Dutch Postal Rates Set After Legal Issues With Regulator - August 9, 2010
[Hellmail.]Dutch postal regulator OPTA (the Independent Post and Telecommunications Authority) remains at loggerheads with TNT over pricing levels for the universal service. The regulator said it had been seeking to establish actual costs of individual services within the universal postal service since June 2009 in order to properly evaluate any new pricing structure but has so far only received information from TNT on the total cost of the universal postal service.
According to the 2009 Postal Act, OPTA is required to set the starting price for the universal postal service, ensuring that the universal postal service remains available and accessible to consumers at uniform and affordable rates. OPTA then imposed penalties on TNT for not providing sufficienmr information, at which point TNT took the case to the Rotterdam District Court on July 1st this year. The judge ruled that OPTA lacked the power to penalise TNT and that TNT Post had fulfilled its obligations by providing total costs for the universal service.
Prices have now been announced, based on the total cost of providing the universal service but the regulator may yet appeal against the decision.
PSzÁF Fines Magyar Posta Insurance Arm for Customer Complaint Shortfall - August 6, 2010
[MTI – Econews.]Financial market watchdog PSzÁF said it fined insurer Uniqa Biztosító HUF 1 million for breaking rules on registering insurance policies and HUF 200,000 for failing to appropriately handle a customer complaint.
Uniqa director in charge of general insurance Pal Ertl acknowledged the company had been late in sending policies to clients during the period when Hungarian vehicle owners were allowed to switch mandatory vehicle insurance providers. In the other instance, Uniqa did not clearly respond to a client who had misunderstood an announcement by the company, he added.
Estonian Post E-invoicing Proves Popular - August 6, 2010
[Hellmail.]Estonian Post's E-invoicing service (digital invoicing) is proving popular with Estonia's public sector. This year a number of Estonian local government and administrative authorities of the Ministries have already signed up to the service.
Estonian Post E-invoice Centre solution delivers a more convenient web-based electronic invoice approval process with an automated e-mail message informing the verifier about the new invoice with approved invoices immediately visible in the central accounting system. Estonia, like many EU countries, is using the SAP financial platform.
Estonian Post ended the first half of 2010 with a net profit of 86.7 million kroons (5,5million EUR). Company revenues were 449.3 million kroons - operating expenses 360.8 million.
Compared to the same period in 2009, revenues for letter and parcel services have both dropped. The fall in mail volume mostly caused by greater reliance on digital channels. The drop in parcel service volumes is largely a result of the economic downturn, increasing competition and the consequent reduction in prices. Operating costs have also fallen compared to the same period in 2009 (by 14.3%) due to a fall in labour costs - 56.4 million kroons.
USPS Ends Third Quarter with $3.5 Billion Loss - August 5, 2010
[Press Release.]The U.S. Postal Service ended the third quarter of fiscal year 2010 (April 1 – June 30) with a net loss of $3.5 billion, compared with a net loss of $2.4 billion for the same quarter last year. Third-quarter mail volume totaled 40.9 billion pieces – down approximately 700 million pieces, or 1.7 percent, compared to a year ago.
Complete USPS third-quarter results include operating revenue of $16 billion, some $294 million less than the same period last year, and operating expenses of $19.5 billion, an increase of $789 million, or 4.2 percent, over the third quarter last year.
The increase in operating expenses was attributable largely to higher workers’ compensation expenses due to a non-cash fair value adjustment and higher retiree health benefits expenses. Lower interest rates adversely affected the workers’ compensation liability, resulting in a $2 billion expense for the quarter – $870 million higher than the same quarter last year.
A significant portion of USPS losses in the past few years has been due to an unprecedented decline in mail volume – down by more than 20 percent since 2007. The replacement of letter mail and business-transactions mail by electronic alternatives continues to cause downward pressure on mail volume.
The organization’s financial situation is compounded by its obligation to pay $5.4 billion to $5.8 billion annually to prefund retiree health benefits. This requirement, established in the Postal Accountability and Enhancement Act of 2006 (PAEA), is an obligation unique to the Postal Service.
Liquidity remains a major concern as the end of the fiscal year approaches. Although cash flow appears to be sufficient for 2010 operations, it is uncertain whether cash flow, together with maximum available borrowing of $3 billion, will be enough to fund the Congressionally-mandated $5.5 billion payment to the Retiree Health Benefit Fund on September 30 and retain sufficient liquidity into 2011, according to Joseph R. Corbett, the Postal Service’s Chief Financial Officer.
“Given current trends, we will not be able to pay all 2011 obligations,” said Corbett. “Despite ongoing aggressive cost reductions totaling over $10 billion in the last three years, it is clear that a liquidity problem is looming and must be addressed through fundamental changes requiring legislation and changes to contracts”
The Postal Service has incurred net losses in 14 of the last 16 fiscal quarters. The fiscal 2010 year-to-date net loss is $5.4 billion, compared to a loss in the same period last year of $4.7 billion.
Postmaster General John Potter noted that despite the cost-cutting, the Postal Service has continued to maintain a high level of customer service. The third-quarter service score for overnight single-piece First-Class Mail was 96.7 percent on-time, an improvement of 0.4 percent from the same period last year.
“Our dedication to customer service remains a top priority,” Potter said. “We continue to provide dependable customer service even as we focus on reducing costs. With the dedicated efforts of our entire organization, we are well on track to achieve approximately $3 billion in total cost reductions in 2010,” said Potter.
Cost reductions center on initiatives to improve efficiency and match work hours to reduced mail volume. Other savings are coming from consolidating excess capacity in mail processing and transportation networks, realigning carrier routes, delaying construction of new postal facilities and a variety of other initiatives.
Work hours were reduced by 63 million in the first three quarters of fiscal 2010, or 6.6 percent compared to the first three quarters of 2009. That is the equivalent of about 36,000 full-time employees.
“Securing the fiscal stability of the Postal Service will require continued efforts in all of these areas, as well as further review of retiree health benefit prefunding,” said Potter. “It also will require that the Postal Service gain flexibility within the law to move toward five-day delivery, to adjust our network as needed, to develop new products the market demands, and to work with our unions to meet the challenges ahead.”
New Zealand Post Announces Lower Profit Outlook - August 5, 2010
[Press Release.]New Zealand Post Group expects its net profit after tax (NPAT) for the year ended 30 June 2010 to be about break even due to difficult trading conditions and a series of significant one-off items.
Group Chief Executive Brian Roche said today the operating NPAT is expected to be approximately $72 million, some $5 million down on the normalised operating NPAT of $77.2 million last year, and lower than the $80.8 million NPAT projected for the 2010 year in the 2009 Statement of Corporate Intent.
After various one-off adjustments the reported NPAT for the 2009 financial year was $71.8 million. The reported NPAT for the 2010 financial year is expected to be about break even after taking into account four one-off costs arising at the Group level and in the postal services business in the second half of the financial year.
The final outcome will be known when the full-year audited accounts are completed. New Zealand Post expects to confirm its annual result on 20 August.
Mr Roche said that, given the non-recurring, largely non-cash nature of the one-off costs, the revised profit projection did not have a material effect on the Group's commercial value or its ability to service its debt obligations. The Group's cash position remained strong.
In keeping with Ministerial expectations for transparency by state owned enterprises, the Board had decided to provide an early public indication of its revised profit outlook.
From the 2011 financial year, NPAT is expected to return to the levels projected in the 2010 Statement of Corporate Intent. This envisages an NPAT of $60.8 million in 2011, rising to $84.3 million in 2012 and $117.5 million in 2013.
Mr Roche said that, as signalled in the half-year report, the operating profit for the 2010 financial year has been affected by reduced contributions from across the Group, due primarily to declining mail volumes and generally tight margins in a competitive business environment, especially in the banking sector.
"The impact on New Zealand Post’s letters business of economic conditions and digital substitution is well understood," he said. "We will continue to work with our Shareholders on a range of options to ensure a sustainable future for our mail processing and delivery networks.
Human Resource Innovation Savings Exceed $150 Million Annually - August 5, 2010
[Press Release.]Enhancing human resource functions to serve 588,000 career employees supporting a network of 34,000 Post Offices while developing future leaders is no easy task. The Postal Service continues to invest in its employees and cultivate tomorrow’s leaders by applying state-of-the-art technology to save more than $150 million annually.
“To help solidify the Postal Service’s future, it’s important now more than ever to invest in our most valued asset — our people,” said Anthony Vegliante, Postal Service Chief Human Resources Officer and executive vice president.
Vegliante’s vision of transforming the Postal Service’s HR functions mirrors the transformation the organization experienced when it developed the world’s most efficient mail system — it leverages technology to work smarter while minimizing labor intensive tasks.
The downturn in the economy and increased use of the Internet resulted in mail volume plummeting 20 percent since 2007. Annually through 2020, about 50 percent of Postal Service employees, nearly 300,000, will be eligible and are expected to retire. Today, nearly seven of 10 executives are eligible.
“Our goal of eliminating transactions and expanding 24/7 access to our human resource functions was achieved through Web-based business solutions,” he added.
The Postal Service was recognized in 2009 with an “Excellence in Practice” citation from the American Society for Training and Development, the world’s largest association dedicated to workplace learning. But it’s not resting on its laurels. Just as it used the Internet to automate day-to-day HR transactions, the Postal Service applied similar strategies to enhancing its training and development functions.
“We are leveraging world-class learning technology to provide employees with easy access to individualized training and scheduling flexibility,” said Susan LaChance, Employee Development and Diversity vice president, who oversees training. “This technology, and a learning approach that blends classroom, online, video and on-the-job training also places more information into our managers’ hands in real time for identifying developmental opportunities.”
Streamlining the business process and centralizing training product purchases saves up to $18 million annually. The Learning Management System, implemented just last year, manages all training administration and delivery processes within a single technology to save $10 million annually.
Developed just a few years ago, the Postal Service’s Human Capital Enterprise System (HCES) — the world’s largest and most comprehensive — automates numerous processes that occur during an employee’s career to save $130 million annually. Eliminating paper transactions while increasing efficiency, the HCES provides 24/7 access to all employee data ranging from applying for job vacancies to planning for retirement. This frees HR professionals from repetitive, manual processes to focus on strategies to place the right people in the right job at the right time.
An integral aspect of HCES is the Human Resources Shared Services Center (HRSSC), based in Greensboro, NC.
“This is the centerpiece for processing HR transactions,” said Deborah Giannoni-Jackson, Employee Resource Management vice president. “It leverages technology to process hiring, promotion and day-to-day HR transactions.”
Employees can access the center online through self-service or by voice-prompted phone. On a monthly basis, HRSSC handles 145,000 employee transactions. The center’s staff provides personal assistance on complex personnel issues requiring clarification, research or immediate attention.
China Post e-Commerce Joint Venture Announced - August 4, 2010
[China Briefing.]TOM Group, Hong Kong’s media and communications giant, announced plans for the formation of a massive joint venture with China’s postal service to create the mainland’s largest e-commerce services provider.
The JV, to be named Beijing Ule E-Commerce, will be 51 percent owned by China Post. TOM Group is investing through their Shenzhen-based NewECLink subsidiary and will be the exclusive IT systems provider for the business, providing an additional US$30 million to market the new platform.
“This will be a game-changer in the [domestic e-commerce] industry because it fulfills the nation’s call for secure and reliable online shopping,” TOM Group’s chief executive Ken Yeung Kwok-mung told the South China Morning Post. “Who can compete against China Post and all the resources at its disposal?”
China Post has 46,000 post office locations and a further 36,000 postal bank savings locations. The JV will also inherit 17 aircraft, 50,000 corporate clients, 56,000 postal vehicles and some 150,000 postmen. That infrastructure will be the key to getting products to customers. China Post account holders can already access the service via desktop, mobile phones, customer service hotlines, or over the counter. Operational partners of the JV also include Nike, Adidas, Samsung, Avon, Shisiedo, Giordano and LG.
“TOM has had a tough time of it in recent years, and has been patient with China in developing relationships and strategies. However, this massive deal comes at a very fair investment price and may turn out to be something of a bargain,” comments Chris Devonshire-Ellis, principal of Dezan Shira & Associates. “Joint Ventures have always had a place in the investment arsenal for China, especially for strategic deals, and quite frankly no one else is able to match China Post’s national reach. It’s an exciting development and I expect to see more high profile JVs between China’s SOEs and international businesses in the future. The game is now China nationally, and such investments pave the way.”
Indian Govt May Bank on Post Offices for Financial Inclusion - August 4, 2010
[Economic Times.]The neighbourhood post office may soon become a full-fledged bank as the government could facilitate a bank licence for India Post as part of a multi-pronged strategy to achieve greater financial inclusion.
The Reserve Bank of India is expected to soon come out with draft guidelines on licences to new banks.
“India Post is a strong contender for banking license given its spread across the country,” said a finance ministry official.
The postal department already works as a quasi bank, providing a host of savings products, postal life insurance, pension payments and money transfer services through its 1.55 lakh branches, more than any other bank.
It, however, does not provide credit, the most important bit of financial inclusion. A banking licence will help fill that gap enabling the delivery of modern banking facilities in areas lacking access to financial products, credit and savings.
The department is expected to soon seek the required clearances from the Postal Services Board to expedite the process.
Swiss Post Direct Entry Postal Deal - August 4, 2010
[Logistics Manager.]Swiss Post International UK has formed a partnership with Direct Entry Services which provides direct entry postal services for direct marketing agencies.
The Heathrow-based company works across industry sectors customising international mailings to the local markets they are being sent to.
Direct Entry Services will be a “Premium Partner”, enabling it to sell Swiss Post International products and services under the “Swiss Post” brand.
Earlier this year Swiss Post acquired Southampton-based direct mail services provider, MCM Direct.
Australia Post Announces $20 million Future Skills Investment - August 4, 2010
[Press Release.]Australia Post has announced it will invest $20 million in training staff in growth areas such as parcels, logistics, retail and digital services over the next three years.
"The Future Skills investment will equip our people with the skills they need to work in the new economy as letter volumes decline yet online shopping grows rapidly," said Australia Post's CEO and Managing Director, Ahmed Fahour.
"The world is changing and we must move with it but we must take our staff with us. While some areas such as letters will decline overtime other areas such as parcels will continue to grow."
The $20 million investment comes just four months after Mr Fahour announced a new business renewal program, Future Ready, which sees the organisation rely less heavily on its traditional letters business, and expand into new business growth areas such as retail, eServices and parcels areas.
"Developing the skills of our staff is a key part of Future Ready and it is of vital importance as the business changes to meet the challenges we all face as a result of letter volume declines," said Mr Fahour.
"While electronic communications such as email is the letter's worse enemy, it is our parcel business' best friend with online shopping growing rapidly."
Australia Post says that the $20 million Future Skills investment represents how the organisation can fulfil its commitment to retain and redeploy staff, and enhance employees' skill base in the face of a changing business environment.
"Our staff working in mail centres, delivering the mail, driving trucks and working in our outlets know better than anyone that we are seeing declining mail volumes and understand why we must cultivate new sources of revenue," said Mr Fahour.
Dutch Postal Rates Set After Legal Issues With Regulator - August 9, 2010
PSzÁF Fines Magyar Posta Insurance Arm for Customer Complaint Shortfall - August 6, 2010
Estonian Post E-invoicing Proves Popular - August 6, 2010
USPS Ends Third Quarter with $3.5 Billion Loss - August 5, 2010
New Zealand Post Announces Lower Profit Outlook - August 5, 2010
China Post e-Commerce Joint Venture Announced - August 4, 2010
Indian Govt May Bank on Post Offices for Financial Inclusion - August 4, 2010
Swiss Post Direct Entry Postal Deal - August 4, 2010
Australia Post Announces $20 million Future Skills Investment - August 4, 2010
