NZ Post seeks changes to delivery; blames electronic media

Proposed changes include replacing postal outlets with self-service kiosks

The long-felt pressure of electronic communications on New Zealand Post’s physical network for letter and parcel delivery has brought a proposal from Post to rewrite its Deed of Understanding with the Crown.

To preserve the economic sustainability of the postal service, Post proposes to reduce delivery frequency to a minimum of three days a week for 99.8 percent of the population, as opposed to the five-or-six-day-a-week delivery for 99.8 percent promised under the 1998 deed. The company also wants more flexibility for the future in how services are provided.

As a further economy measure, Post proposes replacing some postal outlets with self-service kiosks.

In a discussion document supporting the changes, Post charts the decline in volumes of physical mail. The rate of decline for the most recent (2011-21012) financial year was 6.9 percent, it says. This represents 61 million items “and is the highest percentage decline ever”, Post adds.

It quotes a 2010 report by the Ministry of Economic Development - now part of the Ministry of Business, Innovation and Employment, which said: “much of this decline is attributed to the growth in digital communications (internet and text messaging).” Digital media are now used for a large proportion of business and social mail and physical letter delivery has accordingly declined.

Use of Fast Post has declined particularly sharply as urgent traffic is diverted to digital media. Electronic methods of household bill payment have also impacted its over-the-counter business as an agency for such transactions.

As a state-owned organisation, Post says, it is also bound by the pressure from government to improve public service efficiency. Pressure on government agencies overall to increase their use of electronic channels to serve the public will contribute to further decline in physical mail, Post says.

It sees four options – retain the status quo; make minor changes to the targets specified in the existing deed; negotiate a new arrangement; or abandon any arrangement with the Crown and operate its business according to market forces.

After discussing the options, Post expresses a preference for the third option.

In an attempt to stem the decline and get itself a slice of the digital market, NZ Post has developed its own digital bill-payment and document-storage service, YouPost.This is at “soft-launch” stage, says Post spokesman John Tulloch, being provided for a restricted set of customers. YouPost is not specifically mentioned in the discussion document.

Submissions are being solicited from the public in response to the discussion document, with a deadline of March 12.