New Zealand Post will not rule out further cuts to mail
services and PostShops after yesterday outlining plans to
move to three-day-a-week letter deliveries and to replace
some Postshops with self-service kiosks.
The proposed shake-up of postal services would cost "in
excess of several hundred" posties, mail processing and
PostShop staff their jobs, chief executive Brian Roche said.
Letter volumes have been falling steeply in recent years -
almost 7 per cent last year alone - because of increasing use
of email and texting.
NZ Post said the "fundamental redesign" required to ensure
profitability of its letters business was constrained by its
"Deed of Understanding", the agreement with the Government
under which it must provide minimum levels of service.
Unless the changes went ahead, the letters business was
likely to become unprofitable by 2018.
Mr Roche said despite the move to thrice-weekly deliveries,
NZ Post would still be a six-day-a-week operation. "It's just
that at the very front line the postie would deliver to
household one on Monday and household two on Tuesday and then
NZ Post also wants the deed changed to allow some of the 880
PostShops it is obliged to operate to be replaced with
But Mr Roche said it would be "imprudent" to guarantee there
would not be further changes "because ultimately it depends
on how people use the mail service".
"What we're saying is this model is sustainable for a number
of years on current forecasts. If something happens outside
our forecasts, an event where there's a rapid decline of
mail, we would have to move quickly."
Mr Roche said the changes under consideration would allow NZ
Post's letters business to run at a profit "for a number of
years" by delivering savings of "several hundred million
dollars" over a five-to-10-year period.
Raising the price of stamps was not an option as it was
likely to increase the pace of decline in the business.
Proposals to replace some retail outlets with self-service
kiosks would not affect Kiwibank branches, some of which
shared premises with PostShops, Mr Roche said.
NZ Post employs 7000 to 8000 staff across its post and retail
businesses including about 2200 posties, but Mr Roche refused
to say exactly how many jobs would be lost until staff and
unions were consulted but said it was likely to be "in excess
of several hundred people".
NZ Post will also consult the public over the next six weeks
before the Government decides whether the changes should go
"It will be a big change, a significant change and that's why
we need to have a good conversation with the public", said
Communications Minister Amy Adams.
Labour's SOE spokesman, Clayton Cosgrove, said it was
"appropriate" that NZ Post look at its business model but it
had to justify any changes and also consider the impact on
businesses, on various groups including the elderly and on
those in rural areas where there was no broadband.
# A state owned enterprise formed in 1987 when the old Post
Office, a government department, was split into three parts,
NZ Post, Telecom and PostBank
# Under the Postal Service Act 1998 which allowed competition
in the letters market, a new "Deed of Understanding" required
NZ Post to meet a series of social, stamp price, and service
# Under that deed NZ Post must provide five or six day
delivery to 99.88 per cent of delivery points or postal
# It also has to maintain at least 880 postal outlets and
# While letter volumes have fallen sharply in recent years,
the number of delivery points has increased, squeezing
# The letters business is now barely breaking even and is
forecast to produce a $25 million loss by 2018 unless changes
- Adam Bennett of the NZ Herald