An Post daily delivery may end in next couple of years, CEO says

David McRedmond says it may not be ‘sensible’ to deliver letters every weekday

David McRedmond said An Post was set to take a financial hit of €10 million-plus this year as a result of Covid-19. Photograph: Maxwells

David McRedmond said An Post was set to take a financial hit of €10 million-plus this year as a result of Covid-19. Photograph: Maxwells

 

An Post daily delivery of letters and parcels to homes around the Republic could stop in the next couple of years if mail volumes continue to decline steeply, its chief executive has said.

In an interview with Inside Business, a podcast from The Irish Times, David McRedmond said: “There is no doubt that will change. There is a point at which it is not sensible to keep delivering six days a week. At some point in the next couple of years, I can see us moving to maybe not every day delivery. That’s a discussion to be had with regulators and the Government.”

At present, An Post delivers letters and parcels Monday to Friday, while packages are also dispatched to homes on Saturdays.

Letters volumes have been in decline here for a number of years as many people switch to electronic communications to stay in touch. Mail volumes fell by 6 per cent in 2019 while parcel deliveries rose by 30 per cent.

Mr McRedmond said An Post was set to take a financial hit of over €10 million this year as a result of the impact of the Covid-19 pandemic.

Inside Business Podcast

Business Today

Get the latest business news and commentarySIGN UP HERE

“It could cost us €10 million, it could be more,” he said. “Some things are very clear ... we’ve spent €1 million on sanitiser and €3 million on PPE [personal protective equipment] for our staff. That’s a cost of keeping our network open.

The other side

“The more difficult thing to calculate is the cost of the reduction in our mail volumes. The issue is, when we get to the other side of this ... when will normal come back?”

An Post has kept its deliveries and post office network open throughout the lockdown introduced by the Government last month to try and halt the spread of the virus.

Mr McRedmond said just seven of the company’s 943 post offices had closed during the restrictions. Some of its 9,000 staff have contracted the virus, although he declined to say how many.

Parcel delivery volumes have risen by about 50 per cent on average with “hundreds of thousands” more people buying goods online during the lockdown.

The number of letters has declined by 25 per cent “primarily because businesses are closed and not mailing”.

Whatever the final cost of Covid-19 for An Post, Mr McRedmond said it would be able to weather the storm by virtue of having €143 million on its balance sheet

“There’s an element of rainy day funds in there,” he said. “This will cost us some money but we should be able to see our way through it.”