REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the application of the Postal Services Directive (Directive 97/67/EC as amended by Directive 2002/39/EC and 2008/6/EC)
Date: 2015-11-17
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: cross-border transport, delivery, electronic mail, free competition, postal service, provision of services, services of general interest, single market, universal service

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 17.11.2015  COM(2015) 568 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the application of the Postal Services Directive (Directive 97/67/EC as amended by Directive 2002/39/EC and 2008/6/EC) {SWD(2015) 207 final}  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE 
COUNCIL 

On the application of the Postal Services Directive  

(Directive 97/67/EC as amended by Directives 2002/39/EC and 2008/6/EC) 

1.  This  Application  Report  sets  out  how  the  Postal  Services  Directive  has  been 

implemented and how the postal market is developing 

In  February  2008  the  European  Parliament  and  the  Council  adopted  Directive  2008/6/EC 
(hereafter,  "the  Third  Postal  Services  Directive")1,  which  introduced  the  legal  basis  for  the 
accomplishment of the internal market for postal services by providing the last legislative step 
in  the  process  of  gradual  market  opening.  It  set  a  deadline  for  full  market  opening  of  31 
December  2010  for  16  Member  States2  and  31  December  2012  for  the  (then)  remaining  11 
Member  States.3  The  Third  Postal  Services  Directive  also  strengthened  the  tasks  and 
competences  of  national  regulatory  authorities,  changed  the  manner  in  which  the  universal 
postal  service  could  be  provided  and  financed,  required  access  to  certain  elements  of  the 
postal  infrastructure  and  extended  consumer  protection  provisions,  and  required  the 
Commission to provide assistance to Member States on its implementation, including on the 
calculation of any net cost of the universal service.  

Furthermore,  Article  23  of  Directive  2008/6/EC  requires  the  Commission  to  report  on  the 
application  of  the  Directive  to  the  European  Parliament  and  Council  every  four  years, 
providing  appropriate  information  on  developments  in  the  sector.  Although  this  provision 
states that  a report will  be submitted by December 2013, the report was postponed  in  order 
allow time to examine the early effects of full market opening in all Member States. 

This Application Report summarises how the Postal Services Directive (Directive 97/67/EC 
as  amended  by  Directives  2002/39  and  2008/6/EC)  has  been  implemented  across  the 
European Union and the main developments that have taken place in the postal market since 
December  2008.4  In  line  with  Article  23  of  Directive  2008/6/EC  it  provides  information 

1 Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 
97/67/EC with regard to the full accomplishment of the internal market of Community postal services,  OJ L52, 
27 Feb 2008, p. 3 
2Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Netherlands, Portugal, 
Slovenia, Spain, Sweden, UK 
3  Cyprus,  Czech  Republic,  Greece,  Hungary,  Latvia,  Lithuania,  Luxembourg,  Malta,  Poland,  Romania  and 
Slovakia. Although Croatia formally joined the EU on 1 July 2013, its postal market was fully liberalised from 1 
January 2013.   
4 This is the Fifth Application Report of this kind since the adoption of the Directive 97/67/EC. The previous 
reports can be found here: http://ec.europa.eu/growth/sectors/postal-services/legislation/index_en.htm.  

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concerning  economic,  social  and  employment  patterns  and  technological  aspects,  as  well  as 
on quality of service. The Application Report is accompanied by a Staff Working Document 
which provides more detailed information and includes an Annex on the calculation of the net 
cost of the Universal Service Obligation. 

Various  sources  have  been  used  to  draw  up  the  Report  and  the  Commission  Staff  Working 
Document,  including  studies  on  Main  Developments  in  the  Postal  Sector  (2008-2010,)5 
Pricing  behaviour  of  postal  operators,6  Main  Developments  in  the  Postal  Sector  (2010-
2013),7 a number of reports by the European Regulators Group for Postal Services (ERGP),8 
contributions  in  the  context  of  the  Postal  Directive  Committee  (PDC)  and  the  Postal  User 
Forum,9 Eurostat data up to 201210 and the Commission's own postal statistics for the period 
after 2012 following Eurostat's decision to stop the dedicated collection of statistical data for 
the postal sector, as well as Universal Postal Union figures.11 Given the time lag involved in 
the  collection  and  production  of  statistics,  in  many  instances  the  most  recent  statistics 
available are for 2013 but where possible more recent information has been used to give an 
indication of the latest developments. 

2.  Affordable  and  reliable  postal  and  parcel  services  are  still  crucial  for  the  single 

market 

Postal services continue to play a vital role across the European Union, although the nature of 
that  role  is  changing  as  new  technologies  are  driving  both  e-substitution  and  an  increasing 
volume of online purchases. The ability to send letters and parcels to arrive within a specified 
time at a definite price to all parts of the European Union remains a fundamental contributor 
to  social,  economic  and  territorial  cohesion  and  the  development  of  the  single  market.  The 
huge potential of e-commerce means that affordable and reliable parcel delivery services are 
more important than ever to help realise the potential of the Digital Single Market.12 

5 Copenhagen Economics, Main Developments in the Postal Sector (2008-2010), Copenhagen, Denmark, 2010 
6 Copenhagen Economics, Pricing behaviour of postal operators, Copenhagen, Denmark, 2012 
7 WIK-Consult, Main Developments in the Postal Sector (2010-2013¸ Bad Honnef, Germany 2012 
8 For further information about the ERGP, including their reports see http://ec.europa.eu/growth/sectors/postal-
services/ergp/index_en.htm 
9  This  dialogue  group  was  created  by  Michel  Barnier,  the  former  Commissioner  for  the  Internal  Market  and 
Services,  in  2011.  It  brings  together  postal  services  users  (end  consumers,  SMEs,  businesses  and  e-retailers), 
postal  operators  and  trade  unions  to  analyse  the  effects  of  postal  liberalisation  and  seek  constructive  ways  to 
deliver better postal services to customers. The Forum, which takes place in Brussels at yearly basis, is intended 
as  a  means  of  obtaining  direct  feedback  from  customers  on  the  effects  of  the  European  postal  reform, 
requirements for sustainability in the postal sector and on the direct link to e-commerce.  
10http://ec.europa.eu/eurostat/statistics-explained/index.php/Postal_service_statistics_-

_universal_service_providers 

11 http://www.upu.int/en/resources/postal-statistics/about-postal-statistics.html 
12 See COM(2015) 192 final Communication from the Commission to the European Parliament, the Council, the 
European Economic and Social Committee and the Committee of the Regions. A Digital Single Market Strategy 
for Europe. http://ec.europa.eu/priorities/digital-single-market/index_en.htm 

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3.  Independent  regulatory  oversight  has  improved,  though  enhanced  oversight  of  the 

parcel market is needed to keep pace with changes in that market 

National Regulatory Authorities continue to fulfil a crucial role underpinning and overseeing 
the  application  of  and  ensuring  compliance  with  the  Postal  Services  Directive  in  Member 
States.  They  are  increasingly  combined  with  Regulators  for  other  communication  services 
(e.g.  electronic  communication  services,  broadcasting).  The  European  Regulators  Group  for 
Postal  Services  (ERGP),  established  in  2010,  has  improved  consultation,  coordination  and 
cooperation among the National Regulatory Authorities at the European level.13   

Historically  National  Regulatory  Authorities  have  tended  to  focus  on  letters.  Given  the 
decline  in  letter  volumes  and  growing  number  of  parcels  driven  by  e-commerce  sales, 
stronger regulatory oversight of and more comprehensive data on the parcel market is needed 
to gain a full and accurate picture of the overall postal and parcel markets and to develop the 
full potential of the Digital Single Market.  

4.  An affordable and reliable universal service is provided for letters 

Member States are required to provide for the collection and delivery of letters and parcels on 
at least five working days each week, with a specified quality at all points in their territory.14 
The  number  of  Member  States  where  this  frequency  requirement  is  exceeded  (i.e.  with 
delivery on six days) is declining.15 Overall there is a trend towards the reduction of the types 
of  item  which  fall  under  the  universal  service  obligation,  although  many  Member  States 
include items other than single piece16 letters in the scope of the universal service obligation, 
for example bulk letters or parcels, advertising mail, or newspapers. All Member States, with 
the exception of Germany, have formally designated the incumbent national postal operator as 
the "universal service provider". In Germany, the historical national postal operator acts as the 
universal service provider. 

The vast majority of domestic letters are delivered the next working day (providing they are 
sent using a next  day service, rather  than a  deliberately slower and cheaper alternative)  and 
intra-EU mail delivery continues to exceed the quality standards specified in the Directive.17 

13 See Commission Decision of 10 August 2010 2010/C 217/07   
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:217:0007:0009:EN:PDF 
14  The  overall  framework  is  set  out  in  Article  3  of  Directive  97/67/EC.    This  requires  one  clearance  and  one 
delivery not less than five working days each week; the clearance, sorting and transport of postal items up to two 
kilograms and postal packages up to 10 kilograms; and services for registered and insured items.  
15  WIK-Consult,  Main  Developments  in  the  Postal  Sector  (2010-2013)  and  ERGP  (14  (23)  Report  on  the 
Benchmarking of  the Universal Service Tariffs updated 
16 Single piece refers to individual items or aggregated items of sufficiently low volume that they do not qualify 
for bulk discounts so the price and service offered is the same as for individual items.   
17  The  date  of  posting  to  be  taken  into  account  is  the  same  day  as  the  item  is  posted  providing  the  deposit  is 
before the last collection time notified for that particular access point (i.e. post box or post office).  In 2014 the 
average time for mail delivery in Europe was 2.4 days, with 90.6% delivered within the three days after posting 

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Most  Member  States  have  established  a  price  cap  to  ensure  that  basic  postal  services  are 
affordable.  In  many  Member  States  prices  for  stamps  have  increased  over  recent  years  in 
general in line with inflation rates and in order to help compensate for the fall in the number 
of  letters  being  sent.18  Between  2012  and  2013  tariffs  for  a  20  gram  letter  increased  on 
average  by about  5.6%19 however  this  had  no significant impact  on  the  affordability of  this 
service for EU citizens, which still remains affordable, especially in comparison to household 
expenditure for other means of communication (e.g. mobile telecommunications).  

All Member States ensure that all providers of postal services have a transparent, simple and 
inexpensive  procedure  for  dealing  with  complaints  from  users,  and  most  universal  service 
providers have a system of compensation. 

5.  Accurate and comparable information about any net cost of the universal service is 

essential 

In the event that the provision of the universal service in a Member State results in a net cost 
that creates an unfair burden on the universal service provider, the Postal Services Directive 
sets out ways in which the so-called 'net cost' of the universal service obligation that represent 
an  unfair  financial  burden  for  the  designated  universal  service  provider(s)  can  be 
compensated. However, in order to provide funding and ensure it is compatible with rules on 
State  aid,  the  costs  have  to  be  calculated  in  a  comparable  fashion.  The  Annex  to  the  Staff 
Working Document which accompanies this Report sets out different methods to calculate the 
net costs of the postal universal service obligation that have been found to be consistent with 
Annex I of the Postal Services Directive. 

6.  Competition has developed slowly for letter post and some operators have behaved 

in an anti-competitive way 

Despite full market opening across the EU by 2013, competition in the letter markets has been 
slow to develop in most Member States and universal service providers have retained majority 
markets  shares  in  Member  States.  Of  the  fifteen  Member  States  that  fully  opened  their 
markets  before  2011,  eight  had  over  5%  competition  in  the  letters  market  (by  volume)  by 
2013. In those Member States that opened their markets after 2011 competitors had achieved 
over 5% of the letters market by mid-2013 in five Member States.20 Where competition in the 
letters  market  has  developed,  it  is  more  widespread  for  end-to-end  delivery  provided  by 
operators  who  created  their  own  distribution  network  to  deliver  directly  to  recipients 

and 97.8% within five days. Source: International Post Corporation (2014) International Mail Quality of Services 
Monitoring UNEXTM 2014 results .  
18 WIK-Consult, Main Developments in the Postal Sector (2010-2013) 
19 European Commission, Postal Statistics Database 
20 ERGP(13) 38 rev1 Report on End-to-End Competition and Access in European Postal Markets 

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themselves.  Access  competition,  where  other  operators  hand  over  letters  to  the  universal 
service provider for final delivery after pre-sorting has developed in Slovenia and the UK, as 
well  as  Germany.  In  several  Member  States,  National  Competition  Authorities  have 
condemned the provider of the universal service for anti-competitive behaviour in form of an 
abuse  of  a  dominant  position.  Cases  include  illegal  rebates  to  business  customers,  margin 
squeeze  and  predatory  pricing.  These  practices  can  have  the  consequence  of  foreclosing 
competition. Market entry and development of competition may also be discouraged through 
some regulatory practices, such as the imposition of license conditions for new entrants which 
may go beyond the scope permitted by the Directive.  

7.  The number of letters being sent has declined as e-substitution has increased  

The number of letters sent using universal services providers in the EU has declined from an 
estimated 107.6 billion in 2008 to 85.5 billion in 2013.21   On average between 2007 and 2010 
the decline was 4.3% per year in terms of volume and 5.2% per year in revenue.22  Between 
2010  and  2011  the  decline  rate  slowed  to  3.3%  and  1.4%  respectively  but  rose  to  4.85% 
between  2012  and  2013  (in  terms  of  volume)  for  the  EU28.23  In  general,  direct  mail 
(advertising) and publications have been less affected than letters, though Member States with 
more mature markets for letters have experienced the greatest decline, and this is expected to 
continue. For example in Denmark mail volumes have fallen by over 60% between 2000 and 
2014, with a further decline of 15% in the first quarter of 2015.24 In the Netherlands there was 
a 13% decline in the first quarter of 2015, and volumes are predicted to fall between 32% and 
49% between 2010 and 2020.25  

As letter volumes differ significantly between Member States, and in view of current rates of 
decline,  some  of  the  Member  States  are  unlikely  to  ever  reach  the  letter  volume  levels  that 
Member States with mature postal markets previously had. Therefore, even if the decline in 
letter  volume  in  less  developed  postal  markets  is  lower  in  relative  terms  it  is  nevertheless 
likely  to  have  a  significant  impact,  given  the  smaller  economies  of  scale  than  in  the  more 
mature markets.  

21Universal  Postal  Union,  number  of  letter  post  items  domestic  service  and  international  service  dispatch 
estimates  for  EU27.  Universal  Postal  Union  statistics  include  member  designated  operators  of  the  universal 
postal union only.   
22 WIK-Consult, Main Developments in the Postal Sector (2010-2013) 
23  WIK-Consult,  Main  Developments  in  the  Postal  Sector  (2010-2013)  and  European  Commission  Postal 
Statistics Database; own calculations 
24 Post Nord, Annual and Sustainability Report 2014, 2015, Post Nord, Interim Report Q1 2015, 2015.  
25 WIK – Consult, Developments in the Dutch Postal Market, 2011 

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8.  Parcels are a growth area but consumers and e-retailers complain about the quality 

and costs of cross-border delivery services 

There  is  no  clear  consensus  about  the  size  of  the  European  parcel  market.26  For  example 
estimates of the size of the European parcel market suggest values of EUR 60 billion for the 
combined  European  courier,  parcel  and  express  markets  in  2010;27  EUR  47  billion  in  2011 
(including  shipments  up  to  2,500kg);28  EUR  37  billion  for  the  parcel  and  express  market  in 
2011;29 and EUR 53.5 billion in 2014.30 Even counting parcels dispatched by universal service 
providers  alone,  the  EU  parcel  market  has  grown  from  an  estimated  1.65  billion  ordinary 
parcels  in  2008  to  around  1.96  billion  in  2013.31  The  number  of  parcels  per  capita  does 
however  differ  greatly  between  Member  States.  Estimates  for  the  whole  parcel  market 
indicate a range in parcels per capita from almost 30 (Germany and the UK) to around two 
(Poland, Romania, Croatia, Latvia) for 2011.32  

As parcel services were never part of the previously  reserved area,33  competition  appears to 
have  developed  to  a  greater  extent  in  the  parcel  market  than  in  the  letter  market.  'Express' 
operators such as UPS, DHL, TNT and FedEx as well as courier companies who traditionally 
focused more on value-added business to business (B2B) services are increasingly developing 
their  business  to  consumer  (B2C)  services  to  take  advantage  of  the  growth  in  e-commerce, 
and new companies are entering the market. At the same time, universal service providers are 
developing more sophisticated parcel delivery services, for example by guaranteeing delivery 
times, to take advantage of online shopping. There is thus some convergence in the products 
and services offered by different types of delivery operator and the boundaries between them 
are becoming more blurred. 

Concerns do, however, persist about the affordability, accessibility and availability of cross-
border  parcel  delivery  services:  the  absence  of  delivery  features  (e.g.  track-and-trace 
information),  poor  price  transparency  and  high  prices  are  repeatedly  amongst  the  main 
complaints  from  both  consumers  and  e-retailers.34  Alongside  the  Digital  Single  Market 

26 This mainly stems from different market definitions, especially regarding the weight limit of shipments and 
the service characteristics, different methodologies as well as lack of data that covers all delivery operators. 
27 TNT Express  (2012), 4Q 2011 Analysts presentation: 2011 Highlights and Strategy update, 21. February 2012 
28 AT Kearney, Europe's CEP Market: Growth on New Terms, 2012 
29 WIK-Consult, Main Developments in the Postal Sector (2010-2013) 
30 Apex Insight, European Parcels: Market Insight Report 2015, 2015 
31  Universal  Postal  Union,  Number  of  ordinary  parcels,  domestic  service  and  number  of  ordinary  parcels, 
international  service  –  dispatch  estimate  for  EU27.  Data  only  collected  from  designated  operators  of  the 
universal postal union. http://www.upu.int/en/resources/postal-statistics/about-postal-statistics.html 
32 WIK-Consult, Main Developments in the Postal Sector (2010-2013), p225 
3397/67/EC  permitted  ordinary  correspondence  of  up  to  100g  to  be  reserved  to  the  universal  service  provider.  
2002/39/EC reduced this to 50g.  
34 See for example Civic Consulting for Executive Agency for Health and Consumers, Consumer market study 
on the functioning of e-commerce and internet marketing and selling techniques in the retail of goods, 2011; FTI 
Consulting, Study on intra-community cross-border parcel delivery, 2011; Copenhagen Economics, Study on the 
state of play of EU parcel markets with particular emphasis on e-commerce. 2013; Special Eurobarometer 398 
Internal  Market  Report,  2013;  Flash  Eurobarometer  413:  Companies  Engaged  in  Online  Activities,  2015  and 

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Strategy,35  adopted  on  6 May  2015, the  Commission  launched  a  public  consultation  to  help 
identify solutions to improve cross-border parcel delivery and to gain a better understanding 
of how this market functions. The Commission will launch measures in the first half of 2016 
to improve price transparency and regulatory oversight of cross-border parcel delivery. This is 
in  addition  to  the  actions  already  undertaken  by  the  Commission  and  different  stakeholders 
following the adoption in 2013 by the Commission, of the Roadmap for completing the single 
market for parcel delivery.36 

9.  Employment by universal service providers has declined, primarily as a result of e-

substitution and working conditions are more varied  

In 2013 around 1.2 million people were employed by universal service providers in the EU, 
and  in  some  Member  States  universal  service  providers  were  responsible  for  a  notable 
proportion  of  domestic  employment.37  Employment  generated  by  other  postal  operators 
increases this total and an estimated 272,000 were  directly employed by the express industry 
in 2010.38 

Falling letter volumes, combined with modernisation and increasing automation are having an 
impact on employment levels. Universal Postal Union figures report a fall in the total number 
of staff employed by universal service providers of about 250,000 between 2008 and 2013.39 
Employment by universal services providers decreased at an average rate of 4.4% in the 28 
Member States between 2012 and 2013.40 Universal service providers are generally unionised 
with  wages  and  working  conditions  covered  by  collective  sectorial  and/or  general  labour 
agreements. In many instances modernisation has been managed in a socially responsible way 
together with the trade union and early retirements and voluntary departures have been used 
to  minimise  the  number  of  compulsory  redundancies.  Despite  workforce  reductions,  a  large 
proportion of staff continues to be involved in delivery operations. There have, however, been 
significant  increases  in  the  proportion  of  part-time  employees  in  some  Member  States  and 
overall there is a trend towards more flexible forms of employment contracts.    

European  Commission,  Consumer  survey  identifying  the  main  cross-border  obstacles  to  the  DSM  and  where 
they matter most, 2015  

 http://ec.europa.eu/consumers/consumer_evidence/market_studies/obstacles_dsm/index_en.htm  
35 COM(2015)192 final 
36 COM (2013)886 final 
37 European Commission Postal Statistics Database, 2013, own calculations 
38 Oxford Economics The Economic Impact of Express Carriers in Europe, 2011. Employment data for operators 
other than the universal service providers is not included in the European Commission postal statistics,  
39 Universal Postal Union (UPU) estimates for EU27. Figures include UPU designated operators – i.e. universal 
service providers – only.  
40 Estimated value on the basis of the European Commission Postal Statistics Database 

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10. Close monitoring is needed as the market continues to evolve 

Overall the two core aims of European  postal policy, namely ensuring a minimum range of 
services  of  specified  quality  at  affordable  prices  for  all  users  and  market  opening  with  fair 
conditions  of  competition,  have  broadly  been  achieved,  though  concerns  persist  about  the 
cross-border  parcel  market.  Nonetheless,  the  postal  market  continues  to  evolve  rapidly  and 
ongoing close monitoring and further analysis of the overall postal market, and the effects of 
the regulatory framework, are needed. This is particularly important in view of the impact, on 
the provision of universal service obligation, of the decline in letter volumes and the growing 
number of parcels, and in order to be able to respond, if necessary, to changes in the technical, 
economic and social environment, and to the needs of users to ensure the sustainability of the 
sector. The Commission will publish statistics annually from 2016 to provide regular updates 
on developments in the letter and parcel markets in the European Union.   

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