Analysis of India Transport and Logistics Market May07
Analysis of India Transport and Logistics Market May07
Read MoreTag: India
Instant money order in Malabar
The Postal Department has launched Instant Money Order (IMO) scheme in the Malabar region of Kerala to provide speedy and hassle-free cash transactions at comparatively cheaper tariff.
”It takes only five minutes to make the payment to the beneficiary and that too at cheaper tariff,” through any head post offices (HPOs) in the country,” Assistant Director N V Balan, coordinating the scheme, said.
He said a sender has to pay only Rs 150 for Rs 1000 to 5,000 and Rs 330 for above Rs 5,000 and upto Rs 50,000 as against the normal five per cent money order charge.
The facility, launched about a month ago, was available in 17 head post offices (HPO) in the region and would be extended to other computerised post offices soon, he added.
The department was in the process of embarking on a advertisement campaign to spread awareness among the people about the scheme, Mr Balan said.
Read MoreThe bill with wrong address
One wonders why the India Post Amendment Bill has been mooted. It is just not worth the effort. And it doesn’t matter if the bill gives monopoly rights to the government carrier in a certain weight category, or if it forces private courier companies to charge many times more than India Post. In the first place, this is simply a restrictive trade practice. From a business perspective India Post is simply picking a lemon.
Consider their argument for seeking a monopoly right to carry letters and documents that weigh less than 150 grammes. DoP believes that it alone services the universal service obligation (USO) because it has thousands of branch offices in the rural areas where there are no courier services. It loses Rs 700 crore annually to run these branch offices. In doing so, DoP incurs extensive losses on almost every product that it delivers. So why is it hankering to do more of the loss-making business? If DoP actually gets to implement what it is looking at then its losses will compound.
The situation might actually be worse. This segment has been growing at a slower pace when compared with the express parcels and logistics segment. According to the latest survey conducted by the universal postal union (UPU), almost two thirds of public operators across the globe are anticipating a drop in the proportion of income generated by the letter post, with the proportion of income generated by parcels & logistics and to a lesser extent by postal financial services set to increase accordingly. Compared to express parcels and logistics, projected to grow at almost 25% over the next three years, the letters and post segment is projected to grow at only 8% to 10%. It is intriguing, then, why India Post still wants to create a strong foothold in this segment while its cousins abroad—Deutsche Post and US Postal Service—are focussing largely on parcels & logistics services.
DoP has cited international examples to strengthen its case for retaining exclusive privilege. While most countries allow the official postal department to reserve certain segments of the postal business, the international trend is toward opening up the postal sector. The European Union has made it mandatory for its members to open up the postal sector by 2009. Japan also plans to completely privatise Japan Post, a state-owned entity, by 2007.
Read MorePlan for private post put on hold
Under pressure from postal department unions, the government has decided to review its to decision to open 100 private franchise post offices across the country. Currently, at least one such post office is functioning in Tamil Nadu.
In October 2006, the government had passed the order to open private postal outlets across cities and towns. The agreement with the private partner was to be based either on profit sharing or commission basis.
The cancellation of the order was one of the main demands of the two major postal department unions – Federation of National Postal Organisations (FNPO) and the National Federation of Postal Employees (NFPE) – which had threatened to go on an indefinite strike from April 24. More than 5.5 lakh employees of the postal department owe allegiance to the two unions. After a meeting between the two unions and the department of post, which was represented by the chairman of the postal board I.M.G. Khan, held over Thursday and Friday, the government decided to review its decision to open any more private post offices. The strike has also been postponed.
Pillai said the government has also agreed to look into the demand for setting up a judicial commission to look into increasing the pay structure of “grameen dak sevaks”. Khan told the union delegation that the demand would be put up to the Union Finance Ministry and the Cabinet, as they are the authorities to examine the demand.
The postal network had come to a standstill when the employees had gone on a two-week strike in 2000. This time, the strike would have not only affected the normal functioning of post offices, but also the many financial activities, including collecting of IT returns besides dispatching passports through speedpost, the outlets conduct at present.
Read MoreIndia – Courier services becoming dearer
Sending packets through private courier companies could get expensive, with the Government proposing to stipulate higher tariffs for mails less than 150 gm.
The draft Postal Bill, which is expected to be tabled in the ongoing Budget session, has proposed to impose a tariff on mails carried by courier companies that is fives times the charge taken by the Postal Department.
So, while a 20 gm mail is charged Rs 5 by the post offices, the same will cost Rs 25 if you send it through a private courier. The rationale for the differential tariff is that the Government is giving up its monopoly on low-weight mails.
While the earlier draft of Postal Bill had completely barred private courier companies from carrying packets weighing more than 300 gm, the revised proposal removes this ban but on the other hand imposes a higher tariff rate for packets that weigh less than 150 gm.
This means that consumers could cough up as much as Rs 200 for sending a packet weighing 140-150 gm through private courier companies even as the post office will charge only Rs 40.
Currently, charges taken by courier companies are not regulated. According to Government sources, a number of countries follow such differential tariffing wherever the Postal Department gives up its monopoly.
For instance, in Germany, private courier companies have to charge two-and-a-half times the price fixed by Deutsche Post for packets weighing up to 50 g.
In Australia, courier firms have to charge four times the price fixed by Australia Post Corporation for letters up to 250 gm.
In the speed post and registered post segments, private companies will have to charge two-and-a-half times the fees charges by the Postal Department.
So, if you want to send a 200 gm packet to a destination 2,000 km away through private speed post, it will cost you Rs 125 compared to Rs 50 by the Postal Department.
Post & Parcel Magazine
Post & Parcel Magazine is our print publication, released 3 times a year. Packed with original content and thought-provoking features, Post & Parcel Magazine is a must-read for those who want the inside track on the industry.