Update 29 Sep 2024: SingPost closes 12 post offices in two years, pivots to new service model
Clementi Central Post Office at The Clementi Mall during its last day of operations on Sept 20
National postal service provider Singapore Post has closed 12 post offices, or one out of five branches, in the last two years.
This comes as the company struggles with declining mail volumes as most turn to electronic communication instead. Five of the shuttered post office branches were in malls, including Suntec City, Northpoint City and Westgate, while the rest were either standalone branches or found in community clubs, office buildings or Housing Board blocks. SingPost has 44 post offices remaining.
A SingPost spokesperson told The Straits Times that adjustments will be made to some post offices and locations to ensure postal services remain cost-effective and relevant. This is part of business transformation efforts to meet evolving consumer demands in a rapidly changing digital landscape, she said.
SingPost sets three-year deadline for transformation into a logistics player
The move, which comes after an eight-month-long review, could involve selling SingPost Centre in Paya Lebar
Through a multi-pronged strategy, SingPost will attempt to transform itself fully into a logistics company within three years, group chief executive Vincent Phang said during a review of the business on March 19.
The move, which comes after an eight-month-long review, could involve selling SingPost Centre in Paya Lebar, as well as a partial stake in its Australian business to improve shareholder returns. It will also see a change in the company’s dividend policy. These plans fall under the group’s strategy of managing capital more efficiently. This focus could see non-core assets – including the group’s SingPost Centre – divested and the sales proceeds used to pay down debt, invested in its faster growing businesses or returned to shareholders.
SingPost Centre was valued at $1.1 billion as at September 2023. Another initiative is the reorganisation of its business lines into geographic segments consisting of Australia – which accounts for around 60 per cent of the group’s revenue and profits – along with both Singapore and the international operations.
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Postage Rates to Increase Amid Rapidly Rising Costs and Declining Mail Volumes
SingPost's domestic delivery rates from Oct 9, 2023. (Image: SingPost)
Singapore Post Limited (“SingPost’ or the “Group”) today announced that the rate for standard regular mail will be increased by 20 cents to 51 cents, up from the current 31 cents to reflect the escalating costs of maintaining the postal service. The new rates are effective 9 October 2023. The last significant rate incrementwas nine years ago in 2014 when postage increased from 22 cents to 30 cents.
SingPost will introduce upcoming changes to simplify the domestic postage rate structure, including the elimination of the weight criteria, to make postal services more user-friendly, enhancing the customer experience and provide greater convenience. Starting from end-October 2023, SingPost will issue a 1st Local stamp booklet (of 10 stamps) to each household to help manage the postage increase. The global structural decline in postal volumes over the last decade brought about by digital disruption has impacted the commercial viability of postal firms globally. Between FY2018/19 and FY2022/23, mail volumes declined by more than 40%. This rate adjustment will help address the loss caused by the persistent decline in postal volumes coupled with costlier labour, utilities, fuel, and higher conveyance expenses.
This rate increment is necessary for SingPost to continue serving its obligations as Singapore’s public postal licensee while allowing further exploration of a more sustainable postal business model in the long term, balancing the need to remain viable while safeguarding the interests of its shareholders.
SingPost increases postage rate for standard regular mail by 65% amid rising costs
SingPost's domestic delivery rates from Oct 9, 2023. (Image: SingPost)
Singapore Post (SingPost) will increase the postage rate for standard regular mail from 31 cents to 51 cents – an almost 65 per cent increase – amid rising costs and declining mail volume. The 20-cent increase reflects the "escalating costs of maintaining the postal service", SingPost said in a media release on Tuesday (Sep 19), adding that the new postage rates will take effect from Oct 9 this year.
The last significant rate increase was nine years ago in 2014 when rates were increased from 22 cents to 30 cents, according to SingPost. To help consumers manage the costs of the increase, SingPost will issue a first local stamp booklet of 10 stamps to each household from the end of October. SingPost told CNA that it will provide return options for households who do not want or need the stamps, to reduce wastage.
SingPost also said that it will simplify the domestic postage rate structure, "including the elimination of the weight criteria, to make postal services more user-friendly, enhancing the customer experience and provide greater convenience". This will apply to weight tiers for its untracked mail services, it added. This means that 51 cents will be charged for standard regular mail. SingPost currently charges 31 and 38 cents for standard regular mail weighing up to 20g and 40g respectively. Standard large mail of up to 500g will have a flat rate of 80 cents from Oct 9. Currently, SingPost charges 60 cents for mail up to 100g, 90 cents for mail that weighs up to 250g and S$1.15 for mail up to 500g.
SingPost announces 20-cent rate hike for standard mail, now 51 cents
Singapore Post Limited (SingPost) has today stated its intention to raise the standard regular mail rate by 20 cents, making it 51 cents from the previous 31 cents, effective 9 October 2023. According to SingPost, this is the most significant rate hike since 2014.
SingPost claims the rise in rates is due to the growing costs of maintaining the postal service, a sentiment shared by many postal firms globally. The company cites the challenges of digital disruption leading to decreased postal volumes. In what appears to be a move to streamline its services, SingPost has shared plans to simplify the domestic postage rate structure by the end of October 2023. They will reportedly eliminate the weight criteria for a more user-centric experience.
Additionally, SingPost has announced its intention to distribute a 1st Local stamp booklet, containing ten stamps, to each Singapore household as a gesture to help customers adjust to the rate increase. The firm has put forward figures suggesting a more than 40% decline in mail volumes between FY2018/19 and FY2022/23. SingPost attributes this decrease to digital shifts, which they say has made it challenging to maintain commercial viability given increased operational costs like labour, utilities, and fuel.
SingPost delivery business in Singapore lost S$16 million in 2022; review of postal industry under way
Mail volumes have declined while logistics and e-commerce firms have grown their delivery capabilities. PHOTO: LIM YAOHUI, ST
Singapore Post (SingPost) incurred an operating loss of S$16 million in its post and parcel business in 2022, amid declining mail volumes and competition from logistics and e-commerce firms that have expanded their delivery capabilities.
These changes in the postal market have driven up the costs of sending mail, said Senior Minister of State for Communications and Information Tan Kiat How in Parliament on Wednesday (Oct 4), as he explained the rise in postal prices by 20 per cent to 51 cents for standard mail from next Monday. Tan was responding to questions from MPs, including Workers’ Party MP Jamus Lim (Sengkang GRC), who asked whether the Infocomm Media Development Authority (IMDA) had considered SingPost’s S$38.8 million profit in the last financial year (FY) when it reviewed the company’s decision to raise postage rates.
Tan said the postal landscape has changed dramatically in the last decade, prompting the first major increase in postage rates since 2014 so that the licensed public postal company can deliver letters to every address in Singapore. In 2014, postage prices rose from 22 cents to 30 cents. While SingPost’s overall business was profitable in FY2022, more than 90 per cent of its profits came from its logistics business, and largely from its overseas investments, said Tan. “SingPost’s core business in Singapore is post and parcel, which incurred operating losses of S$16 million,” he said. “This is due to the global decline in letter mail, as well as intense competition from logistics companies and e-commerce players growing their own parcel-delivery capabilities. As a result, per-letter delivery costs have risen considerably.”
SingPost’s postage price hike required to sustain postal service for Singapore
Senior Minister of State (SMS) for Communications and Information, Tan Kiat How, defended SingPost’s recent decision to increase postage rates for standard regular mail, citing the need to address financial challenges, accurately reflect postal service costs, and ensure sustainability amidst changing postal dynamics. He said while the overall business of SingPost remains profitable in financial year 2022, more than 90% of these profits were attributable to its logistics business and largely contributed by its overseas investments.
“SingPost’s core business in Singapore is post and parcel, which incurred operating losses of S$16 million” Mr Tan told Parliament on Wednesday (4 Oct). He said this is due to the global decline in letter mail, as well as intense competition from logistics companies and e-commerce players growing their own parcel delivery capabilities. “As a result, per letter delivery costs has risen considerably” he added.
Mr Tan defended the rate increase by highlighting that, even after the adjustment, postage rates in Singapore remained comparable to those in countries like Japan and the US. For context, in Japan, sending items up to 25g costs 84 yen (US$0.56 or S$0.78), while in the US, it costs US$0.66 (S$0.91) to send letters weighing up to 1 oz (28.4g). On the 19th of last month, SingPost announced the rate increase of 20 cents, raising standard regular mail rates from 31 cents to 51 cents, effective from October 9, 2023. This was the most significant rate hike since 2014.
VIABILITY OF SINGAPORE POST’S DOMESTIC POST AND PARCEL BUSINESS
Singapore Post, or SingPost, is both a public postal licencee with universal service obligations and a private listed company. As a public postal licencee, SingPost bears primary responsibility for providing Singapore's postal service and is allowed to access and operate postal infrastructure, such as the national postal code system and physical letterboxes to support this. At the same time, SingPost is constituted as a commercial entity with obligations to its shareholders. As such, it must be able to maintain a viable business model.
Since the COVID-19 pandemic, the speed and scale of digitalisation has led to a sharp decline in domestic letter volumes, from around 490 million letters in Financial Year 2015 to just 260 million in Financial Year 2022. This trend is expected to persist. Many individuals have gone online, opting for paperless communications for convenience and cost savings. At the same time, most Government agencies have digitalised, communicating with citizens through online channels. Today, businesses account for more than 80% of mail users and the average consumer sends less than one letter per month. With this decline, it will be challenging for SingPost to continue running a viable business with its current operating model and at the current postage rates. As such, a balance must be struck to allow SingPost to fulfil its responsibilities in a sustainable manner, while ensuring the continuity of postal services for Singaporeans.
The Infocomm Media Development Authority (IMDA), as the postal regulator, will work with SingPost to review its cost and operations, including optimising and automatic post office services for greater cost effectiveness. IMDA will also review the current postal service obligations to ensure that they remain relevant in today's highly digitalised context, especially given the many alternative electronic communication channels available to consumers and businesses. At the same time, IMDA will consider allowing SingPost to introduce postage rate adjustments in future to better reflect the cost of letter mail business going forward. Domestic postal rates have largely been held constant since 2014, apart from a small increase at the start of the year. The upcoming adjustments will have to be of a sufficient degree to allow SingPost's business model to remain viable without requiring direct Government funding. Finally, as SingPost reviews the company's business transformation strategies to remain relevant, we will work closely with SingPost on a fundamental review of the future of Singapore's postal service, recognising the larger shifts in the delivery ecosystem and changing needs of our local context, including the rise of logistics and e-commerce players.
SingPost achieved record full year revenue of S$1.9 billion with 86% of Group revenue generated internationally
Singapore Post Limited (“SingPost”) today announced its results for the second half and full year ended 31 March 2023. The Group’s transformation led to revenue growth of 12.4% to S$1.87 billion for the full year ended 31 March 2023 (“FY22/23”). The Group’s new engine of growth in Australia replaced the declines in revenues from Post & Parcel and freight forwarding businesses. Logistics revenue increased by 32.4% in FY2022/23, mainly due to the consolidation of Freight Management Holdings Pty Ltd (“FMH”) for the full year compared to four months in the previous financial year.
FMH’s B2B business continued to perform well, driven by increased volumes from customers and acquisition of new customers, as well as inorganic contribution from its strategic acquisitions. Revenue from the Australia businesses, FMH and CouriersPlease, increased from S$413.6 million to S$815.1 million for the full year with the consolidation of FMH. Famous Holding’s revenue declined 12.7% from S$478.4 million to S$417.7 million, as freight rates and volumes normalised post-pandemic. Overall Logistics operating profit grew by 91.3% for the full year, largely contributed by the strong performance of both FMH and Famous Holdings.
Post & Parcel revenue was lower by 16.2% for FY2022/23. Domestic Post and Parcel (“DPP”) revenue declined by 9.3% for the full year. There was a higher base effect from the previous year which recorded significant eCommerce volumes during the pandemic. eCommerce logistics volumes were also lower due to reduced volumes from a major eCommerce customer who insourced part of its logistics. The volume of letters and printed papers continued to decline. International Post & Parcel (“IPP”) revenue declined by 20.6% for the full year. IPP was negatively impacted, particularly in Q1, by pandemic-related lockdowns in China which reduced cross-border eCommerce logistics volumes. The Post & Parcel segment recorded a full year loss of S$15.9 million, compared to a profit of S$24.9 million last year. The loss in DPP and IPP was due to the decline in delivery volumes, coupled with inflationary increases in labour, utility, fuel and conveyance expenses. SingPost is reviewing the commercial sustainability of the domestic postal business.
SingPost is giving households free booklet of 10 stamps
SingPost recently said that it will raise postage rates for standard regular mail by almost 65 per cent from Oct 9. To help households manage increased costs, it will issue a first local booklet of 10 first local stamps to each household from the end of October. SingPost told CNA that it will provide return options for households who do not want or need the stamps, to reduce wastage.
When I read this, my first thought was: Do people still use stamps? I can probably count on one hand the number of times I have sent mail over the past year - once for an insurance claim that required sending in original invoices, and another time when I mailed my new book to a friend.
With digitisation, we no longer rely on mail for things like correspondence or paying bills. Organisations that need to send documents and statements have largely gone paperless and many things that used to require mailing can now be done online. But as these stamps will be issued to households, I wonder if people still send mail to friends and loved ones.
165 years of postal services in Singapore
In celebration of 165 years of postal services, SingPost’s Philatelic Stores will provide special date stamps using gold-coloured ink & new SingPost stamps featuring five designs
From Monday, Singaporeans can buy a special set of five stamps issued to mark 165 years of postal services in Singapore.
The stamps, which will sell for between 60 cents and $1.50, showcase the transformation of Singapore’s postal services from the island’s colonial days to the globally connected city it is today, and feature key developments in the postal sector over the years, said SingPost in a statement on Monday. SingPost Singapore chief executive Neo Su Yin said: “From humble beginnings, postal services have evolved into a global network that connects Singapore to people and businesses across the globe.
The stamp designs were created by designer Wong Wui Kong and feature five themes:
- The colonial heritage - to mark the formation of an independent postal department in 1858.
- The first airmail arrives - to mark the arrival of Singapore’s first airmail in 1919.
- Making every delivery count - to mark the introduction of the first postal codes in 1950.
- Integrating new technologies - to mark the launch of the self-help smart locker station POPStation in 2013.
- A smarter and a more sustainable future - to highlight SingPost’s aim to use technology and sustainability to innovate its operations.
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