NIPOST Rues Shrinking Mail Volume, Misses Revenue Target

Nigeria Postal Service (NIPOST) has decried the shrinking volume of mails on daily basis adding that the case is being worsened by companies now preferring compact discs (CDs) to printed annual report, which form bulk of NIPOST’s business platform.

Mike Umo, general manager, BulkPost Venture, an arm of NIPOST told Nigeria CommunicationsWeek in Lagos that owing to present business trends the Venture has found itself, it has become extremely difficult to attain its over N700million annual revenue target.

“Although we still have few weeks to the end of 2013, but we have not achieved our revenue targets. The year, I wouldn’t say is generally bad for us, on the average it is still acceptable. The issue is that mail volume is shrinking by the day; especially when companies in the way to cut cost, they have resulted to converting Annual Reports (ARs) to compact discs (CDs). Now, reports that use to fetch us, by weight, N150:00 or N200:00 per copy have been reduced to CDs. And CDs no matter how padded it may be, it cannot by, the virtues of weight and monetary, be more than N60:00.

“Here in BulkPost Venture, we have a ratio of 60:40 that we give to courier operators. So, with 60% of N60:00 it is difficult for us to meet our targets (revenue wise). Along the line, especially when we had the heat so much, management had to look at the issues; at the same time, customers too were complaining about CDs,” the GM said.

Umo also explained that to convey a CD from one end to another, most times, leave the plates in bad condition. He said that some of the customers have complained of cracking of the CD. “So management rose to the occasion to repackage them in manner that they will arrive to the destinations in good shape. That made the management to come up with a flat rate for CDs, currently pegged at N150:00,” he said.

The management’s decision, he noted, actually cushioned the effect on the Venture’s revenue, otherwise the process really had its nosedived.

“For instance, in the BulkPost we have over N700million target. So far, we have not been able to meet the target, unless something happens before the end of the year. Be that as it may, we still thank God, because if not the management’s position the revenue would have been so down. Meanwhile, the customers are patronizing us because we have entrenched trust in the system.

“Although some of them tend to reduce the quantity of CDs they would have produced. For instance a Company with 500 shareholders may decide to 300. Invariably, the N150:00 has not made us to be on advantage hence the reduction in the number of CD copies produced still affect the revenue drive,” the BulkPost boss said.

On strategies to tackle challenges in the coming year, he said that the Venture will not relent in exploring new grounds and harnessing prospect customers. “We are considering going into direct marketing mails. And we believe that if we explore that area very well it will help us overcome most of our challenges,” he said.

He added that the Venture is organizing a Forum in Lagos on December 12 at Sheraton Hotel, where stakeholders will look at critical issues in the sector.