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NEWS RELEASE 04-028; APRIL 6, 2004
April 6, 2004
News Release 04-028
Inv. No. 332-456
ITC ISSUES REPORT ON EXPRESS DELIVERY SERVICES
U.S.-based express delivery service providers encounter a range of trade impediments in foreign
markets. Postal reform, trade negotiations, and customs improvements may reduce the severity of
these impediments and likely improve the competitive posture of these firms in foreign markets,
according to the U.S. International Trade Commission (ITC) in its report Express Delivery
Services: Competitive Conditions Facing U.S.-based Firms in Foreign Markets.
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-
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.
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