Hongkong Post should focus on public service, not profit
Two years after the Audit Commission called out Hongkong Post for its lack of profitability and other failings, the postmaster finally moved to fix a structural expense: staff costs. But the audit report probably wasn’t the main catalyst for change. Rather, it was the fact the government had to ask the Legislative Council for a HK$4.6 billion (US$510 million) bailout to keep Hongkong Post…
The Hongkong Post must shift its focus from profitability to public service, according to a recent audit report. The government's bailout of HK$4.6 billion (US$510 million) for the next three years has been the primary catalyst for change, rather than the audit report itself. The postmaster is now contemplating closing underperforming post offices and seeking lower rents in an effort to boost productivity.
However, with letter delivery continuing to decline worldwide, Hongkong Post's survival may hinge on adapting to the digital age. Denmark, as a highly digitalized nation, has already ended its letter delivery service to focus on parcel delivery. While Hong Kong is not at the same level of digitalization, it faces a similar future if its digitalization plans succeed.
The government's digital one-stop platform, iAM Smart, has already attracted over 4 million users, signaling a shift away from traditional postal services. The Audit Commission has warned of the need for reform, with the government pledging to unveil a reform roadmap by 2028. Measures like closing underperforming post offices and securing lower rents are no longer sufficient, as the Post Office Trading Fund, established in 1995, can no longer self-fund its operations sustainably.
While Hongkong Post has attempted to diversify its services, such as cross-border e-commerce, revenues from these ventures have fallen short of expectations. The postmaster has considered various options, including turning Hongkong Post into a government-funded service, creating a joint venture with the private sector, or even privatizing it.
However, the ultimate goal should be to determine what is best for Hong Kong and its people, rather than what is best for the postal service itself. The key question for the government is whether the postal service can continue to provide public services at convenient locations while also generating profit. Experiences from other countries suggest that separating the public service from its commercial operations may be the only viable solution.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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