Post office network’s challenges

OVER the past few years, the challenges to the post office network have been increasing exponentially, not helped by the fact that people take the service for granted and tend only to make minimal use of its services. What many people do not realise is that An Post only directly runs 45 post offices nationwide; 20 times that many are run by independent postmasters who are contracted to An Post and whose payments are linked to the volume of transactions they conduct.

The switch to people paying more and more bills online has been ongoing for a number of years, however the Covid-19 pandemic this year has driven even more business online to the detriment of post offices whose footfall has declined dramatically. The move to paying social welfare payments such as the old age pension to fortnightly instead of weekly during the first lockdown halved the number of transactions and then people over 70 were not allowed, under the restrictions, to leave their homes for a protracted period in the spring and early summer and now again in late autumn going into winter.

With less over-the-counter transactions, those who operate post offices are suffering a drop in their incomes. The clarion call regarding the survival of the local post office has been ‘Use it or lose it’ and people should still bear this in mind and act accordingly wherever they can.

However, a lot of their regular customers – older people in particular – have been wary, due to the pandemic, of coming into towns and villages to carry out various transactions in the post office such as the payment of utility bills and television licences. Other services they provide, including passport renewals – not that people are travelling internationally much anyway – have gone online centrally, while more people are sending emails nowadays rather than letters through the post.

On the other hand, the parcel post side of the business has never been busier with volumes well up, ironically due to more people shopping online because of the pandemic. At the moment, people are furiously shopping online to avail of ‘Black Friday’ and ‘Cyber Monday’ promotions in the run-up to Christmas and this is affecting local businesses hamstrung by the prevailing Level 5 restrictions.

Where people are able to collect their social welfare and pension payments in their local post office, there are spin-off effects in that they will spend the money in their town or village, perhaps going for a coffee and doing some shopping afterwards. In the smaller villages, the person running the post office is often the only one some elderly people in more isolated areas would come across during a given week and are on hand to help with and advise them on various transactions they need to do.

An Post have come up with a number of noteworthy initiatives during the pandemic, such as post-persons checking in on elderly people, especially those living on their own, and organising help through local volunteer networks with shopping, including food, fuel and medicines.

The organisation has also put in place a Freepost service through which letters to residents of nursing homes – who are not allowed have the usual amount of visitors – are delivered free of charge to them. As well as being practical, these initiatives are very good PR for An Post.

But, the reality on the ground remains that their postmaster contractors are suffering financially due to reduced footfall and there are fears that, when a lot of contracts expire next summer, they may just lapse due to being unviable unless there is some financial intervention from the government. The general experience is that when such a service closes down, it is –  more often than not – not replaced and it is only afterwards that its true value is appreciated, too little too late.

Seeing the useful recommendations in entrepreneur Bobby Kerr’s government-commissioned report on the future of An Post a few years ago were largely ignored, the Irish Postmasters Union commissioned their own report by Grant Thornton, which was published in September and recommended a Public Service Obligation payment of €17m annually to the post office network, because it provides ‘a multi-fold economic and social return to communities, far in excess of the PSO requirement.’ Failure to act ‘within months,’ the report states, could lead to what it termed ‘unrestrained closures’ in 2021.

While acknowledging the postmasters’ difficulties, An Post – which is a semi-State body – responded to the report’s recommendations by saying that any subsidies for independent postmasters are an issue between the government and the postmasters. This is not helpful for the postmasters who will have to rattle a lot of political cages in order to try to find the means to survive.