The Polish mail market is free

January 29, 2013 in Banking & Finance, Business News, General, Markets, News, Polish Business, Politics, Uncategorized

Polish mail market 300x158 The Polish mail market is free The Polish mail market has been under the monopoly of the National Post (Poczta Polska) for decades. The last years have brought a slight improvement due to parts the market becoming available to private operators. Starting January 1st, 2013 new legislation has freed the market also for letters weighing under 50 grams. Is this the beginning of the end for the national operator?

 

The postal market is very lucrative in any country. In Poland, private operators have been struggling for years to convince the Parliament to change legislation and allow them to work in a typical, competition based environment. A few years back, the Polish mail market has been partially set free – private companies were allowed to transport packages, including letters, having weight in excess of 50 grams. Apart from that, they could also transport all marketing material (meaning all deliveries without a specific address).

That has caused the Poczta Polska to loose a fair percentage of the market share. Pretty much all marketing / advertising mail has been moved to private carriers. Also, many corporations using mass mailing (such as mobile phone or internet providers, who mail thousands of bills to their customers each month) have chosen private operators to do the job for them.

How could that have happened if letters up to 50 grams (such as bills and invoices) were still restricted to the only official Polish mail operator? Well, a common Polish saying is “Polak potrafi” which means, more or less, that the Polish guy will always find a way icon smile The Polish mail market is free And they did – the weight of all letters has been artificially increased by inserting either a small metal plate or a paper notebook into the envelope.

Needless to say, this practice combined with a price fight with Poczta Polska forced the private operators to keep their profit margins on letters very low. But they still managed to get themselves a good share of the Polish mail market value. And now this will benefit them a lot …

Starting from this year, the market was made free also for letters having weight below 50 grams. So those who made it through the hard times will now profit from their patience. But is the Polish mail market really free from any monopoly?

Unfortunatelly, this is not the case. The Poczta Polska still retains the right, at least for the next three years, to be the only provider of all governmental letters and packages (which means all communication between any government istitution such as a court or the tax people will have to go through the national operator). Furthermore, the delivery of money will also remain with them (over 40% of all Polish retired people receive their pension still through the postman rather than through a bank transfer). So the monopoly stays, and the private guys are not happy about that.

But is government protectionsim the only issue here? After all, the private carries, of which the largest one is inPost belonging to the Integer SA group,  do not have the full capabilities needed in the Polish mail market. The biggest issue is to provide an adequate level of service in the small, rural areas of Poland. Those are town and villages with very few citizens who use only the most basic postal products and are of a relatively small value to the Polish mail market in general. But they still need to have a post office and they need to receive their pensions. And this seems to be the main strong point of the Poczta Polska.

Integer SA, which I mentioned above is actually a very fast growing Polish company. Under their inPost brand, they have developed what is now calles a “Paczkomat” which is basically a mail order machine. As especially online shopping becomes more and more popular, a lot of people are recieving packages with purchased goods. With a “Paczkomat” you don’t need to be home in time for the courier / driver to arrive, neither do you have to wait in line at a post office to pick it up. The inPost guys will deliver it to the machine, which will be conveniently located next to your nearest gas station or mall and you can pick up your package even at 3 AM.

The company has found a strategic investor, I believe, and is now expanding the “Paczkomat” service to other EU countries. It’s a great idea and works wonders in terms of assistance to online shopping. The Polish mail market has certainly gained from Integer’s incentives and they continue to develop their business.