More on the death of mail

May 14th, 2012 at 10:00 am by David Farrar

This show the projected drop in mail volumes to 2018.

And the drop in fast post volumes.

This reinforces for me why ’s¬†contractual¬†obligations in the Deed of Understanding have to be removed or at least reduced. If not, then simply won’t be profitable – in fact it will need taxpayer injections of funds.

The projections are NZ First Post can remain profitable until 2015, but then it gets hairy unless changes are made, such as requiring six day a week delivery.

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25 Responses to “More on the death of mail”

  1. Richard (94 comments) says:

    “The projections are NZ First can remain profitable until 2015…” typos or Freudian slip ? :-)

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  2. metcalph (1,359 comments) says:

    The projections are NZ First can remain profitable until 2015,

    Assuming that Owen Glenn was a one-off, surely they can get more funds from Simunovich Fisheries or that racing family without having to seek taxpayer funds?

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  3. immigant (950 comments) says:

    This is clearly National’s fault. They are running NZ post into the ground. If Labour was in power they woudl find a way to make this antquated communications system profitable. Key just wants to make NZ Post shares drop in value so he can sell it of to his mates.

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  4. gazzmaniac (2,317 comments) says:

    Australia Post have the same problem – people don’t send as many letters.
    Their response is a lot different though. They have pushed their premium services (Express Post and Express Post Platinum) which deliver between selected major centres with guaranteed next day delivery. They are also one of the big beneficiaries of the rise in internet shopping, since they deliver most of the parcels. They make more money now than they did in 2000.

    NZ Post might want to look at the Australia Post model.

    [DPF: Parcels are a growth area for them. The challenge is a few large organisations produce most of the postal mail (IRD, power cos, telcos etc) and when they go e-mail then that will hit NZ Post big time]

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  5. slightlyrighty (2,496 comments) says:

    Immigant? Not sure if serious?

    Ask yourself, when was the last time you sent any letter or bill payment by snail mail?

    I have E-mail, Internet Banking, Facebook, so many ways of doing things that are far more efficient and timely than the snail mail system that is now being relegated to festive cards and parcels.

    I get bank statements via the net. All my IRD communications cand be done over the net. Any documents can be scanned and e-mailed. I only seem to get a letter every 3 days or so, so it wouldn’t suprise me if we start to get mail deliveries every 2nd day.

    Would any wise investor put money into dead technology?

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  6. krazykiwi (9,189 comments) says:

    metcalph – :D

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  7. YesWeDid (1,029 comments) says:

    Mail might be on a death spiral but what parcel post? You can’t email physical objects and trademe goes from strength to strength so any discussion about NZ Post should present the whole picture not just part of it.

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  8. Mark (1,360 comments) says:

    It seems unnecessary for six day delivery however I am not someone that relies on NZ Post for most of my correspondence. I guess that those who are may have a differing view as to its importance.

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  9. BeaB (2,056 comments) says:

    Last year I spent nearly $20,000 on postage. This year it will be less than $1000.

    And going to a Postshop is unpleasant, frustrating, inconsistent (the same parcels costing different amounts – the PO man said the ink might be heavier on the dearer one. No, he wasn’t joking) and very very slow. Too many people doing all sorts of other things that take up precious time for businesspeople.

    There are hardly any letter boxes nearby or else they are on No Parking areas. Why can’t the postie pick up stamped items from my letterbox?

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  10. Pete George (22,754 comments) says:

    And going to a Postshop is unpleasant, frustrating, inconsistent…/i>

    Yes, it can be. The cost of parcel post options can be very confusing, and to find out you have to queue up, ask someone, then go and get what you want, pack and address, then queue up again to post it.

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  11. adze (1,856 comments) says:

    I actually wondered if Nz Post should have either bought, or done an early deal with TradeMe…

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  12. beautox (430 comments) says:

    >> And going to a Postshop is unpleasant, frustrating,

    Yeah because it’s clogged up by people trying to do banking there. Get rid of Kiwi Bank and let the post office just do mail. They might be able to actually deliver things instead of making you go collect “oversized” items, which can be a tiny box.

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  13. slijmbal (1,210 comments) says:

    Post also own several courier companies with DHL. They are the largest courier group in the country from memory.

    Pretty tough margins though.

    Be interested to see where their revenues come from.

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  14. immigant (950 comments) says:

    @slightlyrighty

    I’m not serious. I thought the phrase – ” If Labour was in power they woudl find a way to make this antiquated communications system profitable.”
    Was a giveaway. I’m not one of your 60 yearold mates, that need the obvious explained to them.

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  15. tvb (4,196 comments) says:

    I get my utility bills online and I hope most other mail. It is very easy to store online bills in email folders saves that dreadful paper war.

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  16. tvb (4,196 comments) says:

    PS immigrant I am nearly 60 so drop the ageism mate

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  17. immigant (950 comments) says:

    Sorry tvb,

    Just cracks me up how the gereatrics talk about email like it is an amzing new discovery and has not been around for the last 20 years. Especialy funny when they exchange such pro tips like – “You can store your emails in folders in your Outlook.” Or “You can get all your bills emailed to you, it saves the paper trail.”

    To me it sounds like saying – “Modern cars are amazing, you no longer need to crank the engine for them to start, you just use this new gadget called the key.”

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  18. tvb (4,196 comments) says:

    I would wager most peoPle up to 70 use computers readily. But it seems your dismissive use of geriatrics means you have an issue with older nz era and like being a smart Alec regarding use of computers. Everyone I know over 60 is quite confident regarding computer use.

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  19. jonno1 (79 comments) says:

    @immigrant 11.48 – Key? What key? You still use a key? I haven’t used a car key for years, just a fobby thingy and a button that says “Start/Stop” (quite helpful for a geriatric like me, otherwise I wouldn’t know how to start it). And yes, I have used e-mail from its inception in the 80s, although it’s certainly a bit smarter now.

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  20. Bunswalla (2 comments) says:

    The problem NZ Post has is twofold: declining mail volumes but more delivery points (read letterboxes) as the poulation grows. Post is rolling out a new system where Posties do a lot more than just deliver the mail. They will also be delivering a lot of the parcels that CourierPost currently delivers – somebody worked out that both the Posties and the couriers were going to the same places, often at similar times. Posties will get e-bikes with a small electric motor to help them get up inclines, and will also be towing a small trailer.

    Many posties will also pick up mail to be posted from the street receiver boxes – these are excellent initiatives to make better use of time and motion, and keep the postal service operational and profitable. The down-side – a number of courier drivers have lost their business or their jobs.

    Six-day delivery is the next to go, albeit it requires a change to the charter. It’s pointless delivering on a Saturday anyway, 90% of the mail volumes are business-related and businesses don’t carer about Saturday delivery or want it. It offers no benefits at all.

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  21. Spoon (101 comments) says:

    They need to have some major changes or they’re going to die very soon. Their activities over the last few years go against everything I learned in Year 10 economics. As demand goes down they’re repeatedly increasing prices (40c->45c->50c->60c->70c), with 25c of that being in the last five years, nearly 60% in a time where inflation would account for 10-15%. The only thing this is doing is driving demand down even further.

    At the start of this year I made the decision to stop posting invoices and statements other than when clients specifically ask, or overdue ones where we’ve been unable to make phone/email contact. The net result is that I’ve sent perhaps five letters this year. My stack of (60c) prepaid envelopes is going to last me several years. And I save money on printing. Win win.

    As far as receiving mail, with the repeated PO Box price increases I now pay more to receive the mail than the senders pay to send it. It’s something like $170 to get a PO Box, and at perhaps 4 items per week that’s over 80 cents per item. The vast majority of what we receive is bank statements (~4 per month) and IRD junk. The only bills we still receive in the post are the Telecom cell bill and the accountant. There’s always a bit of (targeted) junk mail, and inevitably a cheque or two each month. The bank statements and bills I could probably get switched to electronic, just leaving IRD and a (shrinking) handful of other mail each month. The logical step is to then get the IRD stuff sent directly to the accountant and anything else can go to our street address. Net result would be ~$170 per year less for NZ Post, and more effort (it’s harder to deliver to my street address than a PO Box).

    The big catch for NZ Post is once they’ve lost a customer (or some part of a customer) it’ll be incredibly difficult to buy them back. If they announced next week they were dropping post back to 50c, I wouldn’t suddenly start posting invoices again – it saves heaps on postage, printing, and staff time packing envelopes. Odds are I’ll never switch back.

    It’s time these services were rationalized. It’s just too expensive now, and more and more people are thinking the same as me. And every price rise more people will reach tipping point. 3 day delivery would be fine. I can courier if it’s more urgent. This should halve their expense on post-people (in the medium term) which has to be a significant saving.

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  22. immigant (950 comments) says:

    @jonno1

    Really wow?!

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  23. john.bt (170 comments) says:

    I just blame Michael Bloody Cullen.

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  24. Viking2 (11,125 comments) says:

    Spoon (66) Says:
    May 14th, 2012 at 2:04 pm

    Lots of what you said are right but actually the reason for no mail is that email has replaced it. All major accounting packages allow eservice inwards and outwards. A folder on the desk top stores untold files. Apart from the odd bod that doesn’t have a computer paper mail is a waste of dead tree’s.
    I actually waiting for the day when the transaction that you make via your debit/credit/cash card sends an email immediately to your accounting package. Then I think the system will be tidy.No bits of paper to lose or remeber a month later what you purchased. Just code and file.
    Now that supermarkets et al have apps to buy your groceries etc its tine the banks encoded your email onto your card and facitlitated this. First up get’s my business.

    Still, think we are hard done by. The yanks are still in the dark ages of metal coins.
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10805423

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  25. thor42 (903 comments) says:

    NZ Post is doomed, no doubt about that.
    Why not flog it off to a courier company? That way, no more taxpayer cash would need to be pumped into it. I’d be fine with mail delivery 3 days a week too (as I suspect 99% of New Zealanders would be).

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