Dáil debates

Thursday, 13 July 2017

Topical Issue Debate

Postal Services

9:55 pm

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I thank the Deputy for raising this matter and welcome the opportunity to outline the position on it. The Deputy is correct that the Minister for Justice and Equality, Deputy Charlie Flanagan, has spoken to me about it.

As Minister for Communications, Climate Action and Environment, I have responsibility for the postal sector, including the governance of An Post to ensure the company is fully compliant with the code of practice for the governance of State bodies and the governance functions included in the statutory framework underpinning An Post. Day-to-day operational matters, including decisions on the restructuring of An Post and the operation of the post office and mail centre networks, are for the board and management of the company; they are not ones in which I have a statutory function. Nevertheless, as a Minister and public representative, I am acutely aware of the impact any issue relating to An Post operations has on communities, both rural and urban.

It is Government policy that An Post remain a strong, viable company in a position to provide a high quality, nationwide postal service and that it maintain a nationwide customer focused network of post offices in the community. However, the postal sector as a whole is undergoing systemic change as a result of the growth of the digital economy. The continuing decline in mail volumes, combined with the ongoing impact of e-substitution on retail businesses transacted through the post office network, is a significant challenge for the company and has an impact on its financial well-being.

An Post is operating in a challenging environment and facing an extremely difficult financial position. The company published its annual report and financial statements for 2016 and recorded an operating loss of €13.7 million for that year. Clearly, this is a very significant loss and losses of this scale cannot be sustained. An Post, assisted by McKinsey, is carrying out a fundamental review of the company, with a view to identifying the strategic changes and restructuring necessary to maintain it on a sound financial footing. As the process is nearing completion, speculation at this stage on the future of any part of the national mails network is premature until the full analysis is complete.

I have spoken to many of the staff at the Athlone mail centre, many of whom are my constituents. I am fully aware, therefore, of concerns about the future outlook for the mail centre network. Transforming the postal business will be difficult and will require tough decisions, but the new changes will be designed to make An Post fit for a future in which the organisation can be confident, robust and a winner in the digital world. Government policy is to offer Government services online. In time, it is likely that this will represent the default option in accessing services. For the foreseeable future, however, a segment of the population will not be comfortable or able to access services digitally. The post office network is the obvious choice for citizens as the offline gateway, with its nationwide network and existing strong relationship with offline citizens.

The post office network can play a role in simplifying back office functions to facilitate better and more efficient processes. In relation to the parcels market, this week An Post launched its new worldwide open advertising campaign aimed at its e-commerce parcels business. The company aims to grow its current 25% share of the parcel deliveries market by making it easier for consumers to trade goods. Owing to the growth of online shopping, the volume of parcel traffic through the mail centres is increasing.

I am closely monitoring the position and hope a pragmatic approach that will ensure the long-term sustainability of An Post and the post office and mail centre networks can be agreed to. The Oireachtas will be briefed once a definitive strategy has been agreed for the company. Until that time, however, it would not be appropriate for me to comment further on the process.

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