Royal Mail, USPS Will Let Contract Expire

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Mailers were pleased this week when Royal Mail and the U.S. Postal Service agreed July 2 to let a contract expire on Dec. 31 that allows the USPS to use Royal Mail's pan-European delivery network to deliver Global Express Mail and Air Parcel Post to 23 countries.

The postal service had announced the agreement in January 2002. Under the deal, the USPS sends all Global Express Mail and Global Air Parcel Post packages bound for Europe to Frankfurt, where Royal Mail takes delivery. General Logistic Systems, Royal Mail's pan-European parcel company, is responsible for delivering the packages throughout Europe.

The USPS said that, effective Jan. 1, it will revert to individual foreign postal administrations for delivery of Global Express Mail and Air Parcel Post in each country that GLS serves. GLS will continue to focus on its core product: business-to-business deliveries using commercial customs clearance.

Though the partnership lets the USPS use a single point of contact for Europe, the postal service began experiencing difficulties soon after the deal was signed. They included on-time delivery problems along with duties and fees that were higher than expected.

The USPS did not comment on why it will switch to the individual foreign postal administrations, though industry insiders thought the contract with Royal Mail/GLS was a mistake from the start.

"The contract agreement between the USPS and the Royal Mail never really got off the ground," said Charles Prescott, vice president of international business development and government affairs at the Direct Marketing Association. "Some believe that the USPS had good cause to and should have sought early termination of this contract."

Prescott said the problem appeared to be on the European end.

"Perhaps because Royal Mail contracted with others on the continent who quite simply could not and did not deliver," he said. "Mailers who initially used the service encountered numerous and repetitive problems and left the system for alternative services."

Royal Mail -- through its United Kingdom parcel arm, Parcelforce -- will remain the postal service's delivery provider for the UK.


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