Pricing in Postal Service Under Competitive Entry

The increased competition recently apparent in postal services takes several forms, which includes the development of new and superior services. Examples include over-night express and courier services, improved parcel and small package services, improved tracking, worksharing arrangements—primarily presorting—and downstream access to the postal network. In this paper, we confine ourselves to the discussion of the two latter forms of competition, namely, worksharing and downstream access. While our analysis is intended to be generic in application, we will draw heavily on United Kingdom and United States experience, as these are the postal authorities that we have studied most intensively.