Posties predict job cuts in mail service revamp

NZ Post seeks changes to Crown charter to allow fewer delivery days as volume shrinks

Posties are predicting job cuts after New Zealand Post said it was considering halving the number of days mail is delivered because of the decline in the amount of mail it handles.

New Zealand Post says immediate changes are needed to cope with ‘‘irreversible’’ falls in postal revenue.

In a letter to State Owned Enterprises Minister Tony Ryall, NZ Post chairman Michael Cullen said the greatest threat to the company was the rapid drop in mail volumes caused by the public’s shift to email.

Dr Cullen was seeking urgent amendments to the Crown agreement, the Deed of Understanding, which said the company had to run a delivery service six days a week at a standard cost.

Communications and Information Technology Minister Amy Adams, who would have to approve any changes to delivery days, said she accepted New Zealand Post’s business had changed considerably over the years. Any proposed changes to the deed would have to go out for public consultation.

‘‘The Government will take that feedback into account before making any decisions on which amendments, if any, may be appropriate.’’

Former NZ Post chairman Jim Bolger made a similar approach to Government in 2010 but his proposals were not accepted.

In his letter, Dr Cullen outlined some options for changes, including cutting the number of days on which mail is delivered and combining courier and postal deliveries.

Because the amount of mail was likely to halve, the number of delivery days could be cut from six to three, he suggested.

Postal Workers Union southern district president John Maynard said postie numbers had already dropped because of low mail volume, and he was concerned the proposed changes would force further job losses.

He hoped the company would work harder to encourage the younger generation into snail mail. While the decline could not be stopped, he felt it could be slowed.

A New Zealand Post spokesman said a discussion paper would follow Dr Cullen’s letter, and any developments would take years.

The amount of mail dropped 6.4 per cent in the 2011/12 financial year, the biggest fall over a year.

NZ Post said that without changes it would make a loss of $20 million in postal revenue in the next 12 months.

The use of Fastpost has plummeted since the uptake of email, from 46 million items in 1998 to eight million in 2012.

Dr Cullen said the drop meant New Zealand Post could no longer survive by costcutting or introducing new products.

The NZ subsidiary Kiwibank was the strongest part of the company and it needed more capital from the Government to increase its lending and upgrade its systems.

Finance Minister Bill English would not confirm yesterday whether the Government would invest capital from partial asset sales in the bank.