NZ Post could slash the number of days it delivers mail as it faces a make-or-break year on the back of falling mail volumes.
NZ Post chairman Michael Cullen has written to State Owned Enterprises Minister Tony Ryall, saying steps to make “fundamental changes to our operational models” must be taken in 2012.
“It is now clear to the board that the majority of short-term fixes have been exhausted.”
Mail volumes were falling by five per cent year on year, while the decline in the six months to the end of December 2011 was seven per cent, “which may well be the new norm”, Dr Cullen said.
They have tumbled from 46 million in 1998 to eight million in 2012, and are forecast to drop to five million in 2018.
“The trend will not reverse and cannot be ignored,” Dr Cullen says.
He says the Deed of Understanding between the government and NZ Post needs to be reviewed.
Signed in 1998, it requires NZ Post to deliver mail six days a week to 95 per cent of its 1.9 million delivery points, and operate at least 880 outlets. It also restricts the changes NZ Post can make to delivery schedules and its store network.
With people sending less mail and making more bill payments online, “it is becoming increasingly difficult to justify maintaining the current network reach which comes at considerable cost”, Dr Cullen said.