The Rise of Global Delivery Services The Rise of Global Delivery Services A Case Study in International Regulatory Reform James I. Campbell Jr. JCampbell Press Washington, D.C. iv THE RISE OF GLOBAL DELIVERY SERVICES Published by JCampbell Press http://www.jcampbell.com © 2001 by James I. Campbell Jr. All rights reserved. First edition, 2001 Printed in the United States of America Publisher’s Cataloging-in-Publication (Provided by Quality Books, Inc.) Campbell, James I. The rise of global delivery services : a case study in international regulatory reform / James I. Campbell Jr. -- 1st ed. p. cm. Includes bibliographical references. LCCN: 2001118245 ISBN: 0-9711864-0-5 1. Postal service--International cooperation. 2. Postal service--Law and legislation. 3. Express service --Law and legislation. I. Title. HE6076.C36 2001 383'.4 QBI01-201146 To James Ira Campbell, F.A.I.A. Contents Acknowledgments .....................................ix 1. Global Delivery Services and Regulatory Reform . 1 P ART 1. U.S. P OSTAL M ONOPOLY 2. Overview: U.S. Postal Monopoly . 17 3. DHL Comment on Postal Monopoly Regulations (1979) . 32 4. DHL Testimony on International Couriers (1979) . 62 P ART 2. E XCESS B AGGAGE C HARGES 5. Overview: Excess Baggage Charges . 79 6. DHL Statement on CAB Sunset (1981) . 91 P ART 3. U.S. C USTOMS R ESTRICTIONS 7. Overview: U.S. Customs Restrictions . 119 8. DHL Comment in Courier Service Inquiry (1980) . 129 9. DHL Testimony on H.R. 5170 (1982) . 140 P ART 4. E UROPEAN P OSTAL M ONOPOLIES 10. Overview: European Postal Monopolies . 147 11. ICC Report to the European Commission (1983) . 159 12. ICC on French Postal Monopoly (1985) . 192 P ART 5. I NTERNATIONAL C USTOMS L AW 13. Overview: International Customs Law . 213 14. ICC Submission on Urgent Consignments (1986) . 223 P ART 6. I NTERNATIONAL R EMAIL 15. Overview: International Remail ......................... 257 16. IRC Comment on Proposed Anti-Remail Rule (1985) . 283 17. IECC Remail Case Complaint (1988) . 325 18. EEO Comment on REIMS (1996) . 356 P ART 7. E UROPEAN P OSTAL R EFORM 19. Overview: European Postal Reform . 373 20. EEO Submission for Postal Green Paper (1990) . 383 vii viii THE RISE OF GLOBAL DELIVERY SERVICES 21. EEO Comment on Postal Green Paper (1992) . 528 22. EEO Comment on Draft Postal Directive (1996) . 606 P ART 8. U.S. P OSTAL R EFORM 23. Overview: U.S. Postal Reform . 619 24. ACCA Testimony on Postal Reform (1995) . 635 25. Federal Express Testimony on H.R. 3717 (1996) . 648 26. FDX Testimony on H.R. 22 (1999) . 663 P ART 9. R EFORM OF THE U NIVERSAL P OSTAL U NION 27. Overview: Reform of the Universal Postal Union . 681 28. IECC Six-Point Plan for UPU Reform (1993) . 699 29. ACCA Petition to Department of State (1998) . 715 30. IECC Submission to the UPU High Level Group (2000) . 730 Bibliography . ....................................... 751 Acknowledgments With great pleasure I acknowledge that the policy reform efforts described in this book were in no sense solitary adventures. On the contrary, the policy campaigns summarized herein, and attendant historical documents, were collaborative undertakings from conception to execution. A brief account of principal debts follows, necessarily omitting the names of most individuals. The energy and vision which gave rise to global delivery services flowed primarily from a handful of remarkable and innovative entrepreneurs. Although few pioneers are still active in these more settled times, their contributions remain in the vitality of the industry they created. Among the entrepreneurs, three require special mention. Larry Hillblom, Gordon Barton, and Fred Smith—guiding spirits behind DHL, TNT, and Federal Express, respectively—not only built the foundations of the major global express companies of today but also contributed directly and personally to the concepts embodied in the policy presentations in this book. They were the big thinkers as well as the big dreamers for this sector. Most of the historical papers included in this book were originally presented on behalf of a company or group of companies. In each such case, industry officials supervised preparation and reviewed final copy. These papers are their product as well as mine. While it is impossible to list all of these individuals, I would like to acknowledge specifically the wise and patient advice of legal colleagues Tim Bye of TNT and Sarah Prosser and Nancy Sparks of Federal Express and customs experts Bob Battard and Ken Glenn of Federal Express. The warp and woof of these reform campaigns were produced for the most part by a team of skilled and dedicated legal, economic, and political advisers who labored for years to win acceptance of the industry, as counsel to DHL, the International Express Carriers Conference, European Express Organisation, and national express associations. No less than the entrepreneurs and industry officials, these advisers can look upon the global delivery service sector with justifiable pride of accomplishment. This group of long time consultants to the industry included, in France and Belgium, Dominique Borde, Jacques Derenne, Jean-Marie Duchemin, Bernard Le Grelle, and Eric Morgan de Rivery; in Ireland, Michael D’Arcy; in Italy, Livia Magrone and Samaritana Rattazzi; in Germany, Gerta Tzschaschel and Ralf Wojtek; in the United Kingdom, Ian Greer, Julie Harris, Richard Linsell, and John Roberts; and, in the early days in the United States, Herb Rosenthal and John Zorack. From ix x THE RISE OF GLOBAL DELIVERY SERVICES time to time, the ranks of these advisers were supplemented by other talented individuals as well. Collaboration with all was a privilege and abiding pleasure. My colleagues and I are fully sensible of the fact that policy advocacy is but one half of a conversation. Reform is wholly dependent on the receptivity of dedicated and diligent government officials and judges. In twenty-five years, we have been fortunate to meet many such public officials around the world. Without their fidelity to the public interest and attention to detail—I will never forget Raymond Dumey of the European Competition Directorate quizzing me on a footnote written years earlier—none of these reform ef forts would have been possible and our civilization would have been that much poorer. More generally, my understanding of the policy issues presented by the rise of delivery services has been materially advanced by the efforts of a small but diverse community of scholars, analysts, and advocates from around the world who have sought to advance public policy towards the delivery services sector. In this regard, I would like to record my particular appreciation for the efforts of organizers and participants in two sets of postal policy seminars: those of the Rutgers Center for Research in Regulated Industries, organized by Professors Michael Crew of Rutgers University and Paul Kleindorfer of the University of Pennsylvania and those of the Wissenschaftliches Institute für Kommunikationsdienste, organized by Ulrich Stumpf and his colleagues. Still more specifically, I am especially and personally indebted to two individuals who have for years generously shared both their knowledge of the industry and their passion for the truth: Bob Cohen of the U.S. Postal Rate Commission and Cathy Rogerson of the U.S. Postal Service and PricewaterhouseCoopers. Closer to home, I have been blessed with many fine assistants without whose tolerance and assistance, precious little would have been accomplished, most notably Joanne Brown, Sandy Chivers, Gua Van Schoorl, Sheila Turek, and Jennifer Philbert. And of all the wonderful reformers whom I have been fortunate to meet in these long policy campaigns, the greatest may have been an early discovery: my wife, Karen Geary, for she has reformed me. 1 Global Delivery Services and Regulatory Reform You fellows have discovered a business that is illegal in every country in the world. No wonder no one ever thought of that before! - Altamiro Boscoli, Brazilian lawyer (1983) Global delivery services are becoming a central feature of the global economy. - Fred Smith, Chairman, Federal Express (2000) his book tells the story, or much of the story, of how international couriers and express companies sought to orchestrate fundamental Treforms in economic regulatory policies during the last quarter of the twentieth century, thus opening the way for development of global delivery services integrating both private carriers and leading public post offices. In these efforts, legislative advocacy, litigation, public affairs, public relations, and scholastic appeal, were economically blended and carefully pitched since the melody of reform was at all times faint compared to the chorus supporting the status quo. In the audience, governments of major industrialized countries and intergovernmental organizations attended skeptically. At the beginning of the twenty-first century, the prospect of convenient, rapid, reliable, inexpensive global delivery services is apparent even if not yet completely realized. Global delivery services are emerging from still unfinished mergers and alliances between private express companies, parcel and freight companies, and leading national post offices. Necessary reforms in international legal structures continue. Using global delivery services, it will soon be possible to send all types of documents and parcels around the globe with the same ease, efficiency, and reliability that characterize a good national infrastructure featuring overlapping postal, express, and fast