The number of late deliveries from New Zealand Post has doubled in the past three years, but the postal service is doing much more with much less.
A comparison between the January to September periods of 2019 and 2022 reveals a service struggling to keep up with unprecedented demand while recovering from the Covid-19 pandemic.
According to comprehensive data given to RNZ, 7 million domestic and international parcels were delivered late from the start of 2022 to the end of September, compared to just 3 million during the same period in 2019.
The total volume of deliveries also increased, but at a much slower pace - up just 24 per cent, from 48 million to 60 million.
“This surge of parcels created a backlog as we worked hard to scale up to try and meet demand. Unfortunately, this did mean that many customers experienced delays.
“We apologised to the public for those delays at the time, and learnt from the first lockdown to redesign our network and operations for the next ones.”
These difficulties, Main said, were exacerbated by Kiwis’ growing interest in online shopping, which has “grown significantly over the last decade”.
“Five years ago NZ Post delivered about 60 million parcels a year, compared to about 105 million parcels in 2021.”
All of this as NZ Post’s workforce shrank; 926 delivery staff were working across the country at the end of 2019, but by September of 2022 that had dropped to just 713.
A NZ Post "super-depot" in Wellington. Photo / RNZ
This was offset somewhat by a significant decline in letters. From January to September 2022, NZ Post delivered 110 million letters. During that same period in 2019, it delivered 166 million.
Main said that number would continue to drop.
“[We’re] continuing to experience significant declines in mail volumes as New Zealanders choose to communicate more online,” he said.
“In the 2022 financial year, NZ Post delivered 238 million mail items, a decrease of 36 million on the previous year, and this is forecast to decline further. This is compared to almost 20 years ago when NZ Post delivered over 1 billion mail items a year.”
Silver lining
Although NZ Post experienced more delays throughout the first nine months of 2022, the length of those delays was reduced. On average, a late delivery in 2019 would arrive 2.23 days later than scheduled - but in 2022, it would arrive 1.87 days late.
The delays were even shorter for international deliveries, largely because of the GST law change in late 2019. International delivery in 2019 would be held by customs for just over 12 days, but in 2022 was cut down to six.
The postal service was thrown into disarray when Covid-19 struck in February 2020.
“Covid-19 wreaked havoc on international supply chains,” Main said. “Before 2020, NZ Post used passenger flights to bring parcel and mail items into New Zealand to then be delivered to customers, but as passenger flights decreased to almost non-existent levels this created huge challenges in international freight movement.”
Main said his team was forced to adapt.
“We’re very proud of how our teams stepped up to the challenge, including chartering flights, finding alternative routes and using sea freight where possible.”
Predictably, NZ Post’s low point was in the pandemic’s first months, when a whopping 5 million tracked deliveries arrived late between April and June. This meant one in every four parcels missed their expected delivery dates.
Conditions have improved significantly since then, but NZ Post is still grappling with the pandemic’s impacts.
“We are now starting to see the international import/export routes get closer to normal,” Main said. “But there are still some restrictions on airline capacity and supply chains are less resilient [than before].”
Those challenges have been softened by a significant funding boost from the government, but that money is running out.
“In 2020 the Government committed to providing $130 million over three years to NZ Post,” Main said. “This allowed us to continue to provide nationwide coverage for mail delivery at current service levels and with price increases lower than what they otherwise would have needed to be.”
Main warned price increases could be incoming.
“As this funding runs out, NZ Post will need to continue with its transition to a commercially sustainable mail service, which will include pricing, cost and operating model changes.”
