Saturday 19 October 2019

An Post chief targets €30m extra revenue in China crackdown

McRedmond sets sights on second revenue boost after win on parcel costs

An Post Chief executive David McRedmond. Photo: Gareth Chaney Collins
An Post Chief executive David McRedmond. Photo: Gareth Chaney Collins

Fearghal O'Connor

An Post has joined forces with US and Nordic postal companies in a new bid to drive further global mail pricing reforms that could give the State company a second €30m boost over the next six years.

Chief executive David McRedmond is spearheading a new campaign - backed by Trump administration officials with responsibility for the troubled US Postal Service, as well as Nordic postal companies.

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They hope to further drive up the price paid by postal companies in China and elsewhere for sending letters and larger parcels to Ireland and other higher-cost economies.

An Post has a €20m per annum deficit in its delivery business for letters and parcels sent to Ireland from outside of Europe, with about half of that deficit accounted for by an explosion in deliveries from China.

The State company last week welcomed reforms in inter-country mail tariffs agreed at the Universal Postal Union Congress in Switzerland for small e-commerce parcels. It announced at the time that this would mean a €30m boost to its coffers over the next six years.

But at a subsequent meeting of global postal company CEOs later last week in Amsterdam, McRedmond launched a follow-up campaign to seek similar reforms on the price of delivering letters and larger parcels from abroad.

McRedmond told the Sunday Independent that, if successful, the reforms could also be worth up to another €30m to the company.

The cheap rates were originally agreed to encourage individuals and businesses in developing countries to send letters and parcels to more expensive, developed nations at an affordable price.

"This has meant that we are delivering this post for below cost here in Ireland and that would be fine, except that trade with China has exploded," said McRedmond. "The intention of those rates was to encourage developing countries to send mail around the world, but they never were meant to be used for a powerhouse economy like China."

China Mail has more than doubled its Irish volumes over the past two years, driving a parcel boom at An Post that in turn has helped bring about a recovery in the State company's finances.

"We're delighted to have the business, we're not against it, and our customers in Ireland are delighted to be able to order too," said McRedmond.

"We just have to make sure that it's priced properly."

Sunday Indo Business

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