Business & Finance: An Post wants 30% rise in international rates

An Post is believed to have sought a rise of about 30 per cent in
international postal rates. If granted by the telecoms regulator, Ms Etain Doyle, the rise will
be absorbed by commercial customers mostly, who make up more than 75
per cent of the market. It will also hit foreign post offices, who
pay fees to An Post to deliver mail sent from their markets. Early drafts of the group’s application for an increase are
understood to have referred to a rise of up to 60 per cent, but an
informed person said that had been revised. While a 60 per cent rise
was cited in papers presented to the Department of Public
Enterprise, these were ‘redrafted and reworked’. Postal rates have not increased since 1991 and the group’s
submission to Ms Doyle, who regulates its business, is understood to
have said that it is incurring losses across much of its
international postal business. This is in addition to a financial crisis in its post office
network, which is projected to lose up to (pounds) 80 million (E102
million) by 2005. The Government sanctioned a plan last week to
prevent those losses, though it was condemned by the Irish
Postmasters’ Union. The Government rejected An Post’s demand for a State subvention to
keep rural offices open. International postal rates are calculated according to weight of
mail, the distance to be carried and the priority it is to receive
in the system. An Post is understood to have told Ms Doyle that the losses are
being incurred in its mail business to large overseas markets. This
is because the rates charged by post offices to deliver each other’s
mail – known as ‘terminal dues’ – are set according to prices in the
offices’ domestic market. This means An Post must pay ‘high’ rates to the postal service in
Germany, for example, because rates there are high, but can charge
it only the ‘low’ rates that apply in the Republic. It is understood An Post claims its tariffs are the third-lowest in
Europe. It also says its costs are rising, due to national pay
agreements. International mail is a major element of An Post’s postal business.
Between outgoing and incoming mail, the international business
accounts for about 28 per cent of the trade. Some 17 per cent of the
total postal business is for mail arriving into the State. About 11
per cent is post leaving the State.