The news that Whistl – formerly TNT Post – has sounded the Last Post for its UK door-to-door delivery service didn’t come as a great suprise. Whistl blew time on its door-step letter service in the UK cities of London, Liverpool and Manchester, and is consulting 2,000 workers on redundancy. And while this looks, on the surface, to be a purely UK story, the fact that Whistl ran out of wind on its door-to-door mail delivery service actually has implications for postal services across the globe. The traditional door-to-door letter service is a labour intensive low-margin market in which it’s hard to make money.
It’s not at all clear that the Postman will always be here to ring twice. For those not in the know, The Postman Always Rings Twice is the rather cryptic title of a famous novel which spawned a number of successful movies. The title supposedly represents how its protagonist escapes his fate the first time, but doesn’t a second time. The metaphor here being that letter service providers across the world have just seen that costs may catch up with them in the end.
Even though Whistl cherry-picked the market, choosing to deliver only in three major cities, it still found the going tough. And in the US the USPS is facing an equally torrid time. The USPS Fiscal Year 2015 Integrated Financial Plan projects a loss of $6.1billion. In Australia a similar crisis is playing out. As reported in the Newcastle Herald in October last year Australia Post lost $328 million in letter profits during the 2013-14 financial year, while in Norway the Government has stepped in to entirely subsidise the letter delivery service
The suspension of Whistl’s service highlight the problems underlying the entire door-to-door postal services industry in the era of emails and the internet. Whistl is a thoroughly competent modern company, the majority of its business mail services continue to thrive, but even picking the most lucrative areas it failed to make its foray into the traditional postal market pay. Now think about the position for those long-established universal service providers across the world that have to serve some very remote areas. Very low margins and, for most, an increasingly creaky infrastructure, mean that the traditional postal market faces an uncertain future in many countries.
It’s ironic that the parcels market my company, ParcelHero, operates in is booming as a result of the growth of internet based e-commerce, but the same technology has perhaps sounded the death knell for the traditional door-to-door mailman.
For an interesting look at the history of mail services, and how deliveries might develop in the future, don’t miss this fascinating new blog on our industry.