President Kim Ki-duk of Korea Post said he will strengthen the company’s home delivery and international postal service to normalize its operations, which have been on the decline in recent years. He made the comments in his first interview with a local daily since he became the top executive last month.
The new president has a number of critical problems to solve. He aims to improve the organization’s deficit, which has been in the red for the past four years. Due to low interest rates, Korea Post’s financial sector operation has been shaken, including deposits and insurance businesses.
To stop the decline in its earnings, Korea Post merged 100 of its postal service branches and released 1,023 employees.
In his inauguration speech, the new president said, “we should build the roads if we come to the mountains in our travel to make the Korea Post profitable again and build bridges if we come to a river,” in his call for putting the postal service back on track.
Kim ought to know what to do to improve the postal service, as he spent more than three decades working for Korea Post.
He held a string of top posts with the postal service, including chief of the postal service department, and chief of the Seoul Regional Postal Office.
Under the Ministry of Science, ICT and Future Planning, Korea Post posted around 10 trillion won in annual revenue last year, including 2.8 trillion won in postal services, 2 trillion won in deposit account for fund transfer service, and 5.3 trillion won in life insurance policies sold.
It employs 41,000 people.
Its operation began to decline with the start of electronic mail services in Korea, which caused reductions in the postal mail delivery to 4.2 billion cases with the profit base for its financial service getting eroded at the same time due to low interest rates and low economic growth over the past several years. The situation has become so bad that the postal service system required an overhaul, especially the expense structure and other vital sector of the postal service operation.
The new CEO is confident that Korea Post can be put back on track if it is able to make its 3,500 postal offices around the country, including those in remote areas, turned around. At the same time, the CEO said all employees must approach their jobs with a creative mind to find new projects that will bring profits to the postal service.
Kim said Korea Post has already been making money by opening sales channels to small business people and acting as a sales agent for handphones. “We will find more new projects for Korea Post to make profits,” Kim said.
The home delivery service sector last year had its worst performance since it was first launched in 2000, with earnings down 10 percent from the preceding year at 347.7 billion won. He said the postal service ceased delivery on Saturdays from July last year. An agreement was reached with the union so that the home delivery service will be resumed on Saturdays starting from Sept. 12.
Kim also said the Korea Post can beat the present leaders in the international home delivery service such as DHL and FedEx because it has a cost advantage, with the lowest fees among competitors. He plans to improve the Korea Post’s international home delivery service by strengthening its delivery information in real time and other related services so that it can top its rivals in the industry.
The Korea Post will also secure tie-ups with IT companies and tie-ups with Kakao Pay and Naver Pay, among others, so that customers can pay for shopping and home delivery services conveniently with their smartphones.
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