An Post profits - Customers must not be forgotten

On the day An Post returned a profit of €6.4 million, representing a huge turnaround of €45m, it would seem rather injudicious to engage in talk of further “head count reductions” to cut costs.

Yesterday’s annual report referred to such reductions and while these have not been formally mooted, An Post would ease costs through a further 1,000 job cuts.

Industrial relations are so rancorous at the company that unions would strongly resist any such move, and would point out the contribution their members have already made to the dramatic turnaround in An Post’s fortunes.

Staff numbers are already down by 500 over the last year and the blank refusal of An Post to pay increases due under Sustaining Progress, the national wage agreement, still rankles.

A stamp price increase of 25%, which, if granted by Comreg, would bring the cost to 60c next autumn, is bound to meet customer resistance.

They are all too well aware that the postal delivery service badly needs to be improved, which might account for the fact that mail volumes declined by 1.3% since 2003.

That, plus the fact that it will have a knock-on effect on costs faced by the commercial and industrial sectors - and ultimately the customer - is something which will be difficult to justify.

The annual report alludes to the fact that the company’s problems are compounded by a continuing decline in social welfare transactions through the post office network.

It would appear this aspect of the company’s difficulties has arisen because the Department of Social and Family Affairs has decided to pay money directly into recipients’ bank accounts by Electronic Funds Transfer (EFT).

Understandably, Seamus Brennan, the relevant minister, favours this method on grounds of security and convenience.

However, the Irish Postmasters’ Union (IPU) is agitated by such an arrangement because the future of 1,400 sub-post offices is threatened.

The department is its biggest customer, representing upwards of 60% of their business, and obviously its members’ interests will be adversely affected by any major drift towards EFT.

However, it is not altogether clear that this is the system that people want, to judge from the level of support the IPU has received from the public.

It has attracted the support of 500,000 people who signed postcards which were presented to Mr Brennan, calling for the payments to remain available at post offices.

He is not averse to that arrangement, once An Post organises its own EFT, but that raises the question of whether people such as old age pensioners would still have to pay charges on an account, as they must do in a bank.

That could be as much as €50, which some people on benefit might find somewhat of a burden.

The fact that the company did bring about a near-miraculous transformation in its balance sheet will probably encourage the National Treasury Management Agency to press its case for a 40% reduction in the fees which An Post charges its second largest customer.