Balancing universality, innovation, and competition in delivery markets: the case of out-of-home

Postal & Delivery

28 Aug

Balancing universality, innovation, and competition in delivery markets: the case of out-of-home

Postal services connect citizens, businesses and public institutions across the EU. The Postal Services Directive (PSD) guarantees every user a minimum level of postal service at an affordable price, wherever they live. The European Commission is now preparing a new EU Delivery Act to replace this Directive.

Two structural shifts are pulling the current model in opposite directions. Declining letter volumes are eroding the economies of scale that make daily home delivery affordable. At the same time, the rise of e-commerce and out-of-home delivery, such as parcel lockers and pick-up points, means fewer consumers rely on home delivery as an essential service. The key question is whether the current universal service obligation specification remains proportionate to its original objective, or whether it now goes beyond addressing genuine market failures in a postal sector that has undergone profound structural change since the Directive was adopted.

Against this backdrop, the Polish National Employers' Association of Private Postal Operators (OZPNOP) asked us to assess how the future postal universal service obligation could support effective competition in letter and parcel delivery while preserving efficiency and innovation, with a particular focus on out-of-home delivery.

The main conclusions of our study

The five-day home delivery obligation is financially unsustainable at current and projected letter volumes, and several Member States have already relaxed it in practice.
The EU Delivery Act should enable universal service obligations to align with current and future user needs and financially sustainable delivery models, while preserving a minimum common standard for affordability, territorial reach, and user access.
Out-of-home delivery can lower costs, match changing consumer preferences and reduce barriers to entry, but its benefits vary across services, user groups and Member States.
The EU Delivery Act should recognise out-of-home delivery as a valid universal service channel, adopt a technology-neutral approach to place of delivery, and keep targeted safeguards for users who need home delivery.
The evidence does not show a general market failure in the parcel locker market that would justify broad ex-ante access regulation. Multiple operators are investing and competing across Member States.
Access regulation should only apply where a specific market failure is clearly diagnosed, with a stronger case where infrastructure has received significant public support.

This study was commissioned by OZPNOP.

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