Postal services now draw life from 'killer' Web

Feb 28 2013, 09:18 IST
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SummarySandra Vidulich is so excited about the leather boots she ordered through Amazon that she rips open the box in front of the postman and tries them on.

Sandra Vidulich is so excited about the leather boots she ordered through Amazon that she rips open the box in front of the postman and tries them on.

“I looove them,” she declares, as the driveway at her tree-lined home in rural New Zealand briefly becomes a catwalk. “They’re cool.’’

For now, a boom in internet shopping is helping keep alive moribund postal services across the developed world. But the core of their business — letters — is declining precipitously, and data from many countries indicate that parcels alone won’t be enough to save them. The once-proud postal services that helped build modern society are scaling back operations, risking further declines.

The United Kingdom is preparing to wash its hands of mail deliveries entirely by selling the Royal Mail, which traces its roots back nearly 500 years to the reign of King Henry VIII.

The US Postal Service sparked uproar this month when it announced plans to stop delivering letters on Saturdays. New Zealand is considering more drastic cuts: three days of deliveries per week instead of six.

It’s only in the past few years that postal services have truly felt the pinch of the internet. Revenues at the USPS, which delivers about 40% of the world’s mail, peaked in 2007 at $75 billion.

But the decline since then has been rapid. USPS revenue in 2012 fell to $65 billion, and its losses were $15.9 billion. It handled 160 billion pieces of mail that year, down from 212 billion in 2007. And it had slashed its workforce by 156,000, or 23%.

Elsewhere, the news is just as grim. La Poste in France estimates that by 2015, it will be delivering 30% fewer letters than it did in 2008. Japan last year delivered 13% fewer letters than it did four years earlier. In Denmark, the postal service said letter volumes dropped 12% in a single year.

The Universal Postal Union, which reports to the United Nations, estimates that letter volumes worldwide dropped by nearly 4% in 2011 and at an even faster clip in developed nations.

Developed countries closed 5% of their post offices in 2011 alone. And while internet shopping continues to grow, postal services that once profited from their monopoly on letters find themselves competing for parcels against private companies like FedEx.

The New Zealand government is accepting public comments until mid-March on the proposed changes to the New Zealand Post’s charter. A quarter of those received so far were mailed in, a rate considered unusually high. The other 75%? Email.

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