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U.S. Department of State

Diplomacy in Action

Postal Operations Council, March-April 2006

June 7, 2006


United States Delegation Report
UPU Postal Operations Council
March 20-April 7, 2006


This report summarizes the results of the UPU Postal Operations Council (POC) held in Bern , Switzerland , from March 20 to April 7.

Ambassador Dennise Mathieu, Director of the Office of Technical Specialized Agencies of the Department of State's Bureau of International Organization Affairs led the U.S. delegation, which included Dennis Delehanty of the Department of State and U.S. Postal Rate Commissioner Ruth Goldway. U.S. Postal Service delegates included Senior Vice President for Intelligent Mail Charles Bravo; Chief Postal Inspector L.R. Heath, Vice President for International Business and POC Chairman Jim Wade; and Michael Regan, Lea Emerson, William Alvis, and Harold Lane. A complete list of U.S. delegates is in Annex 2.

More than 80 meetings of POC Project Groups, Boards, Action Groups, Project Teams, Subgroups and Steering Committees met during this session, as well as several groups of the Council of Administration (CA). In all, 800 participants from 104 countries and nearly 50 organizations attended meetings during the session.

Terminal Dues and Economic Issues

Terminal Dues Project Group

The Terminal Dues Project Group reviewed reports of its three project teams (PT 1, PT 2 and PT 3), the main points of which are outlined below. A terminal dues workshop will be held during the October 2006 CA session to solicit views on preliminary elements and options for terminal dues proposals to be submitted to the 2007 POC.

PT 1, the Terminal Dues Model Project Team, noted the following key accomplishments of its work groups:

  • Canada , co-chair of the Studies Work Group (WG 11), presented the progress of its work on a cost-based system, including its consultation on the availability of cost data and the basic design of the cost questionnaire to be issued in late spring 2006. The IB gave presentations on the results of surveys on tariffs and mail volumes and provided preliminary results on the market and policy survey.
  • On behalf of the Methodologies Work Group (WG 12), the United States reported on initial recommendations on methodologies to convert domestic tariffs or costs into terminal dues developed by five WG 12 members. Several delegations commented that in further developing the initial recommendations, WG 12 should: 1) consider groupings of countries during a transitional period, 2) take into account several formats and/or weight steps rather than a sole reference to the 20-gram tariff, 3) differentiate between priority and non-priority services in order to provide an affordable option for less time-sensitive mailings, and 4) determine other indicators to refine the terminal dues system to account for country-specific costs. Consultation will be expanded to gather more views of member countries throughout the year and at the terminal dues workshop planned for October 2006.
  • Great Britain , co-chair of the Policy Questions Work Group (WG 13), presented an interim report on a transition plan to define how a postal administration will move from today's target/transition UPU terminal dues systems into the 2014 end state country-specific, cost-based system. The Project Group later endorsed WG 13's recommendations to deliver a flexible system, develop a comprehensive list of transition planning issues, organize regional workshops, and update the terminal dues financial impact tool.

The Statistics and Accounting Project Team (PT 2), which Malaysia and the U.S. co-chair, reviewed progress of eight regional terminal dues workshops, many of which held in conjunction with Quality of Service Fund (QSF) financial aspects training. The final regional workshop, for Spanish-speaking countries, will take place in Panama in June 2006.

The Quality of Service Link Project Team (PT 3) approved the 2005 results of the UNEX Industrialized Country quality of service link measurement system, except for an appeal by Royal Mail of Great Britain and issues raised by the U.S. Postal Service regarding outstanding anomalies on test items. Royal Mail expressed concerns about performance issues of the contractor during 2005, the volatility of the reported results and technical findings regarding non-compliance with the statistical system design, sample distribution and precision requirements. The Terminal Dues Project Group accepted the 2005 results pending a planned investigation of these issues.

PT 3 also presented draft resolutions on the target and transitional quality link systems. Regarding the transitional system, several developing countries raised concerns about being "forced" into a high-cost monitoring system without appropriate information as to which countries are involved and how they will be affected. The original proposal had called for the Terminal Dues Project Group to decide that the 10 transitional countries with the largest inward letter flows would have to participate in the so-called Level 1 (L 1) monitoring system (same as the current target system) if voluntary participation was deemed insufficient. This language was deleted from the resolution that was later adopted by the POC.

Quality of Service Fund Board of Trustees

The Board of Trustees continued its outreach effort begun early last year to communicate information about the Quality of Service Fund (QSF) and Board decisions to stakeholder UPU groups - particularly those that deal with quality of service, development cooperation and postal security - through a series of presentations on the status of QSF, work accomplished and challenges faced.

In addition to its ongoing responsibility to examine scores of individual QSF project proposals, the Board last year took on the task of drafting amendments to the Deed of Trust to bring it into line with Bucharest Congress decisions. The Deed of Trust is the legal instrument upon which the Fund is based. These amendments take into account the revised supplemental terminal dues payments to the Fund to be made by Industrialized Countries, Net Contributor Countries and Developing Countries under the Bucharest Acts which entered into force on January 1 of this year. As part of the process of revising the Deed of Trust, the Board also rewrote its two main operational guides, the Project Management Manual and Financial Management Manual. The simplified procedures in the revised Project Management Manual are expected to greatly ease the process of submitting QSF project proposals for beneficiary countries. The POC Plenary approved the amended Deed of Trust and the two revised Manuals on April 5.

Postal Economics

At a March 27 meeting of the Postal Economics Project Group, participants heard preliminary results of research carried out by the IB on the postal sector in developing countries. The IB seeks to find viable growth models for the postal sector in developing countries and measure the contribution of the postal sector to economic development. For low-income countries in the research sample, most variations in domestic volume between countries can be explained by the share of potential users (literate adults) in the population, the percentage of the population having to collect mail from the Post, and the potential users per post office. For middle-income countries, variations in domestic volume seem to be related to per capita GDP, the proportion of the population who are potential letter post users, the price of domestic letter-post service, and the potential users per post office. The research has also focused on postal delivery. The IB will collect delivery information through a questionnaire and interviews with 30 Sub-Saharan African countries and will conduct a similar study of the postal sector in Latin America .

Classification of countries for terminal dues purposes: CA Ad Hoc Group

During this POC session, the ad hoc CA group formed by the 2004 Bucharest Congress to review country classification issues met to consider papers on common criteria for gauging the level of postal development of individual countries. Possible indicators cited were per-capita mail volume, percentage of the population with home delivery or, conversely, those with no access to postal services. France presented a paper developed within the Terminal Dues Project Group that offered an extensive list of macro-economic and postal specific indicators and a methodology to aggregate the indicators into one composite. Ad Hoc Group members were asked to provide comments for a consolidated document to be considered at the Group's next meeting in October.

The Group also considered a paper by Ukraine on Value-Added Tax and similar taxes in relation to terminal dues. ( Ukraine had submitted a proposal to the Bucharest Congress that would clarify that such taxes are not to be applied to terminal dues payments). In reaction to an IB legal opinion on the subject, several countries expressed the view that taxation is the purview of national governments and therefore beyond the jurisdiction of the UPU. Ukraine will work with the IB to develop language that draws upon a similar provision adopted by the ITU in its 1988 Melbourne International Telecommunications Regulations.

WTO Issues

The WTO Issues Project Group (a Council of Administration group) took up the status of the Doha Round of Trade Negotiations and the results of the December 2005 Hong Kong WTO Ministerial Meetings as they relate to the postal/courier sector. Several countries - including the United States , Japan , New Zealand and members of the EU - had distributed a plurilateral request on Postal and Courier Services to generate further commitments from other members. These requests were discussed in Geneva from 27 March through 7 April in so called "cluster of services meetings." A second round of revised offers is due for submission by July 31 with final draft schedules of commitments due by October 31. To date, 70 of the 149 WTO members have submitted initial offers. The IB updated the Group on the recent meeting of UPU Director General Edouard Dayan with WTO Director General Pascal Lamy. Although the UPU remains interested in attaining permanent observer status within the WTO, the UPU is likely to be limited to participating in WTO meetings only when invited on an ad-hoc basis.

Quality of Service

The two main POC groups engaged in this field are the Quality of Service Project Group, led by Sweden , and a group that deals specifically with the operational aspects of terminal dues quality link monitoring and measurement methodologies. The work of the latter Group, which is chaired by Germany , is closely connected to that of PT 3 of the Terminal Dues Project Group.

The Quality of Service Project Group heard reports by the IB on performance monitoring, including the four core areas of quality testing, distribution of information, field/training work, and certification. The UPU's 2005 continuous testing program saw a slight increase in quality for the 291 links that were tested continuously from 2004 to 2005 with 62.6 percent of items achieving the J+5 in 2005 versus 62.2 in 2004. The Group discussed improvements to consultancy missions and the need to ensure that consultants are genuinely qualified to conduct auditing missions. Attendees agreed that the changes made in the UPU's certification process are positive, but that further work is required.

The Group also reviewed the proposed L 2 (or Level 2) quality measurement system concept and heard a presentation regarding the development of diagnostic technology for the postal sector. The Group generally agreed that existing and developing technologies should be studied for long-term application, but developing the L 2 system for terminal dues remuneration remains the priority. The IB will organize a one-day seminar with experts from various companies in October to investigate current and developing technologies for the postal sector. IB consultant Marion Szaller of Italy made a presentation on ongoing efforts to comply with Bucharest Resolution C 48 which instructs the POC to develop periodic comprehensive report cards indicating the performance of postal administrations and suppliers, such as airlines, in handling, transporting and delivering all categories of international mail. (Resolution C 48 was based on a U.S. proposal to the Bucharest Congress.)

At its meeting on March 30, the Terminal Dues Quality Link Group also gave considerable attention to the future of the L 2 system. Several members of the Group are to meet in Stockholm in late spring to resolve details of this system and discuss alternative methodologies that could improve upon or replace the UPU's current "continuous testing" program which measures end-to-end performance but not, for example, transit times in the country of destination. The Group is also working on possible attributions for a Validation Authority that would confirm the quality of service performance results of individual postal administrations.

Consultative Committee

The mainly private-sector Consultative Committee met on March 29 under the chairmanship of Charles Prescott of the Direct Marketing Association. Discussion at the meeting focused on preparations for the Dubai Strategy Conference; an assessment of CC goals, membership and working methods; and a review of the activities of CC working groups dealing with strategic planning, customs; trade issues; and standards and addressing.

From the discussion on the Dubai Conference several specific areas of interest for private sector stakeholders emerged. The Direct Marketing Association sees a need for the UPU to devote more attention to direct mail, which is the engine of growth of international mail volumes and revenues. The International Chamber of Commerce stressed the need to develop international change-of-address systems, while Union Network International emphasized the importance of investing in the human resources of the postal workforce. The European Information and Technology Industry Association proposed that the concept of universal postal service should be more clearly defined. This proposal led to the creation of a Consultative Committee subgroup on this subject to be chaired by Sue Presti of XLA (Express Delivery and Logistics Association).

The IB prepared a thoughtful paper on issues related to the goals, membership and working methods of the Consultative Committee. The Committee will give serious consideration to these issues in the coming months.

Customs Issues

On April 5, Germany provided important information to the Customs Support Project Group about impending changes to EU customs regulations. According to current regulations, electronic pre-notification of imports is required for letters, postcards, and printed matter or goods that are accompanied by a CN 22 or CN 23 customs declaration. However, the EU still intends to require submission of electronic customs data by posts on dutiable consignments as well as the calculation of duties on mail imports. On a related issue, the representative of the Express Delivery and Logistics Association (XLA) briefed the Group about FDA regulations and other developments in customs and security-related requirements for mail items sent to the United States .

Great Britain offered an update on the work in electronic customs data exchange as well as initiatives being explored with the World Customs Organization for capacity building. Great Britain discussed the progress made by the Standards Board and International Post Corporation groups to develop technical standards and solutions to facilitate electronic transmission of customs data. Canada raised security, handling of parcels and quality of service as issues that the Group would need to consider to move these efforts forward. Great Britain and Canada will work together on a proposed course of action.

The Customs Support Project Group also heard a progress report on the preparation of the revised UPU List of Prohibited Articles. The Group approved innovative icons and format features for this publication proposed by Great Britain ; plans call for the hard-copy version of the List to be published in late 2006 or early 2007. A possible second phase of this endeavor would be to develop an electronic list with search features and a reverse directory.

Strategic Planning

A March 28 meeting of the Strategic Planning Group, chaired by Russia , heard presentations and approved proposals put forward by the Group's four teams, which treat results-based management, scenarios, the 2008 UPU strategic plan and communications.

The Results-based Management Team, which the United States leads, gave a report on its analysis of best practices and methodologies applied by selected UN specialized agencies. Two agencies in particular, the International Maritime Organization and the World Health Organization, offer potential models for emulation or adaptation by the UPU. The report proposed key principles and basic measurements for report cards to gauge the progress of individual member countries in attaining the objectives in the Bucharest World Postal Strategy as well as overall principles for setting UPU strategic and budgetary priorities. The IB presented the UPU Program and Budget for 2005-2006, which contains 82 individual "projects" and suggested a plan for 2007-2008 to consolidate program activities into 50 projects.

The U.S.-led Scenarios Team presented a summary version of The Future of the Postal Sector in a Changing Global Environment - 2012 , highlighting business environment assessments and key drivers for change, the ever widening postal sector, alternative future scenarios for the postal sector based on the sector's rate of change for revenues, strategic options of postal operators, implications for the UPU and potential future roles for the UPU. The Scenarios Team is seeking member country comments and is working to incorporate wider regional perspectives and results of several questionnaires and studies on trends in the sector.

The Team led by Belgium responsible for drafting the Nairobi World Postal Strategy addressed progress, strengths and weaknesses of key principles of UPU strategic plans to date and noted the inputs required from the Scenarios Team, the Strategy Conference, the CA Structure and Constituency of the Union Project Group as well as the Nairobi Congress itself. Suggestions from participants included the importance of distinguishing between quantitative and qualitative goals in the Strategy.

The Communications Team, which Russia leads, is working with the IB to finalize the agenda and list of speakers for the November 2006 UPU Strategy Conference in Dubai .

Reform of the Union

Structure and Constituency of the Union

The Project Group on Structure and Constituency of the Union met on April 7 under the chairmanship of Egil Thorstensen of Norway . The meeting agenda focused on the results of a comprehensive questionnaire on reform of the UPU issued by the Group in November 2005. The survey questions concerned fundamental organizational issues such as the scope of the UPU; the Union's mission statement; responsibilities, structures and reporting relationships of the bodies of the Union ; and proposed priorities for the UPU's work.

Preliminary survey results led to the following conclusions, but the IB indicated a final analysis would not be available until a later date. For certain issues, such as the scope of the Union and mission statement, a clear majority of member countries prefer the status quo. Concerning possible structural changes to UPU bodies less consensus emerged. While Europeans press for major reform, opinions in the Western Hemisphere are split, and Africa and Asia favor current UPU structures. Member countries seem satisfied overall with the operation of Congress and the Council of Administration. Those countries, particularly in Europe , that advocate reform of UPU structures focus their attention on the Postal Operations Council, which they propose to transform into a Postal Operators' Council. Within the proposed Postal Operators' Council, the procedures for the exchange of international mail would be governed by contracts or "technical agreements" to replace the multilateral international treaty that is the UPU Convention. The main role of the UPU in relation to these contracts would be to develop, adopt and publish technical standards employed in the collection, transport and delivery of cross-border mail. The members of a Postal Operators' Council could include governments, regulators and designated operators. Some countries proposed that the UPU should consider introducing a weighted voting system within the POC.

Some interesting information and suggestions related to reform of the Consultative Committee came to light in the survey. Over the past year, the Consultative Committee has sought to expand its membership base beyond North America and Western Europe and attract private sector participants from the developing world. Certain countries mentioned that conditions for membership in the Committee should be automatic; if prospective members meet the membership requirements, they should be admitted without first obtaining prior approval of existing members (as the current statutes now require).

Members' replies about what should be the long term priorities of the UPU revealed a high level of consensus about the importance of quality of service measurement and improvement, postal security, standards, modernization of postal services and interconnection of postal networks through common UPU procedures (in the UPU Convention and Regulations). Opinions diverged on remuneration systems such as terminal dues, which industrialized countries find to be of much greater importance than developing countries, and market research, for which developing countries seek collective UPU efforts. Universal postal service and strengthening relations within the UN system are considered as low priorities by both developed and developing countries.

Participants stressed that the SCU should cooperate closely with the Strategic Planning Group, particularly concerning the setting of UPU priorities. The work already accomplished by the SCU in this field should be a great value to the team within the Strategic Planning Group led by Belgium that is responsible for drafting the Nairobi Postal Strategy.

Acts of the Union

On March 31, the Acts of the Union Project Group, which Bill Alvis of USPS chairs, adopted a draft definition of the term "reservation" conforming to UPU practice for inclusion in the UPU Constitution. The Group received a report that the Postal Payment Services Project Group plans to recast the Postal Payment Services Agreement and Regulations, but that this work would not be undertaken until 2007. The Group stressed that the development of proposals to replace the term "postal administration" must be completed before October 2006 and that the Postal Payment Services Project Group would need to submit its draft recast by July of this year for the Acts of the Union Project Group to meet this deadline. The Group also received a report that the draft replacement of the term "postal administration" in the Letter Post Regulations and Parcel Post Regulations was making good progress and would be available for review by the Group at its next meeting.

The Group reviewed the comments on the draft replacement of the term "postal administration" that had been circulated to all UPU member countries after the Group's last meeting. In general, the Group decided that "member country" should be used in the Constitution and General Regulations, except with respect to articles that deal with the distribution of documents and information. The Group did not have enough time to complete the review of all the comments on replacing "postal administration" in the Convention, but in general, most favored using "member country." The Group will complete its review process of comments on the Convention by email and will have draft proposals to review at its next meeting.

Postal Security

On March 29, the Chairman of the Postal Security Action Group, U.S. Chief Postal Inspector L. R. Heath, reported on the status and future focus of postal security work within the UPU. Security is an integral part of the UPU strategic plan for 2005-2008, and PSAG supports the security-specific Congress decisions, including combating terrorism, money laundering and terrorist financing, further implementation of the eMaria computer application by UPU member countries, and collaboration with the airline sector. PSAG heard reports from its four working groups.

West African Fraud: Successful coordination of law enforcement and postal security efforts between the United States, the United Kingdom, Nigeria and other countries have led to the seizure of over $125 million USD in counterfeit postal money orders and other financial instruments within the last year.

Global Mail Security: This group recently developed enhancements to the International Airport Mail Security Review Program and PSAG accreditation as well as a program to provide training for individuals conducting airport mail security reviews. The French language version of eMaria software application to exchange and track irregularities in international mail dispatches will be released in summer 2006.

Interagency Project on Dangerous Goods: The International Civil Aviation Organization (ICAO) has proposed changes to technical instructions which impact the level of training and safety requirements for the handling of dangerous goods transported via mail and cargo. The group plans to develop procedures for the acceptance of dangerous goods and training so that postal administrations are able to meet the minimum requirements set out in the proposed ICAO changes.

Information Security: This group is developing plans to address the exponential growth in criminal activity on the Internet threatening the viability of global e-commerce, which is producing new business opportunities for delivery operators.

The UPU Cooperatives

EMS (Express Mail Service) Cooperative

At the EMS Cooperative's annual General Assembly, the main topic of discussion was the EMS Business Plan for 2005 to 2008. This document segments the members of the Cooperative into three groups: the largest importers (Group 1); those with tracking capability (Group 2); and those with no tracking (Group 3). The three groups were given separate timelines to attain specific performance goals. These performance goals have been tracked for each administration in each group, and the present EMS Cooperative monthly, quarterly and annual report cards will be adjusted to ensure a consistent measurement and reporting regime.

Elections for four Board positions were held at the General Assembly. Brian Hutchins of the U.S. Postal Service and Carl-Gerold Mende of Great Britain retained their seats while Yoshiyasu Karikomi of Japan and Tong Juwang of China were elected as new Board members. Wendy Eitan of Israel chairs the Board.

The EMS Pay-for-performance Forum, chaired by the United States , also met during the POC session. This forum provides an opportunity to discuss the status of the introduction of the EMS Pay-for-performance Plan among EMS Cooperative members. The EMS business plan makes the plan a membership requirement for Group 1 and Group 2 operators, thus raising the interest of more members in Pay-for-performance. The Forum reviewed the 2006 version of the plan and the slight modifications made to the 2005 version to clarify areas, such as force majeure.

The Forum spent most of the session discussing the status of the members in attendance and other members with validated delivery standards which are required to enter the Pay-for-performance Plan. Four additional members have joined since October. At the meeting, Cyprus , Czech Republic , Finland , Malaysia and Portugal agreed to join in July. It was also reported that Angola , Bahamas , and Burundi would also soon join the Plan.

Telematics Cooperative

The Telematics Cooperative General Assembly reviewed its 2005 Annual Business Report and heard reports of its three User Groups. G�rard Jourdas of France was elected Finance Vice-Chair of the Management Board while Peter Dei Ofei of Ghana gained a seat as Legal Affairs Vice-Chair. The Assembly ratified the election of David Hamilton of USPS as Chair of the International Mail Services User Group and Vice-Chair of the Cooperative's Management Board.

The Annual Report noted the strengthening position of UPU applications in the world, including the current state of UPU technology implementation, with 118 Cooperative members, 220 applications installed, and over 5 million EDI messages exchanged. The report included information on user group activities, applications development (including training modules), UPU participation in the 2005 World Summit on the Information Society (WSIS) in Tunisia , introduction of a new Customer Relationship Management application, and the financial operating report.

Cooperative finances for 2005 were presented. Although the year began with a deficit of 558,000 Swiss Francs, the account closed the financial year with a surplus of 41,387 Swiss Francs. Member contributions were significantly lower than in 2004 due to the introduction of the new "L" class membership for least developed countries, with lower dues for these countries. Staff costs increased 11% to cover two associates previously covered by the IB budget. There are 29 members with membership dues arrears. Although 53,151 Swiss Francs were recovered in 2005, the arrears balance remains at 381,617 Swiss Francs, a situation requiring more attention and strict rules for sanctioning debtors. The reserve fund for UPU Telematics Activities increased to 2.2 million Swiss Francs. A surplus of 5,000 Swiss Francs is forecasted for 2006. The Management Board has decided to use reserve funds to finance half the costs of a project to upgrade the computing center security, the other half to be borne by the IB. The 2007 proposed Schedule of Charges keeps the prices for PTC applications constant except for the Quality Control System for Mail and Finance applications. They will be offered free of charge to all members of the Cooperative as they are essential to improve quality of service, one of the main reasons for the existence of the Telematics Cooperative.


The UPU*Clearing General Assembly re-elected Belgium, Denmark, Spain, Switzerland and the United Arab Emirates as members of the Steering Committee. The Committee will elect a Chairperson at its next meeting.

UPU*Clearing now has 30 member countries and handled approximately 62 million SDR in transactions in 2005. The U.S. Postal Service plans to become a fully participating member in early 2007. Discussions are underway within the Steering Committee to evaluate the use of the clearing system for financial services clearing and payments to air carriers. The UPU*Clearing budget for calendar year 2007 is approximately 253,000 Swiss Francs to cover salaries and administration costs for the processing of transactions. These costs are to be fully covered by annual contributions of UPU*Clearing members and interest income.

Standards Board

The Standards Board, chaired by USPS Intelligent Mail Vice President Charles Bravo, met on March 29. Highlights of the meeting include:

  • The Physical Encoding Group proposed to host a Postal Radio Frequency Identification (RFID) Workshop, focusing on postal applications for RFID technology. The Standards Board approved the concept; the date and location of the workshop are to be decided. 
  • A new "four-state" barcode specification for letters and flats was approved, allowing new trans-border products. 
  • A new Intellectual Property Rights policy was approved pending editorial corrections. 
  • An update to the draft standard for "electronic postmarks" was approved after much discussion, on the condition that the USPS rights to the trademarked expression "ELECTRONIC POSTMARK" are preserved pending a future decision by the business process owners. This allowed the EPM project to advance and development work to continue while discussions are underway to resolve this situation.

Parcels Group

Discussions at the meeting of the POC Parcels Group revolved around the work of its four subgroups whose accomplishments could be summarized as follows:

Rates: A proposal was adopted clarifying that the base inward land rate for parcels of 2.85 SDR per item and 0.28 SDR per kilogram shall remain in effect until 2010. All bonus payments and inflation adjustments will be made to this base rate. A proposal on an exchange rate/inflation rate mechanism that would eliminate the disparity between exchange and inflation rate adjustments was not adopted.

Services : The first performance reports measuring basic service performance are expected to be published in July. This initiative depends on the finalization of the format of the reports and on the selection of a report provider.

Delivery Network: This group reported that it had just issued the questionnaire that will be used to determine the minimum product definition of UPU parcels.

Customers: An Internet-based customer service system called "Cricket" has been successfully launched. Ten postal administrations are now using the system. Future development of the system will focus on transit issues and authorization codes for indemnity payments to reimburse customers for lost and damaged items.

Electronic Products and Services

On April 4 the Electronic Products and Services Group, chaired by Canada , met and discussed the Group's outcome statement and progress to date. The Group reported on the development of a strategy for postal electronic services to be proposed at the next UPU Congress in 2008. The Group also noted its contribution to the World Summit on the Information Society (WSIS), highlighting the role of the postal sector on the Internet, government's role in society, alliances with other government agencies and opportunities for Internet governance and access strategies. The Group's four project teams reported on their work as follows:

  • eStrategy : This team is preparing a work plan for broader stakeholder review this summer, incorporation of feedback into a preparatory document for the Dubai Strategy Conference, and translation of strategies into action plans for 2007 and beyond.
  • Hybrid Mail : The team noted volume is anticipated to be close to 5 billion items per year and stressed the need for interoperability of technical, general, procedural and regulatory approaches.
  • Digital Postmark: This team has worked on a trust model, a logo and draft amendments to the Letter Post Regulations. The logo is in its final draft stages and requires consensus of final design among members. The group has also worked on integration of the postmark as a plug-in for the next release of Microsoft Office v.12 set for early 2007. Italy has offered the source code for this plug-in free to all posts who are interested.
  • ".post" High Level Domain : This team reported on the agreement reached between UPU and ICANN to manage the domain via a private firm, SWITCH. Next steps include support for the IB in its negotiations with ICANN, work on standards, regulations and a project to move the IFS and IPS application as well as POST*Net to the ".post" platform.

Regarding regulations for consideration in Committee 1, the Group approved adding definitions of hybrid mail and the digital postmark to the UPU Letter Post Regulations. The Group then introduced the proposal in Committee 1, noted the USPS intellectual (patents and trademarks) property issues, noted the move to change all references of "Electronic Postmark" to "Digital postmark" and to accept the USPS invitation to hold high level meetings to reach a solution.

Committee 1 -- Standards and Procedures

Special mention should be made of the work of Committee 1, which took decisions on more than 80 proposals that had been referred by the 2005 POC to project groups or had been submitted by member countries after the 2005 meeting. Most of these proposals had originally been submitted to the 2004 Bucharest UPU Congress. In some of its more significant decisions, the Committee approved a reservation by the United States allowing it to treat all substances classified as controlled substances under United States law, for example anabolic steroids, in accordance with its domestic legislation.

The Committee also approved:

  • New regulations to implement international digital postmark service and hybrid mail service. 
  • Technical changes to terminal dues regulations. 
  • A proposal to require a bar code on all registered items, but sent back to the Liability Project Group a proposal to absolve administrations of liability for registered items that did not bear a bar code. 
  • Proposals by the Standards Board regarding more accurate references to standards in the Regulations. 
  • Parcels Group proposals concerning signatures by recipients, use of an Internet-based inquiries system, and parcel inward land rates for 2007 and subsequent years.

The Committee rejected:

  • Proposals from the Liability Project Group on obtaining legible identification with signatures and establishing a single two-month period for responding to inquiries starting on the date the inquiry form is completed by the administration submitting the inquiry.
  • Proposals to amend the Postal Payment Services Regulations.
  • Most proposals concerning the Postal Parcels Regulations, except those indicated above.


The POC Plenary sessions, chaired by James P. Wade of the United States , were held on April 5 and 6. At the beginning of the session, the Plenary held a special ceremony to commemorate the loss of two Nigerian delegates, Postmaster General Alhaji Argungu and Deputy Postmaster General Stephen Eneware who died in a plane crash returning home from the October 2005 CA session.

One of the highlights of the Plenary was a special strategy discussion during the morning of April 6. Kent Smith of USPS made a presentation regarding the future of the postal sector in a changing global environment. Smith provided qualitative descriptions of the forces driving change in the postal sector and offered a range of possible future scenarios for the posts. The presentation and ensuing discussion challenged members to consider how the mix of postal sector stakeholders could change from a postal operator-centric model and to reflect on what implications this held for the UPU and its members.

The plenary was apprised of two upcoming IB High-Level conferences scheduled for Bern on April 28 and June 30, as well as the status of the preparations for the Dubai Strategy Conference and preparations for the Nairobi Congress, including the unveiling of the official Nairobi Congress website.

The next POC is scheduled to take place from 23 April to 4 May 2007.

Also of Note ...

At a meeting on marketing issues, Swiss Post made a presentation on the topic of "Business growth strategies - A case analysis." To generate growth, Swiss Post suggests a combination of conventional methods - such as diversifying, growing direct marketing, and business process outsourcing - with less traditional approaches such as alliances, mergers and acquisitions. The most provocative suggestion in the presentation was the Receiver Pays Principle. Swiss Post suggests that home delivery and other services (the last mile) are independent services with specific prices. Research conducted by Swiss Post indicates that some customers would be willing to pay for higher delivery services and that some of the cost charged to the sender could be reassigned to the receiver. Redistributing the savings from the receiving side to the sending side would lead to increased demand and thus stimulate growth.

The IB reported that 12 countries have introduced cost accounting systems with the help of the UPU. At recent cost accounting training seminars, the IB has noted a general lack of market knowledge in developing countries and a need for information on price elasticity. The Publishing Mail Quality of Service Project Team reported that the first UPU external quality of service monitoring project involving postal administrations and their customers would run through May 31. Russia briefed delegates about their mobile postal units which, in addition to postal services, provide medical assistance, banking and Internet access to outlying areas of the country. The IB announced that it was preparing a letter of agreement between the World Bank Group and the UPU which will include references to cost accounting, Integrated Postal Reform and Development Plans, financial services, and postal economics.

At the meeting of the POC Committee 3 on operational issues, the IB reported on the status of work to carry forward Bucharest Resolution C 33 which calls for a top-to-bottom redrafting of the UPU Convention and Regulations to transform paper-based operational and accounting procedures to those based on electronic data. This is the so-called "Paper to Data Project." The 2005 POC had decided that this work should be initiated by a team of experts rather than a formal working group. Work at the IB began in 2006 upon the hiring of a postal operational specialist. Administrations interested in participating in this project should contact the IB.

Annex 1

Glossary of abbreviations and terms



Full name or explanation



Council of Administration


Series of forms in the UPU Convention for use in international postal operations, such as Form "CN 38 Delivery Bill. Airmail". The letters "CN" refer to "Convention".


Electronic Data Interchange


An application and network developed by the Postal Security Action Group to collect statistics on international mail irregularities, such as those involving losses, rifling, theft or damage.


Express Mail Service


Electronic Post Mark


European Union


U.S. Food and Drug Administration


International Bureau (the UPU secretariat in Bern , Switzerland )


Internet Corporation for Assigned Names and Numbers


An application developed by the Telematics Cooperative that is used to handle transactions related to postal financial services.


An application developed by the Telematics Cooperative used in international mail operations, particularly for tracking of dispatches and individual items and production of operational documentation.


Postal Operations Council


Postal Security Action Group


Project Team


Postal Technology Centre (the secretariat and operational office of the Telematics Cooperative in Bern , Switzerland )


Quality of Service Fund


Radio Frequency Identification


Special Drawing Rights


Work Group

Annex 2

U.S. Delegation to the March-April 2006 Postal Operations Council



G. Dennise Mathieu

Director, Office of Technical Specialized Agencies, Department of State

Dennis Delehanty
Ruth Goldway

Office of Technical Specialized Agencies, Department of State
Postal Rate Commissioner

James Wade

Vice President, International Business and Chairman of the POC

Michael Regan

Director, International Postal Affairs

William Alvis


Patricia Barnwell

Program Manager, International Postal Development

Clayton Bonnell

Program Manager, Intelligent Mail

Charles Bravo

Senior Vice President, Intelligent Mail and Address Quality

Peter Chandler

International Postal Affairs Specialist

Kathy Clendenin
Richard Domros

Postal Rate Commission
Postal Inspector

Lea Emerson

Program Manager, UPU Policies

Janice Gould

Program Manager, International Business

Jeanne Graupmann

Postal Inspector

David Hamilton

Business Systems Manager

Lee Heath
Brian Hutchins

Chief Postal Inspector, United States Postal Service
Program Manager, EMS

Ruth Jones

Program Manager, Intelligent Mail

Harold Lane

Inspector-in-Charge, International Affairs Group, Inspection Service

Bruce Marsh

International Postal Affairs Specialist

Flori McClung

Program Manager, POC Chairmanship

Charles Robinson

Assistant Director, Office of Rates, Analysis and Planning, Postal Rate Commission

Elizabeth Rogers

Assistant to the POC Chairman

Eliane Wittman

Program Manager, POC


June 7, 2006

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