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Delivering for the future

Wayne Furbert, the Minister for the Cabinet Office reveals new plans for Hamilton Post Office (Photograph by Blaire Simmons)

It is a fairly simple task to pillory Wayne Furbert for his recent ham-handed handling of plans to reform the Bermuda Post Office.

The Minister for the Cabinet Office blundered into a storm of controversy when he defended plans to have the Post Office team up with a US online shopping company in a bid to shore up the BPO’s dwindling finances —- and to make overseas shopping easier for Bermuda residents.

He failed to answer blindingly obvious questions about why the Government was seemingly undermining local retailers at a time when they were already reeling. Announcing that all Bermudians including himself and his wife shopped online for everything but his business suits was not going to endear him to the thousands of people who work in bricks and mortar retail on the island.

That said, Mr Furbert at least had the courage to take on a problem that most of his political predecessors have run from. So it is worth looking more closely at the vexed issue of the postal service and its future role.

The need for reform of the Post Office has been obvious for decades. Since the turn of the century, it has lost tens of millions of dollars. Competition from private courier services and technological disruptions like email, PDFs and messaging have cut postal volumes dramatically.

That the Post Office has struggled to adapt goes without saying. Cost cutting has occurred painfully and slowly while various innovations have fallen flat.

In 2006, the BPO had 218 staff, expenses of $11.9 million and revenues of $8 million, a loss of $3.9 million.

By 2020, staffing had been reduced to 137 and expenses had been trimmed to $9.8 million, but revenues had halved since 2006 to just $4 million for a deficit of $5.8 million.

This is clearly unsustainable. But it begs the question of whether there is still a role for a publicly owned monopoly which provides a form of universal communication to people at an affordable price - or if these functions should be left to the private sector.

To be sure, other countries have privatised their mail services, including the UK’s Royal Mail. But that at least was profitable when it was sold — the Bermuda service is haemorrhaging money.

If it is worth keeping, then the question is in what form, and whether it should indeed take on other functions as well.

Postal services are venerable institutions. Their historical importance was huge. Postmasters-General were Cabinet-level posts when functions like education and health were not.

In the 19th century, when the penny stamp was established in Britain, they were a means of peaceful revolution. The establishment of an affordable and efficient service dedicated to reaching “all points” helped to accelerate both the industrial revolution and, as literacy grew, democratic reforms spurred on by the wider sharing of news and information.

Bermuda followed suit. The Perot stamp meant communications within and without Bermuda were easier and made the economy run more smoothly, both for agriculture and later for tourism.

Much of this is taken for granted today, but it was truly radical at the time. The question in 2021 is whether it is still worth it.

Certainly private courier services provide similar services more efficiently and without being a burden on the taxpayer. E-mail and other forms of digital communication have superseded the need for the physical transmission of letters and documents. Most people have access to the Internet and therefore affordable e-mail and the like.

But the private sector will also make decisions about who to service and at what price, meaning there is a risk some communities could become communications deserts or that the movement of goods and information could become unaffordable for others, widening inequities in a world which many feel divisions between rich and poor are already accelerating.

It can be argued therefore that there is a public good in offering the public an affordable means of communication which is not subject to the vagaries of the free market.

But if that is the case, how can these services be offered in such a way that they do not burden the taxpayer as they are now, and are there other services which can be offered which not only help the neediest, but act as a spur to local enterprise.

This newspaper has argued that government support for high speed and affordable Internet would be a spur to the economy. In the same way, there is room for the Post Office to help local entrepreneurs to deliver their goods to their local customers affordably so more money stays in Bermuda and local businesses can grow.

This is one of the proposals made by Mr Furbert and although it would put the Government in competition with private enterprises, it would be worth supporting, both to enable the Post Office to continue with its other services and as a public good.

However, the other idea — that the Post Office should partner with an overseas shopping business — is misguided and wrong. By all means, the Post Office should receive and clear online purchases from overseas along with other courier businesses. Amazon shipments are now crucial to the success of US Mail.

But it does not make sense for the BPO to actively encourage more overseas shopping at a time when Bermuda’s retailers are already fighting for survival. This idea should be dropped right away.

There may be other services for which the Post Office’s network of buildings across the Island can used. The old Paget Post Office is already being used for the issuance of boat and moorings licences; there must be other services that the buildings and their staff can take on. All it takes is some imagination.

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Published November 04, 2021 at 8:01 am (Updated November 04, 2021 at 12:27 am)

Delivering for the future

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