More changes loom for NZ Post

JAMES WEIR
Last updated 05:00 28/08/2013

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Letter volumes are slumping fast as more businesses turn to email and NZ Post wants to cut many more jobs and eventually drop deliveries to just three days a week to stop the rot.

Customers are also likely to see many more self-service kiosks to post letters and parcels and pay bills in NZ Post outlets, as they are rolled out around the country in coming months. That would also mean fewer staff in NZ Post branches in the next year, NZ Post said, though it gave no numbers on any potential job losses.

New Zealand Post yesterday reported after-tax profit slumped nearly 30 per cent for the year ended June to $121 million, as the business continued to suffer a decline in people sending letters and parcels by mail.

NZ Post wrote down the value of its postal assets by $30.6 million in the financial year, including mail processing facilities that are being decommissioned. Restructuring costs from job cuts took another $23m bite out of the business.

In June NZ Post announced 500 job cuts, but the creation of another 320 positions in other centres, leaving a net loss of about 180 people, with Wellington badly hit.

NZ Post core postal business suffered a $30 million drop in revenues in the June year, as more businesses like banks and power companies moved to email to their customers, the company revealed yesterday.

NZ Post said there were 63 million fewer items delivered through the network than the year before. Volumes were down 7.5 per cent, compared with a 6.7 per cent fall last year.

The postal business faced "significant challenges" and while NZ Post had already announced plans to lay off hundreds of staff from mail centres earlier this year, there was "more to be done" according to NZ Post chief executive Brian Roche. Just what depended on the Government's pending decision on NZ Post's "deed of understanding".

NZ Post would like to see mail deliveries slashed from six days a week to three days, which would have a big impact on jobs.The business had to make a profit and NZ Post was not looking for a government subsidy for the postal business.

"We will eventually get to three days a week but the timing of that is very unclear. It is determined very much on how the market wants to use mail," Roche said.

At three delivery days a week, NZ Post could hold the postal network for a "number of years", but it was hard to predict, he said.

"Both the store network and the delivery network are going to have to be modernised and revolutionised if we are going to maintain a sustainable business," Roche said yesterday.

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There are at present between 4500 and 5000 people working in the postal business, out of a total of more than 10,000 in the wider NZ Post group, which also includes Kiwibank and a courier business.

EPMU union postal industry organiser Joe Gallagher said NZ Post had returned a "fairly good profit" of $121 million, so there was no need to make further drastic cuts to staff by going to three-day-a-week deliveries and bringing in more self-service kiosks.

"NZ Post is a vital public service that millions of Kiwis rely on," Gallagher said.

- Fairfax Media

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