In the 18 years since it was hived off from the Department of Posts and Telegraphs, An Post has had a chequered existence. Its trading performance has been mixed and its record on letter delivery has often fallen short of customer expectations.
Yesterday's news, however, that An Post is hurtling towards a trading loss of €47.2 million for the current year will give rise to much concern among the company's customers and its staff.
The Minister for Communications, Mr Ahern, has responded to the news by accusing the company of misleading him and his department officials on trading right through this year. He has requested a report within four weeks which will outline how this sorry state of affairs came to pass and how the company intends to rectify the situation. He also wants to know "how the board exercised its oversight function in relation to the financial well-being of the company".
Mr Ahern is justified in expressing alarm at the trading condition of An Post but ought he be surprised? Yes, the company at the start of the year did forecast a much healthier outcome but An Post supplies Mr Ahern's department with comprehensive figures each month. Were these figures analysed and communicated upwards within the department or is Mr Ahern charging that even recent monthly figures were way off target? For their part, An Post management should explain why a grievously deteriorating financial position was not alluded to when the 2002 results were issued a month ago.
An Post has trotted out all sorts of excuses for the downturn. It was counting on letter growth that did not materialise. The postage price increase came through later than anticipated. The restructuring of the parcel division will cost €7.5 million. Projected savings have not come through. Boil it all down and it is abundantly clear that the core failing of the 2003 trading forecast was optimism insufficiently grounded in fact.
It would not be so worrying if the service provided by An Post had improved significantly but the opposite would seem to be the case, especially as regards next day delivery of mail. The Commission for Communication Regulation agreed to a 17 per cent increase in postal charges which, in fairness, was overdue but the commission is also charged with ensuring customer satisfaction which is indisputably in decline. An Post can forget about another price increase so there will need to be an unrelenting drive to reduce costs, even if it means roadside postboxes in rural areas, which the company was denied.
An Post, in contrast to the rest of the communications industry, is a dinosaur. Its rationalisation programmes have seen staff numbers increase in each of the last five years. It is 18 months behind in its current job reduction programme. It has paid heavily for social partnership which has failed to deliver sufficient performance improvement. It has dodged and delayed change. Market forces and deregulation will not allow it to do so any longer.