The ITC, an independent, nonpartisan, factfinding federal agency, released the report to the public on April 6, 2004. The investigation was conducted at the request of the Committee on Ways and Means of the U.S. House of Representatives.

As requested by the Committee, the report examines the composition of the global industry, major market participants, and factors driving change, including regulatory reform, in major foreign markets; examines the extent to which competition among express delivery suppliers in foreign markets may be affected by government-sanctioned monopolies competing in those markets; and identifies additional impediments to trade encountered by U.S.-based express delivery service suppliers in foreign markets. For the purpose of the study, the Commission defines express delivery services as the expedited collection, transport and delivery of documents, printed matter, parcels and/or other goods, while tracking the location of, and maintaining control over, such items throughout the supply of the service; and services provided in connection therewith, such as customs facilitation and logistics services.

Highlights of the report follow:

• U.S.-based express delivery service carriers have been expanding their international operations to meet growing demand for international air cargo services, of which express delivery is a part, and to diversify their revenue base beyond the mature U.S. market.

• The international trade of express delivery services is affected by a broad range of issues, including laws and regulations in the areas of freight transportation, cargo-handling services, storage and warehousing services, freight agency services, telecommunication services, postal and courier services, and customs clearance. Impediments in any one of these areas holds the potential to hinder market entry, reduce geographic coverage, narrow the scope of service offerings, or otherwise adversely affect the competitive posture of U.S. firms in foreign markets.

• U.S.-based express delivery service firms increasingly compete with postal service monopolies in foreign markets. U.S.-based firms report that postal monopolies sometimes act to impede competition by cross-subsidizing competitive services with profits gained from their monopoly-protected operations. In some cases, these claims have been supported by competent regulatory and trade authorities.

• U.S.-based express delivery firms market their services as premium delivery services that are expedited in nature. As such, express delivery shipments are particularly sensitive to impediments in customs processing. In an econometric analysis, the Commission confirms results from existing literature that countries with poor customs environments import less than countries with more efficient customs environments. Further, the Commission finds that poor customs environments impede time-sensitive deliveries more than other shipments, and that improved customs environments may increase the likelihood that a particular good would be shipped by air to that market. These findings imply that U.S.-based express delivery service suppliers would benefit from improved customs procedures in many foreign countries.

• Evolving remedies to impediments include postal reform, the inclusion of express delivery-related provisions in trade agreements, and adherence to customs guidelines issued by the World Customs Organization.

Express Delivery Services: Competitive Conditions Facing U.S.-based Firms in Foreign Markets (Investigation No. 332-456, USITC Publication 3678, April 2004) is available in the Publications section of the ITC's Internet site at www.usitc.gov. A CD-ROM version or printed copy may be requested by calling 202-205-1809 or by writing to the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436. Requests may be faxed to 202- 205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.