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Public Funding and Industrial Synergies: How They Impact on the Calculation of the Net Cost of the USO?

In: Postal Strategies

Author

Listed:
  • Emanuele Frezza

    (United Parcel Service (UPS) Europe)

Abstract

The postal services market is rapidly changing due to the letter mail decline and parcel delivery growth. Universal service providers (USPs) need to sustain their universal service obligation (USO) while trying to become efficient parcel delivery operators. In this scenario, USPs can receive government funding to compensate for the net cost of their USO but are also becoming the recipients of funding related to the EU recovery plan and the EU Green Deal. In order to address the declining cost efficiencies related to letter mail and to cope with growing parcel volume, USPs are also often integrating their letter mail and parcel services offer through the integration of the technology and infrastructure used to provide them. However, the interplay between these two trends could make the correct estimation of the USO net cost more difficult to national regulators (NRAs) attempting to check the correct allocation of costs between universal and non-universal services. This might imply a risk of USO overcompensation.

Suggested Citation

  • Emanuele Frezza, 2023. "Public Funding and Industrial Synergies: How They Impact on the Calculation of the Net Cost of the USO?," Topics in Regulatory Economics and Policy, in: Pier Luigi Parcu & Timothy J. Brennan & Victor Glass (ed.), Postal Strategies, pages 141-154, Springer.
  • Handle: RePEc:spr:topchp:978-3-031-25362-1_11
    DOI: 10.1007/978-3-031-25362-1_11
    as

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