An Post's daily delivery at risk due to high cost
AN POST'S mandate to deliver to every household in the country is costing it a fortune and may not be sustainable, bosses have claimed.
Revealing its latest set of annual accounts, the post office network said its 'Universal Service Obligation' – which legally entitles every home and business to weekday post delivery – had once again caused a substantial loss in 2013.
It said it would continue with the service in the coming years – but that ultimately it may not be sustainable. Revenues from 'traditional mail' are continuing to fall even as the cost of providing the service stays the same.
"The amount of effort and cost required to deliver multiple letters to a particular address is virtually the same as delivering one letter," said An Post boss Donal Connell.
Revenue from traditional mail, like letters, was down 2pc on the year before – and has now fallen 30pc since peak levels in 2007. "The single largest challenge has been the continued decline in traditional mail," said Mr Connell.
But its 2013 results were still "better than budgeted", the company's accounts said. The group made an operating profit of €5.7m for the year, in comparison to a loss of €17.5m the year before.
This was aided by a massive surge in online shopping. Parcel volumes grew 22pc as Irish consumers increasingly eschewed the high street and purchased at home via laptops and tablets.
The first increase in stamp prices since 2007, introduced midway through last year, also provided a boost – delivering extra revenues of about €20m.
Prize bonds also performed well for the company during the year, one of the few retail activities to grow. Revenue from every other retail service An Post offers, like BillPay and social welfare transactions, fell.
Chief executive Donal Connell confirmed speculation that An Post will move to offer more traditional banking services, like current accounts.
"It is our view that An Post can facilitate the effective introduction of a basic bank account," he said.