Please, Mr Postman

Every few years, someone in Ireland finds a letter from the past, which has been jammed down the inside of a post box for decades…

Every few years, someone in Ireland finds a letter from the past, which has been jammed down the inside of a post box for decades. Social historians arrive to examine the contents of the letter and ponder the way we were. But they scrutinise the message and overlook the medium. Ninety years ago, people relied on the postal system for urgent, daily communication. In the years that have passed, our postal service has become a shadow of its former self. And now An Post must face its greatest challenge - competition.

Many of the Republic's cities and towns used to have three mail deliveries a day. Residents of the capital could post a letter in the morning and be confident it would arrive the same evening. Overnight delivery was taken for granted. Not only did the first post arrive before most people left for work, there were deliveries on Saturday.

Now, the world has changed. If Dubliners, for example, never say "I must hurry to catch the post", it's because there's no point. They know the letter might or might not be delivered the next day, and that even if it is, it will probably arrive around noon. The Saturday delivery was summarily abolished some years ago.

It isn't like this in other cities; in Paris, New York, London, there are two or three deliveries each day - and at least one on Saturday. There, the post office has adapted to each new technology, maintaining and even improving the service over the years.

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A major success was the introduction of zip or post codes. Those few digits at the bottom of each letter allow computers to sort the mail very rapidly; when the postman arrives, all the letters for his route are ready in a neat pile. Another clever move was in allowing what is known as "downstream access" where, for a price reduction, newspapers or magazines give their subscribers' copies, already sorted down to the each route, to each delivery office. They have invested, too, in people, hiring more staff as the volume of letters rose.

In Ireland, the post office has invested millions of pounds in new sorting centres, but because we have no zip codes much of the benefit of computerisation is lost.

An Post has economised, however, by having post delivery people start their rounds later in the morning. As a result, few can afford to have An Post deliver their daily newspaper, because it arrives long after they have left for work. Few would prefer to have a magazine subscription delivered by An Post when the publication will be on the local newsagent's shelf for two days before it finally appears through the letterbox.

Proportional to the total population, An Post has fewer staff than any other EU state, except Portugal and Greece. The French post office has more than double our proportion of workers, and even after 18 years of Conservative government in Britain, the Royal Mail reduced numbers only to the equivalent of 160 per cent of An Post's payroll.

The post office has tried to put a gloss on the declining service. It spends money on advertising its next day delivery "targets", while its Internet website boasts of its £14 million-a-year profits. An Post executives are especially proud of the standard stamp price - which has not risen in several years and is now below the EU average - but don't often mention that what that stamp buys has been pared down.

In addition, the service has gone off on a high-tech tangent; in recent years, An Post has invested in several computer-related companies. The latest of these was the purchase of Ireland On-Line, an Internet service provider which continues to haemorrhage more than £1 million a year.

Another high-tech deal by the postal service may prove even more costly. An Post is currently involved in a court wrangle in the United States over the ownership of the software it uses to deliver social welfare and pension payments. If An Post loses, it will have to pay damages of up to £150 million.

The thinking behind the postal service's focus on the world of computers is simple. For some time, An Post has reckoned that more and more of its customers want to send documents by electronic mail, not old-fashioned paper.

But while An Post switched its attention to electronic mail, companies such as DHL, Federal Express and UPS took another view. They predicted that people would want to have more, not fewer, letters and parcels physically delivered from point A to point B.

All three now have huge operations in Ireland; DHL has a fleet of five aircraft serving Dublin, shifting hundreds of tonnes of letters and parcels a week. If DHL has excess cargo space on its planes, it rents it out to An Post.

In the international market, An Post is trying to compete with the private companies by linking its parcel delivery service to those of other post offices. But once a parcel or letter leaves Ireland, An Post has no control over the quality of the delivery service.

Rather than design its own software to track each parcel, An Post bought a system over the counter which some believe to be less sophisticated than the tracking software used by FedEx, DHL or UPS.

But if the postal service seems to be losing ground now, it could soon find the ground cut from under its feet. Under an EU directive, Europe's post offices are being systematically liberalised. Within the next five years, around a quarter of the letters market - mostly commercial mail - will be subject to competition. Within a decade, the EU plans to end post office monopolies in much of the market.

Other European postal services have been preparing frantically for these changes. The Dutch post office has bought a major international courier service, TNT, and is preparing to float on the stock market. The German post office is buying almost a quarter of DHL.

An important part of the EU directive is that all citizens should have access to an affordable postal system, and that each government has the right to appoint a provider for this universal service.

Recognising that delivery service to many rural areas of Europe is not viable from a commercial point of view, the EU says governments can compensate the universal service provider by giving it the exclusive right to carry certain types of mail.

What the directive does not say, is that governments must automatically award this business forever to the post office.

For sure, in the Republic, it would seem to make sense to appoint An Post as universal service provider. An Post has a network of post offices across the State, and the staff already in place to deliver to 1.3 million homes and businesses. Such a move would also, hopefully, have the effect of re-focusing An Post on its core business, delivering letters.

There are sound political reasons why few government ministers would suggest awarding the universal service provider licence to anyone other than An Post. Any new postal delivery company would presumably want to keep some, but not all, of An Post's resources, systems and personnel.

In a country where the closure of one rural post office can spell trouble in the Dail, the combined votes of post office families across the State is enough to strike terror into the heart of most politicians.

But if An Post is sure to become the universal service provider, there is no guarantee that postal service will be better than the one we have now. And once given the job by the Government, especially if it felt it had the contract indefinitely, it should be made clear that An Post must find the incentive to improve the service.

The EU directive also insists on strict accounting practices by the universal service provider, which would reveal any inherent subsidies of other parts of its business by the uneconomic routes. In the case of An Post, this may place a spotlight on the parcel delivery service, now called SDS. Although in theory a separate commercial entity, SDS continues to make liberal use of post office facilities. In a liberalised market, An Post's competitors are unlikely to accept this.

Given that it is expected to lose money on some of its ordinary mail routes, An Post must be able to make a profit on the remaining part of its reserved market. The snag is that if it fails to do so, it may decide on even more reductions in the quality of its service.

Faced with this, more and more ordinary people would in all likelihood switch to other ways of sending their messages. By then, of course, there would be much beating of breast about how someone should have done something.

But that would come under the category of really late delivery.