Tan Kiat How on SingPost’s projected revenue after postage rate hike

The postage rate for standard letter mail will increase by 20 cents to 51 cents from Oct 9 and the impact will be felt mostly by corporates rather than households as they account for 80 per cent of all letter mail sent in Singapore. While the overall business of SingPost remains profitable in Financial Year 2022, more than 90 per cent of these profits were attributable to its logistics business and overseas investments. SingPost’s core business in Singapore is post and parcel, which incurred operating losses of S$16 million. This is due to the global decline in letter mail, as well as intense competition from logistics companies and e-commerce players growing their own parcel delivery capabilities. As a result, letter delivery costs have risen considerably. SingPost raised postage rates to better reflect the costs. After the increase, postage rates in Singapore remain comparable to countries like Japan and the US. But there is no guarantee that the increase in postage rates will improve the financial position of SingPost or compensate for the accelerated decline of letter volumes. Senior Minister of State for Communications and Information Tan Kiat How shared this assessment in reply to questions from MPs in Parliament on Wednesday (Oct 4). He said as part of the postage rate increase, SingPost is expected to invest in transforming its domestic post and parcel business so that it remains efficient and provides high-quality service. He said this is a move that could put SingPost on a more sustainable path.