Hongkong Post - The Postmaster General's Statement

2013/14 was a year of consolidation for Hongkong Post. With the concerted effort of our team, we saw a significant improvement in the financial performance of the Post Office Trading Fund. Although still falling short of the target rate of return, the Post Office Trading Fund's operating loss was narrowed notably from $114 million a year ago to $2.6 million in 2013/14.

The improved financial performance was partly due to the additional revenue arising from the long overdue principal postage adjustments which took effect on 1 October 2013 and the adjustments to certain miscellaneous postal fees under the Post Office Regulations (Cap 98A) from 1 December 2013. It also owed much to our rigorous efforts in cost management and business development.

Provision of postal service is a labour-intensive undertaking. With a workforce of over 7 000 staff, payroll costs account for a significant portion of our operating expenditure. During the year, we implemented various measures to contain payroll costs. The installation of upgraded mail sorting machines with a more powerful optical character reading capability at the Central Mail Centre is a case in point. Coupled with ongoing efforts to require bulk mailers to improve the address presentation in their mail, the read rate of standard machinable letter mail now exceeds 90% and the extent of manual processes is correspondingly reduced. With the establishment of a new Bulk Air Mail Centre in Tsuen Wan and a bulk acceptance counter at the Central Mail Centre, we have further streamlined the handling of bulk postings through more extensive work sharing with bulk mailers and load levelling measures, e.g. pre-booking of posting slots which reduces the queuing time of mailers and slack time in our mail processing units.

The implementation of these cost management measures is not in any way at the expense of operating performance. We achieved all our performance pledges during the year and, indeed, well exceeded some of our performance pledges. This is particularly impressive given the very high performance standards we have set ourselves, e.g. to deliver 99% of locally posted letters to local addressees by the following working day.

In response to the evolving service needs of our customers, we have continued to look for innovative solutions. The launch of Smart Post, a door delivery-cum-counter collection local mail service with electronic notification and mail tracking, and the extension of e-Express service, an economical tracked service for small packets, to four additional destinations are timely responses to the demand of local and international online shoppers for customer-friendly delivery solutions. The digital age offers new business opportunities for the postal industry; and we in Hongkong Post are quick to seize them.

Hongkong Post maintains an extensive postal infrastructure comprising counter offices and various back end mail processing facilities. We are always on the lookout for ways to rationalise and diversify the utilisation of this infrastructure. The integration of the International Mail Centre and the sorting office at the General Post Office into the Central Mail Centre enables us to achieve economy of scale in mail processing. During the year, we have made proactive effort to attract Government departments and external organisations to make use of our post offices and second pouch boxes for advertising purpose, thus introducing a new revenue stream. Preparation for the reprovisioning of the General Post Office Building is now underway, opening up scope for consolidating various offices now in different locations. In the year ahead, we will further examine the scope for rationalising our post office network with the objective of dovetailing our service points with service demand while ensuring economy.

Hongkong Post has an ingrained service culture. We take pride in constantly enhancing the experience of our customers when using our services. The establishment of a new Business Customer Liaison Group provides a forum for two-way communication with our valued business customers. The feedback obtained will enable us to be more responsive to the service needs of this important client segment.

The challenges that Hongkong Post has been facing in recent years have prompted us to implement resolute measures to improve our financial and operational performance as well as corporate governance. Although we are not yet completely out of the woods, there is a clear sense of direction and purpose. Despite the odds, we remain firmly focused on our mission of providing a professional and efficient postal service to the local community at reasonable and affordable prices. With steady effort and an unyielding spirit as well as the support of our customers, we are building a more solid foundation for the Post Office Trading Fund to support its sustainable development into the future.

Mrs. Jessie TING
Postmaster General and
General Manager of the Post Office Trading Fund