Editorial | Will the postal service survive?

The Postal Corporation of Jamaica has failed in its mandate to transform the antiquated postal service into a modern-day business. That, in a nutshell, is what Auditor General Pamela Monroe Ellis found in her latest assessment of the corporation's efforts to modernise and commercialise the postal service.

The auditor general is, in fact, telling us something we already know: The post office service is in poor health and is becoming more obsolete by the day.

The antiquated postal system is owned and operated by the Government. As is commonly known, the incentive to maximise gains and minimise costs is absent from most government-run businesses. And in this case, the auditor general was sceptical about the economic value of some of the commercial contracts signed by the postal service.

The reality is that not only has the corporation failed at devising strategies to modernise the postal service, it cannot sustain itself and continues to be a drag on the national Budget, and is haemorrhaging millions of dollars each year.

In this digital age, the post office's core job of delivering mail has declined and is expected to continue a downward trend. Every mobile phone is a veritable postbox, enabling users to gain access to letters, utility bills and other forms of communication at the swipe of a finger, at any time of day or night.

We note that the postal service has done some improvement such as express service, the automated tracking and tracing system, as well as automation of the Registered Mail Unit. These are mainly services that focus on the delivery of mail. That is too narrow a focus in an environment where customers demand new services that are driven by digital printing and allied services. Customers demand speed, efficiency and convenience.

It's an imperative that postal systems exploit new services that will enable them to survive and ultimately grow. We can think of demands for e-commerce that are being satisfied by the private sector and wonder how much of this market is being exploited by the postal service, which has an extensive islandwide network.

The challenges facing postal systems are universal, but many are fighting for their survival. For example, some postal services are positioning themselves as one-stop shops for government services. In other cases, alliances have been made with private interests so that post offices are located within supermarkets and convenience stores, thereby extending opening hours to maximise e-commerce opportunities.

Urgent review

of business model

Not impressed by what she found at the Postal Corporation, the auditor general has called for an urgent review of its business model and has also signalled that strategies are needed to transform the postal service into a more efficient and diversified operation that can become profitable.

The Government's strategy for the future of the postal service needs to be articulated. Stakeholders will no doubt have an array of fixes, but the Government needs to indicate whether the plan is to defend its core business and seek alliances and enter into business arrangements with other players, or whether the service is to be downgraded and/or divested.

The Postal Service Reform Bill needs to come before Parliament to respond to the crisis that the service is facing.