Postal privatization: a closed chapter at last?
The state used to have a monopoly over postal services that even included postal savings and life insurance. But towards the end of the 20th century, lawmakers again deemed structural reforms necessary, although their neoliberal degree was subject to fierce debates. Inside the ruling Liberal Democratic Party (LDP) began a tug-of-war, eventually resulting in a snap election that secured the passing of the Postal Privatization Act.In 2007, the law came into effect, restructuring postal services into the asset-heavy Japan Post Group. It today consists of Japan Post Holding and its subsidiaries Japan Post, Japan Post Bank, and Japan Post Insurance. Wholly-owned Japan Post manages the nationwide network of post offices providing postal, bank, and insurance services. Optional registration, express services, and home shipping label printing diversify letter and parcel products. By law, Japan Post still has a monopoly over postal mail except for certain correspondence.
On October 27, 2021, the government reduced its stakes to around one-third in the holding, thereby completing its role in the privatization process. However, the breakup accompanying privatization remains incomplete as long as the holding has not sold off the two financial firms.
Liberalizations in the correspondence delivery business
Besides separating the financial services from the postal services, the legislator has enabled private companies to deliver correspondence in line with various licenses granted by the authorities. Hence, private companies may theoretically transport correspondence defined as documents addressed to a specific recipient expressing the intentions of the sender or notifying about facts, for example, postcards or letters. Despite this legal door opener, many requirements control market access. As of today, no company has qualified as a ‘general correspondence delivery business’. However, there are three types of ‘specified correspondence delivery businesses’ companies have obtained permits for so far: large or heavy deliveries, express deliveries within three hours, and high postage deliveries.Parcel delivery may be exempt from correspondence constraints given the containing correspondence is an unsealed attachment dealing with the package contents, such as a receipt of shipment. Therefore, in contrast, private door-to-door parcel delivery services like Yamato Transport or Sagawa Express have business licenses for freight motor vehicle transportation. How do parcel services compete with the massive postal network? Yamato Transport, for example, extends its reach through convenience stores and parcel lockers – but so does Japan Post.
