On the liberation of the postal market

Until 2009 a single company (formerly state owned) had a monopoly on the Dutch snail mail market, to be precise on the delivery of letters and packages lighter than 50 grams. This was widely considered a bad idea and in that year the liberal party managed to get a new postal law passed that made it possible for other companies to deliver mail.

I was one of the fans of the law for all the obvious reasons. Monopolies are a bad thing that damage markets. As it turns out I should have paid more attention to my own blog; when I wrote in 2006 about “the most costly factor: personnel”. Liberating the postal market has led to price competition, which is good, but it has also led to many more companies trying to get a piece of the ever shrinking pie of snail mail. Where there used to be one postman per neighbourhood (usually somebody who had walked that beat for years and was both trustworthy and knowledgeable), now there are many more (often part-timers plucked from a pool where the most important skill is being cheap).

The decreased turnover as a result of a lower mail volume combined and of the higher cost of delivering that same volume had to be compensated somehow, and it would seem that the mail companies simply slashed the salaries of the delivery personnel. Since then the press is rife with stories about postage workers dumping mail in canals, stealing packages, going on strikes and so on.

My suggestion to remedy this situation would be one of two. Either nationalize the expensive part, the delivery (and let the companies buy delivery at a fixed price), or grant the mail companies unique access to neighbourhoods (say: at most three companies operating a neighbourhood). The latter would be not dissimilar to what the government of Iceland did to prevent overfishing. Iceland introduced quotas, making it so that fishing boats would no longer all compete for the same fish.

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