Annual Report

Advanced technologies help to streamline and optimise mail flow.

The Universal Postal Union (UPU) is a specialised United Nations agency comprising 191 member countries. Delegates of member states meet at the Universal Postal Congress every four years to discuss and vote on major issues. Hongkong Post participates in the UPU meetings as a member of the People's Republic of China delegation and plays an active role in the UPU and in the Asia Pacific Postal Union (APPU). This has included participation in the Express Mail Service (EMS) Cooperative, Terminal Dues Work Group and Parcels Sub-Group, as well as the Asia Pacific Postal Cooperative.

Hongkong Post serves as one of the seven members of the EMS Cooperative Board of the UPU. The Board was established in 1999 and is open to non-state entities to improve Express Mail Service standards worldwide. We also co-chair a study sub-group of the UPU's Terminal Dues Project Group, which was established to help design a new terminal dues system, which is a mechanism whereby the destination postal administration charges the originating postal administration for processing and delivering inward international mail.

Hongkong Post is also one of seven Management Board members of the Asia Pacific Post Cooperative, established in 2000 to promote service improvements in the region. In November 2007, Hongkong Post was elected as the Chair of APP.

The postal administrations of many developed countries have been turning to corporatisation or privatisation. Their domestic postage therefore not only reflects the cost of delivery, but may also represent a substantive profit.

With profit-making in mind, the postal administrations of these countries proposed to link the Terminal Dues rate to the level of their domestic postage, which would result in a sharp increase in Hongkong Post's outbound payment. In view of the significant financial impact on Hongkong Post, we have solicited support from the China Post, the postal administrations of Asian Pacific countries and other low tariff industrialised countries, as well as certain unions, to adopt a more sensible Terminal Dues proposal for a lower increase rate, which was voted on and passed by the UPU Congress. However, we still have to face a substantial increase in Terminal Dues payment during the four-year period 2010-2013. In addition, the developed countries will continue to push for a further increase in their Terminal Dues. As Terminal Dues constitute a majority of the cost of outgoing international mail, such an increase will inevitably have to be borne by senders.

Mounting pressure for an increase in postal charges for international letter mail services is looming in the face of escalating costs.

The cost of fuel has seen rapid ups-and-downs, and without a stable fuel price the conveyance costs for international and local mail remain unpredictable. Moreover, there has been greater competition from the commercial sector for sufficient allotment in aircraft for our mail items, which is another factor which will bring about uncertainty in conveyance costs.