Biggest Threat To Postal Services Is Already Here
27 November 2009 - Sarah Sharpe
Steve Lawson, editor for Hellmail postal news, said this week that postal operators around the world should be braced for a new wave of electronic postal services that will slash millions from profits and see even greater decline of mail services than first thought.
"I think direct mail will survive as its a highly effective way to reach buyers, but increasingly government departments will see the attraction and cost savings of paperless mail, and in time that will roll out to domestic customers too, perhaps within the next ten years.
"For postal employees already concerned about the future of their employment, this isn't good news, but I think its important to look ahead in this business and see where the real competition is. Decline in stamped mail has been going on for some years now and whilst there has been competition in the market, much of it is about displacement. Finding new business for regular mail isn't easy. The real competition is from the digital world and we're still only scratching the surface in terms of the possibilities.
"Even in the UK, many key sorting contracts have already gone to rivals of Royal Mail, but the savings on paperless mail would be far greater. Lets be honest, setting up a secure mail box system wouldn't be that difficult between government and local authorities for instance, and as economies look for ways to cut costs and reduce borrowing, these kinds of alternatives are likely to become far more attractive. The Czech Republic has already switched to paperless mail between authorities, slashing around £1m from the government's budget. That kind of saving Even with registered mail you don't get confirmation that the item has actually been opened. Electronic mail boxes make sound economic and environmental sense too although I think we'd need to look carefully at the potential for spam."
In recent months, Lawson has been in regular communication with key providers of paperless mail services such as Zumbox, the US service which is already placed to roll out the system nationally, looking at how such sytems are implemented and the scope for savings and improved security.
"Paperless mail could be a positive step forward in terms of preserving the USO (Universal service obligation) as most operators are already struggling or running at a loss simply to maintain it. Regulation alone may not be enough to secure the future of the USO."
On employment in the postal industry he said:
"I think theres been far too much focus by postal unions on preserving postal services and jobs whilst ignoring the hard realities faced by postal operators right around the world. 'Granny Smith' is important from a social if not moral point of view, but she now makes up such a small proportion of the service provided, it simply isn't viable to maintain what is a rather old-fashioned communication system wholly for her benefit. The price of a stamp in most cases, doesn't cover the labour-intensive work involved in sorting and delivering it. I agree that we need to make sure we don't exclude people, but like the switch from analogue to digital, sooner or later you have to make that step. The danger therefore is that whilst the need to protect jobs is an honourable goal, in the face of so much new technology, much of which is cheaper, faster, and more secure, it can leave union leaders appearing beligerent too. There has to be acceptance that things are changing.
"Only a year ago Deutsche Post was saying that it felt the decline in mail was now levelling out. I don't agree with that. I think its far more likely that we'll see phased decline as a result of key changes in the way we all communicate. Post now rarely makes the breakfast table and for many people it is now a slow and awkward medium in terms of access. These days we can access email when we want and from practically anywhere. The move to a wholly electronic mail service is only a small step from that. It will happen, albeit overlapping with the gradual phasing out of traditional mail services, but that transition is already well underway." he said.
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