Let's not waste money on an outdated postal model

Friday, February 23, 2018

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Dear Editor,

According to the 2018/2019 Estimates of Expenditure tabled in the House of Representatives recently, the Government will spend $47 million to upgrade and strengthen Jamaica Post to an international system, affording it an increased ability to control and improve mail processing and handling. The project is being funded by the Universal Postal Union.

While a welcome move, even if years late, the Government cannot be satisfied with merely seeking to improve mail processing and handling — the core business of the postal service of yesteryear. What is required is a complete overhaul of the agency by diversifying and expanding its scope of services to bring it up to speed with modern postal operations.

The postal service worldwide, as a mail delivery service, is an outdated model that has proven largely unprofitable. As digital connectivity grows, people's communication styles have changed, resulting in a huge reduction in mail volume over the years. Additionally, technological advancement and adaptation have impacted business operations and services, which, in turn, has affected the postal service. Moreover, private courier services have become direct competitors to the traditional postal service in parcel delivery, oftentimes providing a more efficient and reliable service. The postal service therefore has to adopt new and clear strategies to diversify beyond core mail operations, which still remain important, into new growth markets, like offering greater business solutions and logistics services.

Some countries have privatised and diversified the service. The United Kingdom Royal Mail was privatised in 2015, following similar moves elsewhere in Europe, such as in Austria, Germany and Belgium. The private owners have greatly expanded the scope of services, thereby making for a more profitable enterprise.

Countries like Australia, New Zealand and Canada have remained public but have broadened the scope of services being offered and have recorded profits from their operations.

The United States Postal Service (USPS), an independent agency of the United States Government, has largely been a loss-making entity for several years now. Unlike some of the foregoing countries, whose postal service has remained public, the USPS has not evolved much or as aggressively over the years.

With a network of some 600 post offices and postal agencies, the Government should either consider privatising Jamaica Post or retaining it as a public agency or a quasi-public company with a much wider mandate beyond mail services.

Perhaps a feasibility study could be done to first determine the possibility of Jamaica Post becoming a one-stop shop with the amalgamation of various government services. Even then, perhaps closure of some of the locations would become necessary.

In an effort to bring the Government closer to the people, consideration could be given to providing various services, such as many now provided by the Registrar General's Department, the Companies Office, the Passport Immigration and Citizenship Agency, the National Land Agency, the Island Traffic Authority, the National Insurance Scheme, the Administrator General's Department, the National Housing Trust, some services of the municipal authorities, and even some services of Tax Administration Jamaica, among others.

With the provision of such services through the vast postal network several locations of existing agencies providing these services could be closed or provide mostly back-office operations, though some could still remain open to the public.

Jamaica Post could also provide agency services, such as currency exchange, bill payment, remittance, reintroduction of retail banking, and, like Australia Post, offer car and travel insurances, in addition to life insurance. Like Australia Post, and with Jamaica's plan to become a major logistics hub, it could provide larger parcel and logistics and business services, thereby creating a commercial arm that provides reliable and affordable services.

Fundamentally, a Jamaica Post providing both government services and a thriving commercial enterprise with effective management is likely what is desired and not merely an improvement in the legacy business model of mail processing and handling.

Kevin KO Sangster


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