SINGAPORE: Singapore Post Limited (SingPost) has today stated its intention to raise the standard regular mail rate by 20 cents, making it 51 cents from the previous 31 cents, effective 9 October 2023. According to SingPost, this is the most significant rate hike since 2014.
SingPost claims the rise in rates is due to the growing costs of maintaining the postal service, a sentiment shared by many postal firms globally. The company cites the challenges of digital disruption leading to decreased postal volumes.
In what appears to be a move to streamline its services, SingPost has shared plans to simplify the domestic postage rate structure by the end of October 2023.
They will reportedly eliminate the weight criteria for a more user-centric experience.
Additionally, SingPost has announced its intention to distribute a 1st Local stamp booklet, containing ten stamps, to each Singapore household as a gesture to help customers adjust to the rate increase.
The firm has put forward figures suggesting a more than 40% decline in mail volumes between FY2018/19 and FY2022/23.
SingPost attributes this decrease to digital shifts, which they say has made it challenging to maintain commercial viability given increased operational costs like labour, utilities, and fuel.
Ms Neo Su Yin, the CEO of SingPost, commented on the rate change, indicating that despite withstanding inflationary costs since 2014, current market pressures make a price revision necessary for the company’s sustainability.
She further shared SingPost’s strategic plans to navigate towards eCommerce and logistics as potential avenues to counteract declining postal volumes and tap new business opportunities.
While reiterating its commitment to maintaining high-quality service standards, SingPost asserts its ongoing efforts in self-service, digital platforms, infrastructure enhancement, and sustainability initiatives. The company is positioning itself as an advocate for a greener and sustainable ecosystem.
In collaboration with the Infocomm Media Development Authority (IMDA), SingPost has also mentioned it is reviewing its postal business model, aiming for a longer-term strategy to address what they describe as challenges in attaining commercial sustainability in the digital age.
The revision of mail rates should not come as a surprise, as Senior Minister of State for Communications and Information, Mr Tan Kiat How, had previously hinted at potential postage rate adjustments to ensure SingPost’s business model remains viable without the need for direct Government funding.
Mr Tan was responding to queries from Mr Seah Kian Peng, MP for Marine Parade GRC, during the Parliamentary sitting in July—before being appointed Speaker of Parliament appointment due to Tan Chuan-Jin’s resignation.
Mr Seah had raised questions about the measures being adopted to ensure the viability of SingPost’s domestic post and parcel business in light of the declining traditional letter mail volumes.
He emphasized the potential degradation of services and the implications for local employment amidst restructuring.
Mr Tan highlighted SingPost’s dual role: as both a public postal licensee with service obligations and as a commercial entity accountable to its shareholders.
He pointed to the significant decline in domestic letter volumes due to the rise of digitalization and noted that most mail users today are businesses.
Mr Tan reassured Parliament that IMDA, as the postal regulator, will collaborate closely with SingPost. They will review costs, operations, and the relevance of current postal service obligations, especially in today’s digital age.
Furthermore, he hinted at potential postage rate adjustments to ensure SingPost’s business model remains viable without resorting to direct Government funding.
When pressed by Mr Seah about the assurance of service quality and the extent of rate adjustments, Mr Tan emphasized the existing quality of service framework and the ongoing dialogues between IMDA and SingPost.
These discussions take into account cost overheads, declining volumes, and the operating environment.
On the topic of local employment, Mr Tan underscored SingPost’s responsibility as an employer and its active engagement with unions representing postal employees.
Mr Chua Kheng Wee Louis, MP for Sengkang GRC, further enquired about the regulatory framework and any potential government subsidies to SingPost.
Mr Tan clarified that SingPost operates as a business in Singapore under a license without any subsidies.
The terms and conditions, including service quality, form an integral part of its regulated operations. Regarding commercial aspects, he reminded everyone that SingPost is a publicly listed company, and specific corporate decisions rest with its board and management.
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