How the pandemic left Nepal’s postal service reeling

This month marks one year since any snail mail has left Nepal. Between March and September 2020, pandemic-induced suspensions of foreign air travel meant that the Himalayan republic could not send nor receive any international mail.

While incoming mail resumed in September, outgoing mail has remained suspended.

Despite the resumption of international flights, Nepal’s post offices are yet to accept outbound letters and parcels, except for those destined to India.

How come?

Much of the blame is centred around Thai Airways – which Nepal is currently contracted with to provide air courier services – after it filed for bankruptcy amid the pandemic last year.

With the airline no longer in operation, the public has borne the brunt of the delay. According to the Kathmandu Post, the government has not found a replacement carrier.

“Our agreement was with Thai Airways so when everything came to a halt we were unable to continue our outbound service,” Chief Postmaster at the General Post Office (GPO), Pradyumna Prasad Upadhyay, told the Post.

Services that could be provided by Nepal Airlines are not considered extensive enough to solve the problem at the scale required.

According to a section officer at the GPO, Ramesh Katuwal, the postal service depends on passenger flights as opposed to cargo flights, which had allowed it to keep rates affordable for the public.

“Yes, we could have partnered with more airlines but our rules don’t allow us to work with different airlines,” Katuwal explained to the Post. “I think years back we used to collaborate with different airlines but later we streamlined it for better management.”

For now, they have chosen not to breach the two-year contract signed with Thai Airways, and officials continue to wait on hearing from the company on how they plan to proceed with fulfilling their obligations.

A post-post office future?

As the second-largest government network with a presence across urban and rural areas, Nepal Post provides a range of services including mail, parcel delivery, courier, postal circulation of newspapers, and domestic and foreign money orders.

Suspension of these services for many individuals and companies means being robbed of a public right to affordable communication.

Predictably, private courier services like DHL have filled the gap and profited, while the government hemorrhages revenue.

During the first seven months of 2019, revenue collection stood at over Rs 90 million ($770,622) of the total of Rs 114 million ($976,122) for the year. With international services cut since March 2020 until now, revenue stands at under Rs 40 million ($342,500) during the 2020-2021 fiscal year. Furthermore, Nepal Post has never broken even.

And then there’s the bigger question as to whether Nepal’s whole postal system is in need of overhaul given how redundant it has become in the internet age. After all, people – especially those who are younger – do not have to think twice about choosing the instant ease of digital messaging over antiquated hand-written letters.

Around the world, the pandemic has only exacerbated postal services’ financial woes. The decline of mail monopoly has been the result of a confluence of factors that include the rise of electronic communication, caps on postal rates, outsourcing, borrowing limits and general lack of public investment.

But postal problems are not just a tale of the pandemic’s toll on the Nepalese economy, it also reflects South Asia’s transportation and connectivity constraints: South Asia is described as the world’s least integrated region.

Postal services can still remain relevant and compete with private suppliers. They could focus on parcel services, which have steadily increased due to the penetration of e-commerce in the retail market, as a prime opportunity for reinvention.

Chief Postmaster Upadhyay is optimistic that a combination of commitment and effective action will pave the way for its survival in Nepal.

“There is much to do to win the customer’s heart,” he said in a statement, adding that the GPO should enter into the e-commerce domain and expand postal savings banking services, while enhancing track and trace facilities as well as delivery and distribution capacities.

In 2019, a ministry task force recommended trimming bureaucracy and more autonomy from the centre to transform Nepal Post into essentially a corporation. The proposed Postal Act shortly emerged, which sought to implement the suggestions of the task force and restructure the postal service around the country’s federal model.

The pandemic shelved that attempt at reform – for now at least.