19 Sep Postal service leads in community support
David McRedmond, CEO, An Post, expands on the efforts Ireland’s postal service made to support the local community during the pandemic and the company’s successful pivot in strategy to remain relevant
What has driven Ireland’s successful economic growth?
Ireland has enjoyed remarkable success because it had to. When Ireland joined the European Economic Community in 1973, Ireland had an average gross domestic product per capita that was about 60% of the European average. To catch up to European countries, Ireland had to meet all the mandatory standards required for foreign direct investment, and we reformed our education and tax systems. The key to Ireland’s success is having an open economy based on international trade. Despite changes in our government, our outward-looking economic policy has remained. Ireland has a strong sense of social solidarity; the main goal in our country is to achieve success for everyone. With success, people naturally want more. In the late ’90s and early 2000s the economy overheated. However, we have learned from that. We are now more measured, but still focused on growth and prosperity.
What is An Post’s strategy to remain profitable?
An Post has always been part of Ireland’s infrastructure. However, mail businesses have been in decline for several years because of email and electronic substitution. The future of An Post is in e-commerce and parcel delivery; we have refocused our strategy to switch from being a mail company to performing these essential roles. Our traditional post office business, which particularly looks after social welfare through people’s pensions and unemployment benefit payments, has shifted into an omnichannel business — meaning both digital and physical — in the provision of financial and government services. In both of our main businesses we are moving from the old world into the new world.
Since we launched this strategy in 2017, our revenue has grown every year, including during the pandemic. Our business has moved strongly into profit. Although we had substantial expenditure during the COVID-19 situation, our underlying profitability remained strong. We were one of the few postal companies in the world that kept every mail delivery route and post office open every day throughout the pandemic. Our transformation has worked amazingly well, especially through the reliance on online retailing during the lockdown. An Post now connects Irish citizens with the global marketplace and facilitates trade.
In the future An Post will be undoubtedly strong. It is stronger than it was before the pandemic because citizens, businesses and the government now realize that An Post is an essential infrastructure. The postal sector, which was perceived as an old-fashioned industry, is now understood to be an essential, high-functioning infrastructure for moving goods into, out of and through countries. The other aspect that makes our services essential is our human connection. An Post has a unique relationship with the people of Ireland and is relevant to every community, town and village.
What public initiatives did An Post make during the COVID-19 pandemic to support the Irish community?
An Post rediscovered its soul during the pandemic. We are a commercial enterprise, but at our heart we are a public service. Our purpose is to act for the common good and build social solidarity, now and for generations to come. At the beginning of the lockdown, we gave every household free postcards for children to send to grandparents, for lovers to send to each other and for people who could not connect physically to stay connected by post. People were sending postcards to health workers and politicians. It was a beautiful example of social solidarity.
We also elevated things that postal workers do naturally, such as calling in on the elderly and making sure they received the help they needed, whether it be groceries, medicine or messages. We set up websites where citizens could register those in need and request a delivery postal worker to check in. This gave huge peace of mind to so many people. We also provided free postage for all letters and parcels going to and from nursing homes where the COVID-19 virus was extremely dangerous and visitors were barred. These initiatives really mattered to people and received tremendous response. It gave us the energy to keep collaborating with communities within our reach.
What is An Post doing to support the government’s strategy to lower carbon emissions?
Sustainability is the greatest challenge of our age; the Irish government is hugely committed to it. The legislation on climate change in Ireland has set some of the highest targets of any country in the world. We are signed up to the more ambitious level of the Paris Agreement, which means to limit global warming below 1.5 degrees Celsius, lower than the previous 2 degrees Celsius. An Post brought forward all our target dates. We were going to have reduced emissions by 50% by 2030, and we have moved that target to 2025. Our net-zero target for carbon emissions was set at 2050 and has been moved to 2030. Our targets are scientifically measurable, and we publish a sustainability report annually.
A major challenge around our climate action plan is increasing the electric vehicles in our fleet. Dublin became the first major capital city in the world with zero carbon emissions from its post. However, we have work to do. We now need to convert our heavy goods fleet to electric, although we require the technology to do so.
Our strategy is also aligned with the United Nations’ Sustainable Development Goals. We are committed to proper employment, pensionable pay, sick pay and proper terms and conditions for our workers. We are also developing sustainable communities by making sure post offices are accessible to everyone and taking on initiatives to help vulnerable people stay connected.
How has An Post used digital platforms and fintech to improve its operations?
Because of the economic crash, people’s relationship with main banks was strained. An Post provides an alternative model through An Post Money, which offers standard services and more in a simple format at exceptionally good prices. We provide accounts and loans. We will also soon be providing mortgages. Doing good for citizens —particularly those citizens who are at the margins and who are unbanked — is crucial in building a better society. While fintech is important, so is physical money and cash. A cashless society leaves vulnerable people even more vulnerable. It is vital we make sure we provide old-fashioned services as well as digitally enabled services.
Our fintech capabilities are part of our sustainability pledges. For example, through An Post Green Hub one can receive a low-cost, long-term loan to refurbish homes to improve energy efficiency. One can sign up for a builder, get permission from local authorities and receive government grants all in one place. This allows individuals to easily contribute to the country’s sustainability goals.
Our financial services are not in competition with banks, but are complimentary. We work closely with main financial institutions and function as an agency for banks in rural areas where there is no direct bank branch. If you are using a main bank and you live outside of the main cities, you will likely use An Post to do your everyday banking.
Our An Post Commerce platform helps businesses function online, set up web services and organize their online presence. This was notably important during the pandemic. Although it was mainly for businesses within Ireland, it is now important internationally — more so because of Brexit. Britain’s split from the EU has had a massive impact because it has made customs more complicated.
How significant is Ireland’s relationship to the U.S.?
There are remarkably close and important ties between Ireland and the United States. As part of a global economy, Ireland is a major base for European headquarters for U.S. companies, particularly tech companies like Facebook and Google. It is particularly meaningful that we are now the only English-speaking country in the European Union. We have always historically connected to the United States as much as to Europe. While Europe is a much bigger economy for Ireland, the United States is becoming increasingly more important. As a result of Brexit, we have had to change some of the rules governing trade with the United Kingdom. This will benefit trade with the United States; we now have better rules for Ireland trading outside of Europe. Although they will need to be constantly redefined, this will come with time.
A good example of our connection with the United States is The Ireland Funds, the largest philanthropic organization in Ireland. The Ireland Funds is about getting funds from America into Ireland to help local charities. It is an important entity. The last time President Joe Biden was in Ireland, it was to attend a The Ireland Funds event.
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