Exclusive: Privatization for Postal Service?

Bermuda’s postal services could be privatized to bring it back into the black, the island Postmaster General Wayne Smith has revealed.

He said: “We are considering it. You can say very few post offices worldwide have been successfully privatized – in many cases, the government has had to step back in and take them over.

“Notwithstanding, privatization is something that’s being considered.”

Maj. Smith, a former senior officer in the Bermuda Regiment, added that the SAGE Commission, which is looking at ways to cut the cost of government, was due to make it proposals later this year.

He said: “I’m sure there will be suggestions, along with other Government departments, on how we might restructure.”

The latest figures show that the island’s postal service cost $13 million to run — but only took in $5 million in revenue.

Maj. Smith said that — irrespective of the future — he had taken steps to make the Post Office more efficient and to find more ways for it to make money, including better use of hi-tech services.

The number of staff has been reduced by 36 from 232 in 2010 to 196 this year, by non-replacement of staff who left or retired.

He added: “Government negotiated with unions about offering early retirement to people — with these mechanisms, we can reduce to something sustainable, yet still deliver a high standard of service to all our customers.”

Maj. Smith, however, said that the service was pushing ahead with new ideas with the goal of breaking even by 2016.

He said: “We have launched a marketing campaign aimed at increasing awareness of the products and services the Post Office provides.

“A lot of people don’t know what we provide and we had to find a way to change that. We don’t just deliver the mail — we do a lot more than that.”

And the Post Office is due to start a high-security registered email service for transmitting sensitive documents. The service has been provided to government for five years, but is soon to become available to the public.

Mr Smith said: “We have a parcel service and track and trace through our website for parcels that are moving around, registered mail services, retail items and postal collectables.

“We also offer mail boxes for residences and PO boxes, as well as mail holding and forwarding services.

“Bulk mail is also a big opportunity for us – we reach 38,000 households and if a business wants to maximise its reach, this is an excellent way to do it.”

He added: “With a registered email, you can send email which is secure — we intend to be marketing that in the very near future.”

Other potential money-spinners for the service include express mail — at cheaper rates than private sector competitors and a rise in postal rates, which have not changed since 2000.

And, although 88 per cent of PO boxes are in use, Maj. Smith is to launch a drive to rent out the remaining percentage, raising more cash.

Maj. Smith added: “We are also looking to develop strategic alliances with private sector partners — working with Fed Ex, for example, hopefully would generate some revenue.”