An Post could be forced to change the frequency or speed of postal deliveries due to costs and changing consumer habits, ministers have been told.
The postal service’s annual report was brought to Cabinet by communications minister Patrick O’Donovan yesterday. It showed that, while profits were up, there was an “inexorable decline” in overall mail numbers.
Profits after exceptional items stood at €5.6m, up from a €20m loss in 2023, on the back of first-ever revenues of €1bn.
However, core mail volumes fell 7.6%, which the report says is in line with global trends.
Given the challenges being faced by An Post, ministers were told some of the options being explored include fundamental changes to how post is handled.
It is understood that the Department of Arts, Culture, and Sport is to consider a number of proposals, including a system whereby post would be delivered on fewer occasions per week or fewer distribution centres.
Senior ministers said these proposals included “rationalising the footprint” of An Post, with possible reductions in the number of distribution centres to move away from the postal network as was in place “30, 40, 50 years ago”.
One senior minister said that the distribution network would have to change because “people aren’t using it” as they did in the past. They pointed to the fact that the report shows more than 100 post boxes alone were lost in 2024.
Cabinet sources said concerns were raised about the escalating costs at An Post, with a presentation given by Mr O’Donovan to ministers. In particular, it was noted that personnel costs have risen by 10% year-on-year — higher than at any other State agency or semi-state body.
The report shows that staff numbers at An Post had grown slightly from just over 10,000 in 2023 to just over 10,200 in 2024, in part due to the servicing of multiple elections last year, which earned the company €64.5m.
One minister said the discussion included the “well-documented financial pressures” at the semi-state body, with questions around how An Post would sustain itself if core mail volumes continue to drop.
Comparisons were made with other EU countries which have less of a focus on next-day delivery for letters.
At present, An Post has its standard postage rate set at next-day delivery, but the report suggests that domestic and international shippers are now “demanding reliability over speed”.
The report says that, as the industry continues to change, “An Post’s letters and parcels infrastructure and network of post offices will also transform”.
It calls for larger, custom-fitted facilities designed for both eCommerce parcel operations and letters, saying these “are needed to replace numerous smaller letter-focused operations”.
“They’re going to have to modernise,” a source said.
It is understood that junior minister Charlie McConalogue held a meeting with An Post last week, but that a wider review of the existing services of An Post is yet to be complete, and multiple sources stress that changes are unlikely to be made until this has concluded.
In a statement to the , An Post said it is a “self-sufficient State company” and it does not receive any government subsidies.
“The company balance sheet is strong with little debt — an EIB [European Investment Bank] facility used for modernisation and small Bank of Ireland facility — all being fully serviced,” a spokesperson said.
“The company has reduced its debt significantly in the past two years by €48m — including the repayment of a government loan of €30m from its own resources.
“At December 2024 year end, the company had spare cash resources of €38m and undrawn bank facilities of €30m, ensuring it had working capital facilities for its trading operations,” they added.
In May, a report from Grant Thornton suggested that the post office network needs a strategic investment of €15m a year over the next five years or face the prospect of going under.
