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What will become of the postal service?

Effective communications is the backbone of our modern civilization.

Until the arrival of electronic communications, the cornerstone of this communications was the postal service.

Go far enough back in time and you could see that for just a penny or less, your letter would be carried hundreds or even thousands of miles to its destination by the postal services of the world.

It wasn't fast, it wasn't necessarily reliable - but it worked and because of this, the postal system became one of the key factors in the development of the world as we now know it.

But where now for the postal service?

All over the planet, postal services are suffering the effects of the internet and the rise of email.

Just at the time when the cost of transporting physical items such as letters is rising rapidly due to fuel prices and environmental taxes, email has never been cheaper or more ubiquitous.

Who in their right mind is going to waste paper, ink or toner, an envelope and 50c of hard-earned money to send a message across town or the country - with a delay of a day or two when, virtually for free, the same message can be delivered within seconds by email?

This is the challenge currently facing postal services and it seems that many of them really don't have a clue how to mitigate the rise of email.

Both here in NZ and in the UK, the Post Office is hiking the price of mail and talking about scaling back deliveries.

Is increasing prices and reducing service levels really the way to make your product more attractive to the market? What business school did these people go to?

Just as the internet has dealt a death-blow to many other business models, so it is already doing to the humble "letter-rate mail item".

However, you don't have to be a rocket scientist to see that other aspects of the Post Office's business are growing at a huge rate.

Take the carriage of parcels and packages for instance...

Online shopping has become extremely popular, whether from online shops or auction sites. When people spend their money in cyberspace, more often than not it results in the need for something to be delivered -- and isn't that a role the Post Office used to perform?

Here are a few ideas for Post Offices across the world (and here in NZ):

First, how about focusing on fast, efficient, cost-effective package/parcel deliveries? Why carry an envelope for $0.50 when you can carry a package for $15? Surely, especially once delivery is taken into account, there's potential for good profit in a smaller number of larger transactions?

Secondly, how about delivering some "value add" services to that delivery? Perhaps an escrow service -- after all, your people will be "on the spot" when a consignment is delivered so they can get a signature on the escrow-payment authorisation and then release the money to the seller.

Think of how much money there is to be made even from just earning interest on the money that would be held in escrow prior to delivery!

And what about setting up a much better international payments or money-transfer service than those currently available from our banks and services such as Western Union. Both of those charge inordinate fees for delivering money to another party in another country -- surely the postal services of the world could hook-up together and process such things at a lower rate?

Then there are hybrid services that could be offered...

Need a report or poster printed on a colour laser or A3 printer? Why not just upload it to your local Post Office, specifying the required printer-type, number of copies, etc -- and then have it automatically printed and mailed to your home or office.

Need the same report or poster delivered to a London address? Have your post office liaise with the London GPO who will do the same thing but send it to the London address you specify. What a great birthday present or professional presentation that would make.

There are quite literally thousands of ideas that could be floated to take advantage of the existing Post Office infrastructure and its international links. What NZ Post (and the other postal services around the world) needs is a team who can come up the ideas, sort them into some kind of ranking (based on viability and profitability) then actually implement them.

The postal service isn't dead -- but if it doesn't adapt, it will be.

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