opinion

Postal service in complete disarray

22 June 2018 - 145   - 0

The Postal employees who are engaged in an indefinite strike, has led to the closing down of Post Offices and the Postal Service has been badly affected. The strikers allege the authorities are not concerned as they are planning to privatize the Postal Service. The Ministry Secretary denies it. The PMG says no negotiations until they come back to work.

However, the people of this country are concerned about the quality of the service they are given and the causes for the huge amount of their tax money is used to make good the losses incurred by the Postal department. The financial performance of the Postal department is in a very precarious situation.

FINANCIAL PERFORMANCE: 2012 – 2016 (Sources: Performance Report – 2016)

 

YEAR

2012

(Rs. Million)

2013

(Rs. Million)

2014

(Rs. Million)

2015

(Rs. Million)

2016

(Rs. Million)

Income

   4,952

5,907

6,557

6,711

6,578

Expenditure

8,258

8,766

9,541

11,756

12,284

(Deficit)

(-3305) 40%

      (-2859) 48%

(-2984) 31%

(-5045) 43%

(-5706) 46%

The reason for this situation is the decline in mail volume due to other modes of communication available to the people. With the development of technology new modes of communication are available to the people.                

 

DECLINE IN MAIL VOLUME –  LETTERS RECEIVED PER PERSON: 2007 – 2016

Year

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

No. of Letters

23

21

21

21

14

13

14

16

16

15

Sources: Performance Reports: 2012 – 2016 & 2012 Annexure 02 – Postal Statistics 2003 – 2012)

 

The number of letters received per person has declined from 23 to 15; by 35% in ten years. Yet, the cadre of about 22,000, subject to correction if I am wrong, in 2007 has been increased to 26,781 by 2016 (Performance Report – 2016). The department has increased the cadre by 30%. The 7000 Postmen, who were there in 2007, scattered in 2100 Mail delivery Post Offices and Sub Post Office country wide continue to deliver 35% less mail items in 2016.

 

In a surprising move the Postmaster General has proposed to increase the Postman cadre by 1507 citing service requirements (Progress report – 01 January to 31 July 2015, page 22). Further, the PMG has proposed to pay an incentive allowance to Postmen for collecting bills up to 20,000/= from the customers of various utility services and make payment at the PO/SPO by the Postmen to increase the Agency Services revenue by20% in 5 years. Also to extend the incentive payment to the whole staff in stages (Performance Report – 2015 page 23).The Postmen have been insured for this purpose and the PMG has paid Rs. 716,899.96 as insurance premium for 2014, (Performance Report – 2014 page 42). However, the Agency services revenue has decreased by Rs. 20,300,000/= in 2016. It’s a 3% decrease (Performance Report – 2016).

 

In the cadre of 26000, over two third is engaged in the Mail Business. It’s the core business of the Sri Lanka Post. In addition to 7000 Postmen another 10,000 are directly engaged in other Mail Operation duties, daily in the Central Mail Exchange (CME), in Travelling Post Offices (TPOs) and other 650 POs and 3400 SPOs all over the country. In their daily shifts at least one third of the time they idle due to lack of work.  Adjusting their duties to suit the present conditions is a difficult task. No action is taken by the management to do it due to fear of Trade Union retaliation. The unproductive, idling mail operational staff is a major cause for the losses.      

 

To face this challenge other Postal Services around the world have taken many measures to reduce cost and increase revenue. The Postcode is a one system enabling the reduction of operational cost of Mail Operations. It speeds up the whole process of mail operation, increases efficiency and reduces operational cost. According to Universal Postal Union records by 2015 over 75%, 143 of its 192 member countries were using the Postcode in mail Sorting. It shows its importance. The Postal department introduced a Postcode in 1997. However, the designers designed a Postcode in conflict with the existing Sorting and Routeing system and as a result it can’t be used in Mail Sorting. The Postal department may be in its fear of acknowledging its failure in public never introduced a properly designed Postcode thereafter for the last 21 years. The Postcode is being used as a “Place Identifier” to identify the POs and SPOs and not for mail sorting. The department continues Sorting a letter 5 to 7 times to reach the Post Town from the point of posting, instead of reducing the number of sorting to  2 to 3 times using a proper Postcode. This sorting system incurs heavy operational losses and cause delay to letters as it needs more time and effort    

 

POSTAL BUSINESS REVENUE:  – 2016 (IN BUSINESS LINES)

ITEMS

MAIL BUSINESS

OTHER POSTAL SERVICES

OTHER

(Not Specified)

FINANCIAL

SERVICES (MO)

AGENCY SERVICES

TOTAL

IN RUPEES

5,773,439,772

59,940,359

7,547,101

103,741,152

633,465,249

6,578,133,633

PERCENTAGE

87.77%

0.91%

0.11%

1.60%

9.61%

100%

Sources: Performance Report 2016 – Revenue Report (In accordance with UPU standard Postal Revenue analysis)

 

The path the Postal department followed to face this challenge, neglecting its core business that earned over 85% of its revenue and turned to Agency Services that earned less than 10% was disastrous.  The Postal department, as a practice never analysed revenue in Universal Postal Union (UPU) standard Business Lines. Therefore the analysis gives a blurred picture. It didn’t make any attempt to make the Mail services efficient and cost effective during the last twenty years. Reducing the operational cost of Mail operations and increasing revenue by introducing E-services can narrow the gap between Revenue and the operational cost.

 

There is multitude of electronic mail services which can be introduced, subject to introducing the Postcode and making the Mail service efficient.

Postal registered electronic mail;

  • E-cards, the ability to buy a postcard online, which is then delivered to recipients by physical means;
  • E-invoicing, a service supporting the delivery of electronic invoices;
  • Online direct mail of advertising and/or other promotional communications by Post via electronic means;
  • Hybrid mail, the sender posts original message in electronic form, which is then electronically processed and converted into a physical message for delivery to the addressee by the Postman;
  • Post's website, one-stop-shop services, designing, preparation, printing and sending to their direct mail customers;
  • Online facilitation to Post's website access to small mailers and sending of their direct mail campaigners  
  • Transactional mailings such as "transactional printing" offered to large enterprises, are some of them.    

 

Postal department completed a five year Post Office Network project in 2014 at a cost of nearly Rs.650 million. It inter-connected all 650 Post Offices and supplied computers, Printers, Scanners and other accessories to them. To get the best return of this investment The Postal department must introduce E-services. With continued use of the benefits of this project in Agency services, in 2016 Agency services revenue has decreased by Rs. 20,300,000/= (3%).    If the Postal department neglects its core business of Mail service, the Postal Service moving towards making more losses and faster would be unavoidable.  

 

RETIRED – DEPUTY POSTMASTER GENERAL

rajalpw@gmail.com

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