Brazil sets principles for partnerships between Posts and third parties

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Brazil sets principles for partnerships between Posts and third parties

In the past few years Posts have started to open up their network of post offices to third parties – among which traditional banks, international money transfer operators, new mobile payments operators, or mobile service providers.

The jury is still out as to whether these strategies have really paid off . Many Posts, in particular in emerging and developing countries, have yet to develop a culture of business partnerships. In this respect Ordinance 210 of the Brazilian Ministry of Communications, published on April 13, 2012 may well become a “best practice”  other countries  will build on (in Portuguese).

The Ordinance not only encourages Correios to let third parties use its huge network of 7,000 branches. It also sets out the basic principles the Post will have to follow when negotiating partnerships:

–          Correios will need to make sure the new services from the third party are “compatible” with its own offerings, and can be “absorbed” by postal counters (e.g., in terms of additional workload, customer service, IT capacity),

–          The Post should receive an adequate compensation for the provision of these services, not only covering operating costs but also “ensuring a financial return so as to contribute to the expansion and improvement of the basic postal services provided by Correios”,

–          Agreements with third parties will cover in particular all service specifications, duration of the agreement, the financial model retained, and quality targets.

The Ordinance opens the door wide open for Correios to enter the mobile phone market, and to get closer to the objective set by its CEO W. Pinheiro :  “to grow from 0.4% to 1% the Brazilian Post’s share of the country’s GDP”.

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