be closelyinvolved in preparing the UPUs strategy, with the invaluableassistance o the Strategic Planning Group, whose Chairmanupdated the Conerence participants on current activitiesThe International Bureau will play its part in this process tothe ull, contributing ideas and initiatives The Dubai Coner-ence served as the oundation or this process

There is no doubt that this Conerencebroadened the outlook o the postal world

and provided a snapshot o its uture roleThe postal world o tomorrow is alreadybeing built today The UPUs role is to helpits member countries and the worldwidepostal sector move orward

Finally, the approach must be a responsible one, as theimplementation o the strategy will call or appropriatemethods As President Konar pointed out, the UPUs bud-get has been subject to the constraints o zero nominalgrowth or 10 years, despite being one o the smallest inthe United Nations system In act, the UPU is one o theonly UN organizations on which this constraint is imposedso strictly Proposals arising rom the uture strategy shouldbe evaluated in order to identiy sources o unding andpriorities, provided, o course, that these sources o und-ing are suciently stable to enable the UPU to continueits activities without jeopardizing or weakening the UPUs

missionsIn the words o the Kenyan representative, We are dealingwith a new culture and a new world

The conerence was moderated by Fouad Nader (President o Adrenale Corporation)

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Published by the International Bureauof the Universal Postal Union

Universal Postal UnionP.O.Box

3000 BERNE 15

SWITZERLAND

The report is available on the UPU websitewww.upu.int


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Universal Postal Union

Documents

Report Strategy Conference Dubai Report En