SingPost to raise postage rates 15% next month
Singapore Post will raise local postage rates next month for the first time in eight years. The national postal operator in Singapore is planning to increase rates for domestic letters under 20g in weight by 15.4%, or by 4 cents, to 30 cents.
Other weight tiers will also be adjusted.
As well as investment in the business, the rate increase is needed to cater for the rising costs of delivering the mail in Singapore, as letter volumes decline as a result of digitisation.
SingPost said that international postage rates will also increase, partly in response to rising cost SingPost faces in having international mail delivered in other countries.
International rates will range from 5 cents to 25 cents depending on zones. International registered mail rates will rise from $2.20 to $2.50.
SingPost said that since it last raised its rates in 2006, fuel prices had increased by 32%, while national wages have risen by 25%.
International rate changes respond to the changes made by other countries, via the Universal Postal Union, to the fees SingPost is charged for the delivery of international mail within destination countries.
These terminal dues, as the charges are known, have increased by 42% since 2010 after the UPU reclassified Singapore as a “New Target Country”. Terminal dues for SingPost are expected to increase further by 37% by 2017 under a second UPU reclassification.
Woo Keng Leong, the senior executive vice president and head of postal services, said: “SingPost has been absorbing these higher operating costs and inflation for the past eight years while maintaining its local postage rate. This was possible because of productivity improvements, resource and operations optimisation and maintaining strict discipline in cost management.
“The rate revision will allow us to catch up with rising operating costs and inflation and ensure a sustainable service as we invest into the future.”
SingPost said the average Singaporean will face a 24-cent rise in postage costs per year under the new local rates. The company is planning on handing out free stamp booklets to 1.4m residential households and charitable organisations to help absorb the extra cost.
Businesses will also be given a 5% rebate on franked mail for 12 months from the start of October to help mitigate the change.
Investment
As well as responding to its own increased costs, SingPost said the increase in its postage rates will contribute toward its planned $100m investment in service improvements.
The company said that while other postal operators around the world were reducing their investment in letter services in response to the ongoing decline in volumes, SingPost has decided to invest in its services.
Investments include new automated sorting machinery, improved delivery vehicles and an expanded range of delivery alternatives, particularly for parcels.
Dr Wolfgang Baier, the SingPost Group CEO, said: We are committed to deliver the best possible service and are investing $100m into postal and delivery infrastructure, extended operations and people. For instance, the new integrated sorting machines which cost $45m, will help ensure that Singapore continues to enjoy one of the world’s highest mail delivery standards ie 100% delivery by the second business day. As part of our service enhancements, we have extended our operations to 6 delivery days,
with Saturdays dedicated to delivering mail packages.”
