New Zealand Post announced today it will cut standard mail deliveries in urban areas to threetimes a week from July under its five-year transformation plan to refocus on its growing parcels
business, resulting in 400 job losses.Alternate delivery days will be tested in parts of Auckland to fine-tune the changes before theJuly rollout, the postal operator explained.
The major restructuring programme was initially announced in 2013 following a change in NewZealand Post’s Deed of Understanding with the government (its legal framework). “The previous Deedis 14 years old and is out-of-date. It constricted New Zealand Post to a business model that wouldhave had dire economic consequences and would have threatened the viability of the postal network.The new agreement preserves a postal network for New Zealanders and takes account of the differingneeds between rural and urban delivery,” New Zealand Post Group CEO Brian Roche confirmed inOctober 2013, when the agreement to change the Deed of Understanding was announced.
With the restructuring initiatives having a significant impact on the number of people workingacross NZ Post’s mail operations, New Zealand Post’s Mail and Communications Chief OperatingOfficer Ashley Smout admitted to Radio New Zealand that 400 postal staff are due to lose their jobswhen the daily mail delivery is abandoned in July. He said that 300 people would leave the companythis year and another 100 over the next few years, which would save the postal operator $25-30million per year.
Back in 2013, however, NZ Post admitted its intention to reduce its workforce of 10,600 peopleby over 20% by the end of 2016, with an estimated 1,500-2,000 people to lose their jobs, which is aconsiderably higher figure than 400 mentioned above. “The move to less ownership of stores willrequire fewer New Zealand Post people employed by us in our retail network; and reduced mailvolumes mean fewer people will be required to process and deliver mail. We still have lot of workto do and are not yet in a position to provide a breakdown of where the impacts will occur,” thecompany said at that time.
In its official statement today, however, NZ Post didn’t mention the job cuts at all.
Smout confirmed that standard mail will be delivered every second day to households in urbanareas starting with larger towns and cities in July, and rolling out to smaller centres over twoyears. Delivery to rural areas will remain unchanged. The updated plan was outlined to staff andmajor customers this week.
“We’re making these changes in response to people sending fewer letters. Our analysis shows theaverage household receives letters just three days a week,” Smout explained.
“The way we plan to roll out these changes means we will continue to meet our delivery targetsfor standard letters. We’re confident customers will see very little, if any, difference in theservices they receive from New Zealand Post as a result of these delivery changes. This is apriority for us,” he said.
“Our target of 95% of standard mail delivered within three working days remains, just as it isnow. Six-day-a-week deliveries will continue for priority mail and courier parcels, so peopleshould still check for mail every day,” Smout said. Priority mail including FastPost will continueto have a next day delivery target between major towns and cities.
New Zealand Post will also extend trials of new vehicles – customised mobility scooters – tomake it easier and more efficient for postal staff to deliver both mail and parcels throughout thecountry, which is also expected to cut costs.
The two and three-wheeled electric scooters were trialled in Wellington’s Hutt Valley last year.Today, NZ Post said it will hold more extensive trials in New Plymouth to test the vehicles as wellas greater integration of mail and parcel delivery.
The Postal Workers Union, which represents 1,500 postal staff in New Zealand, called thedelivery and job cuts ‘a money grab’ by the Government ‘that would further undermine the public’sfaith in postal services and accelerate their decline’.
The union’s president, John Maynard, told Radio New Zealand that while people have been leavingthe company, New Zealand Post has been hiring temporary workers.
“That makes sense when you see your business is running down but it’s actually in breach of thecollective employment agreement. And that will mean they are taking on people now who have a longwork history ahead of them, who are going to be the first ones that are cut off.”
“We do not agree that the company should be hiring people on a short-term contract like that, inbreach of the collective agreement, to lay them off,” he added.
Maynard admitted, however, that the postal workers are realistic about the decline in maildeliveries and realised that restructuring would be necessary.
Last year, domestic letter volumes shrank 7% to 642 million items in New Zealand and areestimated to drop below 500 million per year in the next three years as consumers switch tointernet, e-mail and social media for everything from paying bills to sending birthday greetingsand keeping in touch with family and friends.
In 2014, NZ Post’s profit reportedly fell by 12% and would have dropped further without thecontribution of earnings from its Kiwibank unit.
