Wednesday, August 10, 2011

SingPost - Our Profitable Postal Operator

Well, the recent financial turmoils around the world highlighted the difficult stages that many companies faced. So it was not surprising when I read about the financial difficulties of many postal companies. Postal companies are the important players in the development of the philately for the country. They are the parties who design and print stamps (including stamp errors which the collectors love), and operate / develop the postal system, which in turn created many interesting developments of philately worth (e.g. postal codes changes). Their "healthy" existence is necessary for the local philately scene. But 'healthy' is not a word to describe many of these companies.

In Canada, the ( info from - Canada's Unions "Mail Aggression": page 36 of The Economist 2nd July 2011 Edition." the Canadians post fewer letters than they once did (same for Singaporeans) and Canada Post has avoided obsolescence by encouraging the growth of "direct" (junk) mail, which now accounts for almost a quarter of its revenue. When the dispute in Canada began, their National Post newspaper ran the headline "Canada Post Strike: Will We Even Notice?" That is a sad headline for the postal operator.

Similarly for US, (info from Bloomberg Businessweek 30 May 2011 Edition), US Postal Service, i.e. USPS is losing money at the tune of -13.58%. The health of the postal operator would definitely cause worries for the 570+k employees of USPS.

So these examples drew my attention to our own Singapore operator, SingPost. Singapore's postal market has been liberalised for a couple of years now, i.e. Singapore has more than 1 postal operator. IDA (the postal regulator) listed 5 operators (incl SingPost) on its website, including DHL, Fuji Xerox and Swiss Post. An interesting point about the postal liberalisation is that it created more postmarks due to the entrance of new players. I've also received letters from other non-listed couriers. With competition, how's our SingPost doing?

Apparently very well! SingPost reported profit of S$34.8 millions for Q4 FY 2010 / 2011, and they have been giving out dividends for the shareholders. I believe that some of these growth come from direct mails, i.e. junk mails, that we received in our letterboxes. Earlier articles about the USPS and Canada Post revealed that direct mails are now important revenue growth for these companies, and I think it is likewise for SingPost.

This means in future I'll likely continue to receive more junk mails (or faced increasing cost for the stamps), and I wonder if one day junk mail will become a recognised element of the philately development for a country? Scary... nonetheless if that is necessary so that our local postal operator SingPost can survive in this new digital online world, I guess receiving junk mail is but a small price to pay. Don't you think so? :)

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