Should SingPost stop delivering letters?

Business Times

3 days ago

MY APOLOGIES to arborists, but every two weeks, I make a disgruntled trek from my mailbox to the nearest rubbish bin. Directly from box to bin goes not just unsolicited flotsam – property agents' fridge magnets and handyman's flyers – but legitimate mail that I simply don't need in hard copy, like dividend statements, utility bills and government missives.
Come next year, the Danes will be spared these mailbox-rubbish bin sojourns because Denmark's state-run postal service, PostNord, will no longer deliver letters. Instead, it will start phasing out the nation's 1,500 post boxes this month and focus on delivering parcels.
This isn't a seismic development – since the turn of the century, Denmark has seen a 90 per cent decline in letter volumes. Even so, those who prefer to send a ransom letter the old-fashioned way still can, since the nation's letter market was opened up to private firms last year.
Laidback kidnappers aside, fewer people are posting letters, globally. In Singapore, total domestic mail volume fell more than 40 per cent from 2020 to 2024.
The overseas travails of our national postal service, Singapore Post (SingPost), are confounding, but there is some low-hanging fruit on the domestic front. Today, SingPost's post office network remains unprofitable, while operating profit from its local postal and logistics segment is down.
So, it wouldn't be unfathomable for SingPost to get out of the local letter business entirely, given Singapore's high rate of technology adoption and a national system that has digitally consolidated the vital government services that citizens need.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Currently, nationalisation has been ruled out, but tweaking the postal network and raising postal rates remain options. If rates are merely marginally raised, though, it would be challenging to strike a balance between the resulting fall in letter delivery demand and other costs that might not fall proportionately.
SingPost's monopoly on basic mail services ended in 2007, and perhaps, other private players might be better equipped to sustainably price or subsidise local letter delivery. But if moving bits of paper around the country is financially or logistically unviable no matter which company attempts it, then this service should be treated like a public good and be funded publicly, or cease entirely.
Truly important bits of paper could still be couriered like parcels and priced accordingly. When that happens, I suspect that many businesses will reconsider the need for hard-copy documents in a hurry. 'When a letter costs 29 Danish krone (S$5.69) there will be fewer letters,' PostNord Denmark's managing director said earlier this year.
Indubitably, this change will require drastically reshaping SingPost's obligations as a public postal licensee. It would be a timely opportunity to re-examine what constitutes critical infrastructure in 2025. One might find that this nexus of national security has moved on to other infrastructure such as fibre-optic subsea cables and semiconductor plants. Consider how most of us were notified of Covid-19 vaccinations during the pandemic. During that pathogen-laden time, touching your mailbox would actually have been counter-productive.
There is every chance that this measure might not adequately move the needle on the larger scale of SingPost's woes. If that were the case, that would also be instructive.
For if the albatross and mispricing of letter delivery are not the biggest of SingPost's problems, it probably has other bigger and more intractable ones.