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Diversification could save postal services

FINANCIAL STANDARD
By | Oct 5th 2010 | 3 min read
By | October 5th 2010
FINANCIAL STANDARD

By Patrick Githinji and John Oyuke

What was a preserve of the famous a few years ago has no place in our society any more.

Receiving a letter could win one a heroic treatment in school and the village.

But the future of this postal services is under threat. The volume of letters being sent is falling as people and businesses switch to digital communication.

For many, e-mail has become the preferred way of communication, with billions of text messages sent every year, while fewer letters are posted per day than years ago.

In recognition of the scale of the changes and depth of the challenges in the postal market, the postal fraternity is stepping up efforts to secure the mail’s future.

Led by Director General Edouard Dayan, Universal Postal Union (UPU) is proposing new policies that would keep and equip the mail for modernisation.

New technologies

During the recently concluded 2010 Universal Postal Union Strategy Conference in Nairobi, the need for the industry to embrace new technologies to improve services and implement a strategy of diversifying the business came out loud and clear.

Delegates examined factors affecting the postal sector and identified the trends and issues that would define its future.

In the end, it was clear the sector is in the midst of a profound transformation and that innovation and service diversification must be key elements of a successful strategy for the future.

Dayan, however, cautioned that a key risk facing the sector is to become passive and not explore new avenues. He asserted that despite declining physical mail volumes, the sector must be optimistic as other business segments such as parcels and financial services experience significant growth.

Dayan said UPU continues to develop its global electronic financial network to help members move from paper-based money orders to quick and cost-efficient electronic money order services.

The development of e-commerce, he added, continues to fuel the growth of parcel volumes.

However, he noted, customs issues and better integration of the logistics chain must be overcome for cross-border e-commerce to develop.

In his address, Kunio Mikuriya, secretary general of the World Customs Organisation, emphasised the need for co-operation and partnerships between customs authorities and postal companies, saying they were key to improving the movement of goods across borders. The issue of how to facilitate the entry of Posts from developing countries into the digital age was raised several times in the forum, some citing the necessity for more investment in the postal infrastructure and stronger government commitment to the sector.

More advanced Posts assured developing countries they were ready to assist them by sharing technology and knowledge.

Effective regulation, concluded Dayan, would be highly important in the light of the changes affecting the sector.

Regional approach

He also said these changes would force the UPU to review the way it works, continuing to focus on a regional approach to help member countries and their designated postal operators.

In a keynote address, the head of the International Monetary Fund, Dominique Strauss-Kahn, called postal services are a "public good" that’s lacking in the global economy.

He said the G20 had recognised the Post as a public service that is an appropriate provider of financial services, especially for those often left aside by traditional banking institutions.

"Postal financial services help mobilise savings and that’s important for investing in developing countries. There is a need for inclusive financial services, including remittances," added Strauss-Kahn.

According to Pan African Postal Union Secretary General Rodah Masiviru, a modern postal office would have a dynamic concept of the universal postal service that corresponds with demands of today’s consumers.

 

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