Are postal volumes on the verge of a sharp plunge?

The volume of mail making it way through An Post’s trays, cages and vans has been declining about 5 per cent per annum in recent years and is now down 35 per cent since 2007.

And with private post accounting for only 10 per cent of mail in Ireland, the threat is clearly a move to online communications. An Post is now very reliant on its biggest customers – the banks and utility companies – continuing to use the service “and they are driving everybody online”, An Post chairman designate Dermot Divilly said this week.

“For every 1 per cent decline, that’s about €4-€5 million in turnover off our bottom line,” Divilly told the Oireachtas communications committee. “We have to adapt the company to that new lower level, because that is really outside our control.”

The veteran businessman outlined how An Post would have to sell more products and services through the post office network, charge more for postal services (ie more expensive stamps) and reduce its costs. The organisation is, he noted, “a very large employer”.

Its vulnerable position was laid bare in an exchange between Divilly and Green Party leader Eamon Ryan, a member of the communications committee. Ryan, a former minister for communications, said he “could think of no other business where the core business is guaranteed to decline 5 per cent per annum”; but even then, he contended, An Post should be preparing for “real cliff drops” in mail volumes in the year ahead.

An Post only needs “one or two” of the banks to decide to stop communicating with customers in writing for the annual decline in volumes to start looking more like 20 per cent than 5 per cent, he suggested.

Divilly agreed. “As you say, it will come in big drops. Once one bank does it, the other banks will follow immediately.”

But when Ryan offered a timescale of five to 10 years before this potential nosedive, Divilly said it would likely be “even shorter than that”.

“Well, God help us, then,” said Ryan. “It is going to be very difficult to manage the company.”

Very, very difficult.