Postal sector

Universal Postal Service

2020 prices: Arcep publishes its opinion on universal postal service prices for 2020

Arcep has issued its opinion on the price changes that will take place in 2020 for mail and parcel delivery offers that are part of the universal postal service.

The second year of application for Arcep’s multiannual price cap for the period running from 2019 to 2022

These price changes correspond to the second year of application for the multiannual price cap set by Arcep for 2019 to 2022, in its Decision [1] of 26 October 2017. The price caps set by this decision reflect the profound changes in the economic environment in which La Poste is operating, which has resulted in an structural decline in volume. Based on cost adaptations being planned by La Poste, these changes will enable the universal postal service to maintain its financial equilibrium, by having the financial burden shared between the company and consumers.

This decision caps the nominal average annual increase for universal postal services [2] at 5%, contrary to the previous scheme which permitted differentiated increases during the period. Under the terms of this price cap, it is up to La Poste to decide on how its prices will change.

The price increase planned by La Poste is in line with Arcep’s set price caps

The average 5% price increase planned by La Poste for 2020 complies with the price caps in place. It is adjusted according to service category (individual and small business mail, business mail, bulk mail, direct mail, registered mail, universal service parcels, universal service print media delivery and international mail). The different price changes in each service category mark a natural progression of those applied in previous years.

This change will have an only measured impact on households’ annual budget

At constant volume, this basket would increase by 7.6% in 2020, or by just over 3.50 euros – increasing from 42.50 euros to 46 euros a year per household, on average. Postal service use has been on a steady decline, however, due to changing user habits and increased prices. As a result, the combination of these two factors is likely to decrease average annual household spending on postal services in 2020 from 42.50 euros to 40.50 euros.

[1] Opinion No. 2017-1252

[2] The universal postal service includes obligations to provide a defined set of postal services: it represents three quarters of La Poste’s mail business and close to a third of its parcel business. The bulk of transportation and press distribution solutions are excluded, and are part of a dedicated public service mandate.