Thu | Sep 20, 2018

Post offices going mobile- Government embarks on pilot as postal services become uneconomic

Published:Tuesday | March 3, 2015 | 12:00 AM
Members of the public utilising the services provided at the Liguanea Post Office, St Andrew.

Workers employed to post offices and postal agencies islandwide are being prepared from transition due to the changing landscape in which they operate.

Phillip Paulwell, the minister with responsible for the entity, said a major rationalisation is to be undertaken this year as it is now necessary to re-organise the postal services. He said over time, the restructuring will mean job cuts for workers in the postal services.

Next fiscal year, two mobile post offices are to be procured as part of an alternate modality that aims to make more efficient use of public resources. It will cost $32.6 million for the vehicles which Paulwell said will be part of a pilot to see how effective they can be in the rural areas.

"We will have to find a way to get the service to our people, especially our pensioners," Paulwell said, while adding that the postal system, as currently structured, is not financially viable.

"We are going to be incorporating these mobile facilities including these units along with the use of postmen on motor cycles," the minister added.

Based on the income and expenditure account of the Corporation, total operating expenses is expected to rise sharply to $149.5 million in 2015-2016, up from $90.5 million this fiscal year and $57 million two years ago. At the same time, net profit is programmed at $10 million, slightly worse than this year's forecast of $11.7 million, but way before the $34.2 million realised in 2013-2014.

The Corporation said it is seeking to expand its ZIP mail services to 39 locations. Money transfer services in the post offices are to begin before the end of the first quarter of 2015 at select locations as the services fight for relevance.

"We intend to compete with those businesses that are now involved in the fast mail delivery service and also internationally as well as the delivery of parcels. We intend to earn significantly so that the post offices can no longer continue to be a drain on the public purse," Paulwell said.

He said that the Government is working with a three-year plan which envisages that the post offices, instead of losing half a billion dollars, will be earning that amount by the end of the period.

The postal services has been allocated $2.2 million in the 2014-2015 budget, $688.5 million of which represents revenue that will be collected by the post offices from their operations.

"The service is no longer profitable in many of the areas because our people are now using modern, ICT to communicate, we just have to make sure that we provide for the pensioners who are the primary users nowadays," said Paulwell.

Despite the realities, Paulwell said shutting down the postal system is not an option.

"There are areas that are uneconomic where the private sector will never go because there is no profit for them going there. We have the responsibility of providing universal service. We have international agreements with all the countries of the world that if they deliver mail to Jamaica, we will get it to our people. No private sector company will take on that risk and undertaking," Paulwell said.