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The death of snail mail?
Sun, May 16, 2010
New Straits Times

PEOPLE separated by oceans and continents can now "talk" in real time, thanks to email, instant messaging and social networking sites.

Technology even allows those on different sides of the planet to "see" each other over their computer screens and other hi-tech gizmos.

The news report about the decline in mail volume, therefore, came as no surprise.

Elaborating on the report, Pos Malaysia corporate communications group head Datuk Rohaiza Hashim says between 2005 and last year, Pos Malaysia's overall mail volume declined by 0.7 per cent.

Last year was the lowest -- 1.25 billion compared with 1.27 billion in 2008.

Rohaiza says fewer festive cards were being sent out.

"Generally mail products have shown a single-digit contraction with the exception of festive cards which saw a two-digit reduction. Over the five years, festive card volume declined by 15.6 per cent.

"Last year, there were about 12.2 million festive cards sent. They made up only a small component of the total mail volume of 1.25 billion."

The decline prompted Pos Malaysia to announce an increase in the price of its domestic postage stamps recently. This would help contain costs and maintain productivity at the same time.

This is the first time that the price of domestic postage stamps is being increased in 18 years, since the company was corporatised.

The increase in the price of stamps will affect standard mail below 50g, non-standard mail below 100g, periodicals, Pos Dokumen, registered mail and parcels below 2kg.

As of July 1, the price of stamps for standard mail weighing up to 20g will be revised from 30 sen to 60 sen. For those weighing up to 50g, the price will be 70 sen, up from the current 40 sen.

Cheah Wai Seng, senior manager at Accenture, a global management consulting company, says many postal players around the world have seen a dramatic decline in mail volume.

This is due to two factors. "Alternative electronic channels and the demographics are working against the traditional postal service. The younger generation is not inclined towards mail. This is the trend that we need to live with.

"Customers are looking to communicate more efficiently and cost effectively. They want maximised returns and are turning to social networking, email and instant messaging. They expect access to information and services in real-time or at their convenience.

"At the same time, they are coping with unprecedented levels of instant information access through the use of affordable portable devices such as netbooks and mobile phones," he says.

Accenture's recent research on the postal industry, says Cheah, indicates that this trend will inevitably erode the traditional postal business, either partially or totally.

Rohaiza is, however, confident that the outlook is not entirely glum.

"While we expect social mail to decline further, business mail is expected to remain steady.

"Pos Ekspres and Parcel services are also poised to grow along with the demand in the e-commerce fulfilment business and online shopping. Over the years we have recorded a growth of between five and 10 per cent for Pos Ekspres and Parcel services."

There is also a strong potential for direct mail marketing, she says, as 99 per cent of Malaysians are accessible through the postal channel.

"For example, companies can send out discount coupons and promotional booklets to potential customers using the mail."

Although facing dwindling mail volume, Rohaiza says Pos Malaysia will not pull out any of its products and will continue to strive to make things more convenient for customers.

"We have introduced Mel Rakyat, for instance, to enable the people to correspond at a minimal postage cost of 30 sen nationwide. It is similar to the Aerogramme in its form and function.

"Customers can purchase Mel Rakyat at any of our extensive network of more than 700 outlets all over the country and it can be posted at the normal red post boxes."

The experts say new approaches are needed.

Cheah says postal operators need to integrate physical and digital communications.

"They must offer multi-channel receipt and delivery, allowing both originators and recipients to choose the delivery mode. They should exploit the benefits of hybrid mail, provide flexible services for handling data, documents and distribution to customers, and adapt to customers' needs."

He says postal operators that have adopted a strategy to reduce their reliance on traditional mail products have emerged as clear winners.

"Australia Post saw margins improve over the years after Web-enabling its retail outlets via netPOS, allowing real-time connections between Australia Post and third parties."

Malaysia's postage price, says Cheah, was still relatively inexpensive compared with other countries. He says many postal organisations around the world had increased postage fees to address the drop in postal volume. The United States Postal Service increased its stamp prices in May last year by two cents; and the Australia Post announced a five cent increase for basic postage rates this year.

Ahamad Shukri, SAS Malaysia's head of public sector, says Pos Malaysia must reinvest the added revenue from the increase in postage stamps into productivity-enhancing projects.

SAS provides data warehousing and performance management applications for leading postal agencies in Norway and Canada.

"Pos Malaysia should tap into communications technology and look for niches where it can play a crucial role. The growth in e-commerce will fuel the growth in parcel delivery, which Pos Malaysia should take advantage of.

"Each generation -- baby boomers, X, Y and Z -- have a unique way of doing things. It should understand such behaviour to come out with winning service offerings.

"Pos Malaysia has a logistical advantage as it has built a large physical network over the years. These assets could be monetised further by offering more services."

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