OK to allow NZ Post to cut mail services?

Tuesday 29th January 2013 1 Comment

New Zealand Post wants to drop its guaranteed mail deliveries from six days a week to three to deal with failing mail volumes and the unprofitability of the postal service.

In addition, some of the 880 outlets New Zealand Post is required to keep open may in future just be kiosks.

A public consultation is under way on changes to New Zealand Post's universal service obligation before the government decides whether or not to approve them.

"This does not mean we are about to immediately reduce to three-day delivery for the standard letter service," NZ Post said.

"It is a guaranteed minimum frequency, which we could if necessary move to in years to come as and when volumes decline. We do not need to adjust delivery frequency now, but we are seeking the flexibility to be able to do so in the future when we have to."

The rationale for fewer deliveries is that there is less mail to deliver as people use email and other digital technologies to communicate.

"During the last 10 years mail volumes have dropped considerably, with 265 million fewer items being posted each year compared to 2002," Communications and Information Technology Minister Amy Adams said.

"Within five years, mail volumes are forecast to be nearly half what they were in 2002," Adams said.

Adams said any change to the obligation would require government approval.

"In deciding whether to accept or reject the proposal or seek to negotiate a compromise, I will look to balance the interests of postal users with the need to ensure a financially-viable postal service."

NZ Post's core postal service made a loss of $11.17 million in the last financial year.

In 2012, New Zealand Post, which is a state-owned enterprise, made a request to change the deed of understanding it signed with the Crown in 1998.

The current deed has a minimum six days per week delivery to 95 percent of addresses, five days per week delivery to 99.88 percent of addresses and one to four days per week delivery to other 0.12 percent of addresses.

NZ Post wants that changed to not less than three days per week delivery to 99.88 percent of addresses and one day per week delivery to other 0.12 percent of delivery points.

Existing addresses with two or three day delivery will not have frequency reduced.

There is no change to the obligation to provide competitors with access to the NZ Post network.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

On 29 January 2013 at 11:14 am Terry Jones said:

Where are the wonderful innovations announced by Michael Cullen? Where, for example are the drive by mail drop off boxes, where the car driver doesn't need to get of the car? NZ Post has only two solutions, reduce service and or put up prices, often applied at the same time. The entire board of NZ Post should be sacked.