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NZ Post wants businesses to pay more for mail

Published: 1:40PM Monday November 26, 2012 Source: Fairfax

  •  (Source: Reuters)
    Source: Reuters

Businesses wanting mail delivered with a one day turnaround could be staring at higher charges if NZ Post convinces the Government to accept a raft of changes to its deed of understanding.

The proposed changes are part of a bid to reshape the state-owned company's business model, which has been trapped between mail volumes declining due to the internet and entrenched service delivery terms keeping costs high.

As it stands, NZ Post is required to service 95% of delivery points six days a week, a level it is looking to trim to three days.

Physical mail volumes have been savaged in recent years as private businesses such as power utilities have started charging customers as much as $1 for paper bills in a bid to cut their own cost bases.

In its 2012 annual results announcement, published in August, NZ Post said 54 million fewer letters were posted in the financial year which equated to a $17 million drop in revenue.

Last month ratings agency Standard & Poor's slashed the group's credit rating by one notch to A-Plus on stable outlook, citing its declining mail volumes and increasing reliance on subsidiary Kiwibank to generate revenues.

No changes to the 1998 Deed of Understanding have been signed off as yet, but talks between Government and the postal operator are ongoing.

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