RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/39
12 June 1998
(98-2436)
Council for Trade in Services Original:  English
POSTAL AND COURIER SERVICES
Background Note by the Secretariat
I. INTRODUCTION
This note has been prepared at the request of the Council for Trade in Services.  It provides
background information on postal and courier services, for discussion in the Council as part of the
information exchange programme. The work contains basic and general information on trade in these
services in order to facilitate further discussion of relevant issues and should not therefore beconsidered exhaustive.  Neither postal nor courier services were addressed as such in the course of the
Uruguay Round sectoral testing exercises and were not the subject of any previous background note.
Aside from information and data maintained by the Universal Postal Union, few other comprehensive
sources of data were identified, particularly on courier services.
In the GATS Services Sectoral Classification List (MTN.GNS/W/120), postal and courier
services are listed as subsectors of communication services, a sector which also includes
telecommunications and audiovisual services. In the UNCPC, these services are classified in a "post
and telecommunications" sector, reflective of a l ong-standing but increasingly outdated tradition of
postal and telecom services being offered by a single state monopoly. As the introduction of
competition and other reforms have taken hold in the telecommunications sector, one of the first
changes has usually been to allocate postal and telecom services to separate entities, with the postal
service entities retaining monopoly rights more comm only than their telecom counterparts.  For the
most part, public postal service providers are State owned and have a monopoly on most types of mail
services.  Courier services, usually  parcel delivery or expedited mail services, are often also supplied
by the postal monopolies but not reserved exclusively to them.  Courier services are normally
supplied by privately owned companies who compete with one another and with State postal service
providers. However, the competitive environment for public postal services is changing, as privateservice suppliers begin to expand into the correspondence market particularly in segments such as
business-to-private bulk mailings and direct mail advertising which is an increasingly popular form of
corporate marketing strategies. While corporatization and/or privatization of postal service
monopolies is beginning gradually to take hold, only a very few countries, such as Finland,
New Zealand and Sweden, have fully ended monopoly rights in their markets for the supply of public
postal services. A variety of significant postal se ctor reforms are, however, underway. For example, a
uniform plan for postal reforms is scheduled for implementation in the European Union and postal
reform legislation is under debate in the United States. Most often, consideration of liberalization of
postal services centres on where to draw the line between reserved and non-reserved services.
One of the important challenges to postal and courier services, both public and private, is
competition from other communications services such as facsimile, electronic-mail, and data
networks, particularly in the business-to-business market segment. About five years ago, the number
of international messages sent by fax assumed a larger share of the market than those conveyed by
post.  In 1996, for the first time, the volume of electronic mail in the United States exceeded the
number of letters delivered by the postal service. However, other segments such as business-to-privateS/C/W/39
Page 2
and private-to-private mail may be less affected by new communications technologies, so long as
public postal services are run in an efficient and customer-oriented manner and as access to postal
services remains more widely available to residential customers than in-home computer terminals.
At the same time, some market segments of these services are taking advantage of new
communications technologies. For example, electronic data interchange (EDI) is already consideredan essential tool for achieving fast and reliable service in the express mail industry.  In another
example, a major foreign express mail service supplier in Canada is planning a wireless radio network
to enhance its service and improve distribution.  Additionally, the new technologies stimulate growth
in some market segments. For both public and private delivery of parcels, the growing popularity of
home shopping offered over communications services, such as television and internet, contribute to
predictions for steady growth.
Definition of postal services.  In the Services Sectoral Classification List (MTN.GNS/W/120),
subsector 2A on postal services is cross-referenced to item 7511 in the provisional United Nations
Central Product Classification (UNCPC) (Series M. No. 77, 1991). This item contains four subitems:
(1) postal services related to letters consisting of pick-up, transport and delivery services of letters,
newspapers, journals, periodicals, brochures, leaflets and similar printed matters, whether for
domestic or foreign destinations; (2) postal services related to parcels consisting of pick-up, transportand delivery services of parcels and packages, whether for domestic or foreign destinations; (3) post
office counter services rendered at post office counters, e.g. sales of postage stamps, handling of
certified or registered letters and packets, and other post office counter services; and (4) other postal
services which includes mailbox rental services, "poste restante" services, and public postal services
not elsewhere classified (except postal giro and postal savings accounts which are classified inUNCPC under "services of monetary intermediaries") . The explicit presumption of the UNCPC is that
all the above represent services are supplied by national postal administrations.  There might also be a
relation between postal services provided by who lly government entities and the GATS Article I
provision excluding government functions.  Postal se rvices of a Member, whatever the status of the
postal supplier, would be services covered by the GATS so long as, and which is usually the case,they are supplied on a commercial basis.
Definition of courier services.  In the Services Sectoral Classification List, subsector 2B on
courier services is cross referenced to UNCPC item 7512 which contains two subitems: (1) multi-
modal courier services consisting of pick-up, transport and delivery services, whether for domestic or
foreign destinations of letters, parcels and packages rendered by courier and using one or more modes
of transport1;  and (2) other courier services for goods, not elsewhere classified, e.g. trucking or
transfer services without storage, for freight.
Relation to other services/sectors.  Postal and courier services are dependent on physical
means of delivery, particularly air and road transport services. Road transport may be a significant
means of delivery of parcels and other items within geographic regions or contiguous countries, and
air transport is the predominant means of delivery among distant locations. However, air and road
transport services are identified as sectors in their own right in the Services Sectoral ClassificationList.  Moreover, that list includes freight transportation among the subsectors of these and most other
transport subsectors. While the CPC explicitly excludes transport of mail by air from its definition of
courier services, first, it nowhere defines the scope of  "mail" and, second, it does not make clear
whether the exclusion applies only to "mail" services based exclusively on air transport or to any air
                                                     
1UNCPC specifies that these services can be provided by using either self-owned or public transport
media, but excluding courier services for mail by air which are classified in the UNCPC under "mail
transportation by air" in Air Transport Services. The distinction between these and similar UNCPC items under
postal services is that these are presumed to be services that can be provided by suppliers other than nationalpostal administrations.S/C/W/39
Page 3
transport component of any courier service suppliers' operations. Notably, the UNCPC makes no
similar exclusion for transport of mail by road mean s, even though such an item also appears in the
CPC under road transport services. These definiti onal ambiguities can result in overlap between
coverage of commitments in the different sectors or , at least, point to an important relation between
the commitments. Clarity regarding such  issues ma y be particularly important for highly integrated
courier services suppliers, such as those operating their own fleet of trucks and/or airplanes. Some
Members have dealt with the ambiguities by entering text in their schedules explaining the scope of
the courier service commitment with respect to means of transport. Nevertheless, given the way
courier services suppliers operate, it is likely that the exclusion of most air transport services by the
GATS Annex on Air Transport and MFN exemptions taken for measures relating to road transport
have an impact on courier services commitments undertaken.
II. ECONOMIC IMPORTANCE OF THE SECTOR
A.P OSTAL SERVICES
In 1995, 403 thousand million letters were handled by about six million postal service
employees throughout the world, according to Post 2005 , a study on postal traffic trends recently
issued by the Universal Postal Union (UPU). Detail ed data is presented in Table 1. Nearly 98per cent
of these items remain in the domestic service of the country of posting while just over 2 per cent cross
national borders as international postal service. According to the study, letter volumes worldwide are
expected to increase between now and 2005, despit e an expected loss of market share owing to
diversion to electronic media and growing compet ition from other service providers. The Director
General of the UPU has noted that in light of the information revolution, all current providers ofpostal services - whether or not they enjoy monopoly protection - will have to face a future
environment quite different from the present.
An annual increase of 2.5 per cent is forecast in domestic letter traffic worldwide between
1995-2005, compared to only 0.9 per cent between 1985 and 1995. In high income countries,
however, growth will slow from 2.7 per cent (1985 - 1995) to an annual average of 2.3 per cent. At
present 86 per cent of the domestic mail in industrial countries is generated by the business sector.
The UPU forecast for 2005 shows a significant in crease in the business-to-household segment,
accompanied by a decline in the household-to-household segment.
The core international postal services consist of nonexpedited delivery of letter post mail
(letters, small packets, printed matter, and publishers' periodicals). UPU forecasts that international
mail will  experience stronger growth, ranging from 3.4 to 5.2 per cent, with low-income countries
expected to have the highest average annual growth rate at 5.1 per cent.  In the United States in 1994,letter post mail accounted for 99 per cent of the Post al Service's total international mail piece volume
and 77 per cent of its total international revenues from postal services. In 1992, the latest year for
which market share data was calculated, the U.S. Postal Service handled over 1.2 billion pieces of
international letter post mail, accounting for US$930 million, or 75 per cent, of the Postal Service's
estimate of US$1.3 billion in total U.S. international letter post mail revenues.
Also according the UPU study, physical mail accounted for nearly 20 per cent of the world
communications market as a whole in 1995. Fax and telephone accounted for 75 per cent and
electronic mail just over 5 per cent. According to the study, the share of telephone and fax will remain
more or less constant up to 2005 but electronic mail should double. By contrast, the share of physical
mail in the communications market is expected to decline by 26 per cent. The decline, in the presenceof upward forecasts for physical mail volumes, reflects the fact that the total communications market
is growing at a faster rate than the postal market.
The UPU cites economic factors, which however vary greatly depending on region and
socio-economic environment, as the foremost determinant of letter traffic volumes. It ranks as secondS/C/W/39
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various postal factors such as quality of service. It described these and other factors such as
population growth and education as having a greater impact than technological factors and the
substitution of other means of communications (such as electronic mail and the Internet) when the
population as a whole is taken into account. Nevertheless, the UPU expects the greatest technology
substitution effect to take place in the business-to-business market in high-income countries, wheremore than 50 per cent of businesses will have access to electronic mail by the year 2005.
TABLE 1
Postal Service Statistics
Number of employees ( '000s)  Number of inhabitants served per
employee
1985 1990 1995 1985 1990 1995
Industrializedcountries2,580 2,670 2,540 302 301 327
Developing countries:
Africa80 90 100 5,262 5,131 5,569
Latin America and
Caribbean180 180 190 2,131 2,353 2,516
Asia and Pacific 1,850 1,930 2,140 1,399 1,468 1,447
Arab countries 100  100 110 2,014 2,186 2,323
Europe and CIS 1,150 1,120 1,020 390 420 467
World 5,940 6,090 6,100 811 859 932
Number of letter-post items Domestic service
('000,000s)Domestic, per capita
1985 1990 1995 1985 1990 1995
Industrialized countries 242,720 294,570 316,080 311 367 380
Developing countries: Africa 2,640 2,990 3,460 6 6 6
Latin America and Caribbean 4,750 5,060 7,420 12 12 16
Asia and Pacific 44,270 43,750 51,200 17 15 17
Arab countries 1,120 1,190 1,310 6 5 5
Europe and CIS 66,490 71,410 14,990 148 152 31
World 361,990 418,970 394,470 75 80 69S/C/W/39
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Number of letter-post items International service
('000 000s)International, per capita
1985 1990 1995 1985 1990 1995
Industrialized countries 5,097 5,110 5,022 6.5 6.4 6.0
Developing countries: Africa 422 514 615 1.0 1.1 1.1
Latin America and Caribbean 460 496 496 1.2 1.1 1.1
Asia and Pacific 1,236 1,247 1,453 0.5 0.4 0.5
Arab countries 714 589 646 3.7 2.7 2.6
Europe and CIS 728 830 780 1.6 1.8 1.6
World 8,657 8,786 9,012 1.8 1.7 1.6
Source: Universal Postal Union, Website http://www.ib.upu.org
B.C OURIER SERVICES
No comprehensive sources of trade data pertaining to courier services were identified at the
time this note was researched. At least for express mail services, one estimate placed the share of
services of all carriers, including public postal services, at about 57 per cent of a total international
mail market worth US$3.5 billion in 1992.  U.S. figure s show that its Postal Service handled express
mail in 1992 accounting for US$81.7 million, or 4 per cent, of an estimated US$2 billion total U.S.
international express services revenues.
However, available information on activities of the major courier service suppliers may shed
some light on the economic environment for these services.  Globally, the leading companies are DHL
Worldwide Express (DHL), United Parcel Service (UPS), Federal Express, and GD Express
Worldwide. Many such couriers have established affiliates in foreign countries to capitalize on rapidly
expanding global demand for express courier services. In the United States, courier services are
provided predominantly by large business enterprises, such as Airborne Freight Corp.,  DHL, FederalExpress, UPS, and approximately 10,000 relatively small independent messenger and delivery
services. In the U.S. market, the large companies tend to specialize in overnight courier services,
whereas the smaller companies more commonly provide same-day local delivery. Major European
suppliers include Kühne & Nagel, Jet Services, TAT Express and Securicor, while many small
companies operate on the national level offering intra- or inter-city services. In Europe, DHL’soperations reportedly are increasing by about 17 per cent annually despite highly competitive local
markets.
Expansion of foreign courier service suppliers in South America has reflected increasing
demand for expedited delivery services, as well as other factors such as the relative inefficiency of
public postal services. Geographic proximity has made South America an attractive market for U.S.courier service suppliers. DHL, the largest supplier of courier services to South America, now ships
about 2.5 million pieces of expedited parcels, packages, and similar products monthly to customers in
the region.  In addition, the activities of foreign courier service suppliers extend beyond bilateral
service between their country of origin and the country in which they have a commercial presence.
For example, about 35 per cent of  DHL’s business originating in South America is shipped to theUnited States, about 25 per cent stays within the region, and most of the remainder goes to Europe.S/C/W/39
Page 6
UPS and Federal Express also compete in the region.  For example, Federal Express operates in more
than 40 locations in Latin America and the Caribbean.
In Asia and the Pacific, DHL is the largest supplier of express courier services, accounting for
about 36 per cent of the region's shipments. Other leading suppliers are Australian-owned TNT
Express Worldwide, accounting for 27 per cent, Federal Express with 13 per cent, and UPS with 5 percent.  Economic growth in Asia and the Pacific had contributed to significant increase in demand for
courier services. To meet demand and improve capacity for overnight delivery, many courier service
suppliers establish distribution centers in the region which, in addition to facilitating service to
customers in the country where the center is located, enable them to establish air-cargo networks to
more easily distribute to other countries in the region.
III. ANALYSIS OF NATIONAL SCHEDULES
A.P OSTAL SERVICES
Six WTO Members have scheduled GATS commitm ents pertaining to postal services, and
only two appear to commit to fully opening their postal markets to foreign suppliers. Two of the
schedules indicate that the commitments are limited to "accelerated international mail" while one
other schedule limits the scope of the commitment to items above a certain weight level.  Such
specifications would seem to indicate that these commitments are confined to the types of service
usually scheduled under courier services. Finally, one of the six schedules lists services as being
reserved to a monopoly.
B.C OURIER SERVICES
Thirty-three WTO Members scheduled commitments on courier services. Table 2 shows that
of these 33 schedules, 42 per cent committed to market access for cross-border supply with no
limitations and 39 per cent listed no limitations on market access for commercial presence, an
important mode of supply for courier service operations. On national treatment for commercially
present suppliers, 42 per cent of the Members concerned listed no limitations and 58 per cent entered
limitations of some type.  It should also be noted that the commitments do not necessarily reflect thecurrent status of de-facto market access for courier services. Some Members who have not bound
these services in their schedules, nonetheless allow foreign courier service suppliers to operate in their
markets.
TABLE 2
Analysis of the 33 Schedules with Commitments on Courier Services
(Percentages of full, partial and no commitments by mode of supply)
Cross-border supply Consumption
abroadCommercial
presencePresence of natural
persons
FPNFPNFPNFPN
Market Access 42 30 27 55 33 12 39 58 3 15 76 9
National Treatment 45 30 24 55 30 15 42 58  0 9 79 12
F: Full commitment (indicated by "none" in the market access column of the Schedule)
P: Partial commitment (limitations inscribed in the market access column of the Schedule)N: No commitment (indicated by "unbound" in the market access column of the Schedule)
Note:  The figures in this table reflect only those entries inscribed under "courier services" commitments in the schedule.  It  should,
however, be borne in mind that entries made in the horizontal section of the Schedule relate to commitments made in this and al l other
scheduled sectors.S/C/W/39
Page 7
IV. HOW THE SERVICES ARE SUPPLIED, HOW THEY ARE REGULATED AND
TYPES OF MEASURES OFTEN PERCEIVED AS BARRIERS TO TRADE
As noted above, the relation between postal and courier services is that the latter represent a
subset of postal-type services, i.e. the express mail and parcel delivery, that are usually removed from
(or often were never subject to) the exclusive purview of national postal monopolies. It might beanticipated that the range of services removed from "reserved" status may grow, though probably
incrementally, in most countries, allowing existing  courier service suppliers to branch out into other
postal services and perhaps enabling new breeds of private postal service suppliers to evolve. Also, a
trend for liberalization may become more palatable as new means of electronic communications make
it incumbent on postal services to adapt structures and practices to lower costs and offer more price-
competitive and efficient services.
To the extent that corporatization, privatization and competition in postal services could
become more common, regulatory authorities will f ace issues similar to those recognized in the
liberalization of the telecommunications sector. Re -regulation to safeguard against anti-competitive
practices, to ensure the benefits of open markets and to protect consumers in a new environment may
become relevant. Some of the kinds of regulatory decisions involved could relate to tariff setting,cross-subsidization, universal service obligations, and standards for service quality.
A. POSTAL SERVICES
Despite this gradual opening up to competition, the characteristics of the postal service
suppliers are still fairly similar in most countries.  A national public postal service monopoly on mailitems up to a certain weight level remains the most common market structure for the service, although
a gradual erosion of the scope of the monopoly and the development of new postal-type services
outside monopoly areas have taken place.  According to the UPU, by 2005 the typical postal
administration will probably be a corporatized state enterprise with a monopoly or an exclusive
licence in the letter post market, but which is increasingly commercial in outlook.  However, such
monopolies are also likely to remain highly regula ted in terms of pricing matters. UPU foresees that
only a minority of postal service suppliers will be, or will be modelled on, fully private corporations.
In exchange for monopoly privileges, national regulation commonly holds national postal suppliers
responsible for providing universal service in the form of homogeneous and reasonable rates,
accessibility of letter boxes, a dense network of postal offices, and for meeting and improving upon
certain standards for quality of service.  Table 3 provides an overview of the regulatory structure and
levels of competition taking place in postal markets.  One interesting feature to point out in the table,is that while most low income countries have postal monopolies with fairly broad reservation of
services to them, the lower market shares attributable to their national postal suppliers would seem to
indicate that on a de facto basis, their suppliers  already face significant competition.
Since private courier companies often provide services that are more dependable, faster and
cheaper than those offered by the national postal service suppliers, the postal suppliers have beenincreasingly concerned in recent years about losing  market share in the growing international mail
market  to the private companies.  Moreover, as trade barriers have fallen, courier service suppliers
seek to take larger shares of additional international mail services. Postal service suppliers have also
been concerned about the effects of competition not only with private companies but also among
national postal service suppliers for bulk business mail. After express and parcel delivery services,bulk mailing is often one of the first to be liberalized. Reposting (or the posting of mail in a country
other than the country in which it is prepared) is another form of emerging competition, because the
volume of postal expenditure in some sectors such as financial services or mail-order selling has
spurred corporate customers to search for ways to take advantage of the lowest national postal rates
available. These developments are leading to new rivalries between the national operators as theybegin to compete with other national counterparts for reposting or for bulk mail clients within their
own territories. Efforts by postal services to reduce costs have also led to the use of franchising withS/C/W/39
Page 8
grocery stores, petrol stations, municipal offices often providing various postal services. In addition,
national operators have found it economically necessary to enhance their participation in growing
markets for services such as express mail or electronic mail.
Since 1874, international regulation of postal services has been conducted under the auspices
of the UPU, an international organization consisting of 189 members.  It's members are considered to
constitute a "single postal territory" within which they guarantee the free circulation of mail.  They
negotiate agreements and other instruments that coll ectively address issues that arise in the course of
the Members' responsibilities for effecting cross-border transit of mail. The Universal Postal
Convention, sets the basic UPU principles and guidelines for the exchange of letter post mail and to a
lesser extent for express mail.  Other UPU agreem ents and guidelines apply to parcel post and
financial services, such as postal money orders.  The Universal Postal Convention defines general
guidelines on international postal service and regulations on the operations of letter post mail.  These
include the rates, called terminal dues, that countries pay each other as compensation for processing
and delivering in-bound mail, the methods of calculating and collecting terminal dues, the maximum
and minimum weights, the size limits of letter post mail, and the conditions of acceptance. The
representatives of UPU members (i.e. the national postal service suppliers) may also enter intobilateral agreements to exchange express mail and plurilateral agreements to exchange all categories
of international mail under conditions more favourable than might be possible in negotiations at a
global level.
Legal and regulatory controversies are arisin g as competition in postal service markets
becomes more common and economically significant. At a minimum, the private suppliers already
compete with public postal suppliers in global and in most national markets in courier services.
Private sector competitors argue that the national postal services benefit unfairly from their status as
government entities and their positions as the designated national representatives to the UPU and its
deliberations. They argue that public postal suppliers' role in the UPU places them in the position ofbeing, at once, regulators and competitors. Of particular concern are two provisions of the 1989
Universal Postal Convention - one (Article 25) perm itting postal administrations to refuse to handle
mail brought into the country by private suppliers and another providing that terminal dues rates need
not be directly related to costs.  In an effort to ease some such concerns, the UPU has established a
private operators-UPU Contact Committee to provide for dialogue and to help determine areas of
common interest. Competitors also contend that the public postal suppliers gain a competitive
advantage by their ability to establish international mail rates without independent regulatory reviewand that the rates they charge for some services do not cover costs. Regarding terminal dues.
competitors are wary about some new cost-based terminal dues agreements being negotiated among
public postal suppliers. While postal suppliers say these agreements aim to bring the terminal dues
system more in line with costs, competitors argue that  they include provisions to discourage reposting
and that the higher terminal dues still disadvantage competitors since, if the parties exchange the samevolumes of mail, no payments are actually rendered.  But at the same time, some public postal
suppliers have begun to complain that some regulatory controls and responsibilities applied to them,
and which their competitors do not incur, make it more difficult form them to compete.S/C/W/39
Page 9
TABLE 3
Structure and Competition in the Postal Market
Status of national supplier Africa Central
America/
CaribbeanNorth America South
AmericaAsia & Pacific Western
EuropeEastern
Europe
Ministry 78% 90% 50% 82% 78% 65% 55%
Independent stateenterprise22% 10% 50% 18% 19% 30% 41%
Private company 0% 0% 0% 0% 3% 5% 4%
Post separated from
telecoms32% 36% 100% 56% 40% 95% 78%
Separation of regulator and
operator43% 33% 100% 100% 38% 62% 86%
Competition Asia &
PacificAfrica Eastern
EuropeWestern Europe
& NorthAmericaLatin America World
Domestic service:
Market share of  national
supplier 199589% 89% 95% 98% 63% 97%
Change by 2005 -4.9% -14.2% -9.6% -2.2% -2.9% -3.4%
International service:
Market share of  national
supplier 199581% 80% 91% 66% 85% 71%
Change by 2005 +2.2 -4.7 -11.4 -6.6 -13.7 -5.7
Volume of letter-post lost to electronic
substitution by 2005:   
Business-business 14% 23% 20% 12% 30% 17%
Commercial, excl.  advertising 7% 9% 9% 8% 26% 9%
Advertising 15% 10% 13% 5% 10% 11%
Financial 4% 11% 10% 8% 35% 16%
Competition by level of development Low
incomeMiddle
incomeHigh
income
Domestic service:
Market share of  national  supplier 1995 58% 91% 98%
Change by 2005 +18.2% -12.2% -2.4%
International service:
Market share of  national supplier 1995 70% 92% 67%
Change by 2005 +5.9% -11.7% -5.9%
Volume of letter-post lost to electronic substitution by 2005:   
Business-business 7% 22% 12%
Commercial, excl.  advertising 23% 9% 8%
Advertising 25% 10% 5%
Financial 2% 21% 7%
Source: Post 2000 , Universal Postal UnionS/C/W/39
Page 10
B.C OURIER SERVICES
The development of multinational enterprises and the increasing requirements of professional
clients have since the 1970s played a major role in the growth of the express mail service.  Industrial
subcontractors have become major clients of the express service, with enterprises trying to reduce
their stocks, both of intermediate products and finished goods (just-in-time method).  In a recent ILOstudy on multinational enterprises in the courier service industry, it was noted that one of the main
developments in recent years has been the growth of the role of "integrators", large international
operators which have become specialized in international parcel services.  They are referred to as
"integrators" because they combine land and air transport services with freight forwarding, customs
broking and other information-intensive activities th at enable them to provide efficient pick-up and
delivery services.  Some railway companies have established their own mail service and DHL has
offered equity participation to two airline companies.
Suppliers of courier services most commonly gain access to foreign markets through
commercial presence, usually in the form of foreig n affiliates in the market to be served. In some
countries, however, suppliers deliver packages through contractual agreements with locally owned
service suppliers, often trucking or air transport operations in the market to be served. In addition to
transporting packages within the country in wh ich a commercial presence or other arrangement is
maintained and between that country and its country of origin, a service supplier also typically
supplies service between countries in the region where it has established a commercial presence and
between countries in a region and other, or third-country, destinations abroad. Couriers may establish
national and/or regional sortation hubs (distribution centers) at airports and other locations where their
products are routed (usually by truck) to sub-hubs for final delivery. A large portion of trade incourier services is carried out by air. Even among contiguous countries, air carriage may predominate
and a more limited amount of inter-country trade, e.g. 20 to 25 per cent between the United States and
Canada, may be conducted by the use of trucks crossing national boundaries. Normally, in such
circumstances, truck deliveries are reserved for deliveries of no more than 500 miles from national
borders.
Among the types of measures that can hamper the free flow of trade in courier services are
customs regulations, the sometimes regulatory role of the postal monopolies or the scope of their
privileges, licensing requirements, postal taxes, and concession fees. The benefits of GATS
commitments can be also be limited in so far as  they may not adequately address operational issues
such as customs clearance, self-handling, or, at times, the ability of the foreign supplier to conduct its
own pick-up and delivery. Such measures can delay service, add to the cost of service, or limit
business opportunities.  For example, some countries require foreign couriers to use locally contractedservice suppliers for pick-up, delivery, and customs clearance procedures.
Regarding the role of the national public postal service monopolies, in some jurisdictions, the
national monopoly is responsible for extending licences to courier service suppliers, while at the same
time offering its own express mail or parcel delivery  services in competition with these suppliers.
Postal administrations of some countries may impose regulations to control pricing and  groundhandling that may function to give a working advantage to the monopoly postal service supplier in
services in which it competes with other courier service suppliers. For example, in some jurisdictions,
taxes and concession fees applied to courier service suppliers are imposed directly by the national
postal service supplier. In other cases, the scope of courier services commitments may be limited to
certain of the full range of courier services that are not reserved to the national postal service supplier.However, there are also instances in which the scope of services that courier service suppliers are
permitted to undertake can be broader than usual, encompassing some services most typically
reserved to the national postal supplier such as delivering periodicals, selling postage stamps,
handling certified and registered mail, or renting postal boxes.S/C/W/39
Page 11
Customs practices and procedures can most significantly affect trade in courier services, for
example, if jurisdiction has no customs clearance policies that recognize courier services' products as
such.  This may require them to be treated under time-consuming procedures designed for regular
cargo, if unaccompanied, or under passenger-type allowances for value and weight, if accompanied
by an employee of the courier service supplier .  Another example would be customs procedures
offering very limited time periods available for clearance, a practice that can defeat the very customer
service objectives offered by express mail suppliers to guarantee customer service every day at all
hours.  Also, some national customs procedures require shipments to be forwarded to approved
warehouses for inspection.  It should be noted, however, that many national efforts aimed at customs
reform and streamlining more generally, are helping to address some of the issues raised here with
respect to courier services. Moreover, the World Customs Organization, now in the process of
reviewing its Convention, has under consideration some amendments aimed at simplifying customsprocedures affecting postal and courier services.
As noted earlier, since the courier services often encompass some  components of other
service industries such as air and road transpor t, commitments undertaken on courier services may be
affected by market access limitations in these other relevant service sectors and by various regulatory
requirements relating to the means of transportation they may use.  One example may be air transportregulations prohibiting express mail service suppliers to self-handle their own aircraft or rules
requiring trans-shipments on an arriving aircraft to be formally imported and re-exported. Other
practices can include surcharges on aircraft services or unclear methods of computing airport user
fees.  Some countries regulations limit the ability of foreign courier service suppliers to obtain the
variety of licenses they may need (e.g. trucking, customs, postal, freight forwarding, brokerage,warehouse) to efficiently provide their services. Some such licenses may be restricted to nationals or
extended only to monopoly concessions.
In addition, regulatory requirements relating to personnel, vehicle fleets, facilities, and
communications can be relevant.  Such measures that are horizontal in nature can include limitations
on foreign investment, acquisition of land, access to domestic credit, and the entry and temporary stayof natural persons supplying services to that country.  In this vein, MFN exemptions on horizontal
measures can be as important a consideration as limitations listed in horizontal sections of schedules.
Such measures may include those related to movement of natural persons  (e.g. preferential work
permit arrangements, or labour market tests).
V. SOURCES OF INFORMATION/DATA AND POINTS OF CONTACT
Universal Postal Union
Case Postale
3000 Berne 15
Switzerland
Tel. +41 31  350 33 60,
Fax: +41 31 350 31 10Internet:  http://www.ib.upu.org
Note:  The UPU website presents, among other things, extensive data on postal services and the national postal service
suppliers of its members. In addition, it contains country-by-country descriptions of the structure and regulatory situation,
including the extent of competition in the supply of postal services,  for 121 of its 189 member countries.S/C/W/39
Page 12
Association of European Express Carriers
(AEEC)
Brussels, Belgium
Tel: +32 (2) 640.04.95
Fax: +32 (2) 640.50.70, (2) 640.55.57
European Express Organisation (EEO)
Brussels, Belgium
Tel: +32 (2) 772.15.23
Fax: +32 (2) 772.11.26
e-mail: 100666.2361@compuserve.com
Web site: www.euroexpress.org
South African Int'l Courier Association
Johannesburg, South Africa
Tel: +27 (11) 978-3685
Fax: +27 (11) 978-3682
Association of Int'l Courier & Express
ServicesLondon, Heathrow, United Kingdom
Tel: +44 (1753) 680550,
Fax: +44 (1753) 681710,
e-mail: Aices@btinternet.com
Web site: www.aices.orgAir Courier Conference of America (ACCA)
Washington, D.C., United States
Tel: +1 (202) 452-0770
Fax: +1 (202) 833-3636
Int'l Air Couriers Association of Australia
(IACAA)
Sydney
Tel: (2) 9350 8100, (2) 9350 8118,
Fax: (2) 9350 8199
Irish Association of Int'l Express Carriers
DublinTel: (1) 6765633,
Fax: (1) 6765641
Nigerian Int'l Air Courier Association
(NIACA)
LagosTel: (1) 824202, (1) 824214, (1) 824218
Asociacion Española de Couriers
Internacionales
Madrid
Tel: (91) 310 10 32Fax: (91) 319 57 65S/C/W/39
Page 13
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