Transformed company overhauls postal service

Branches to offer everything from theater and airline tickets to insurance policies and cellphones.

By JUDY SIEGEL-ITZKOVICH
No matter where they work and how big their staffs and territory, state postal service directors have the same worries and sing the same refrains. They need to promote public use of mail delivery despite e-mail, faxes and online payment of bills; cope with competition from private entrepreneurs; find a balance between higher costs and postal rates without scaring customers away; shorten queues in post offices and delivery times to homes and businesses; deter theft of valuables sent through the mails; and maintain a streamlined, motivated and efficient staff. For many of its two decades, Israel's Postal Authority had an additional problem less common in Europe and the US: It was stymied by gross politicization, including appointments of senior officials down to lowlevel clerks chosen according to the party affiliation and connections of the communications minister. Like the concentric rings on a tree stump that give an accurate record of years of drought and growth, the political intrusions on postal management have left their mark since the Postal Authority was established out of the Communications Ministry two decades ago. But now the postal service has been offered significant relief. The new Israel Postal Company (www.israelpost.co.il) was established a few months ago, and its director-general is a nonpolitical professional who previously worked in the Postal Authority, its Postal Bank and Bezeq. Unlike some of his eight postal service predecessors who were fired, involved in numerous scandals or targeted in State Comptroller investigations, Avi Hochman has a BA in economics and a master's degree in business administration from the Hebrew University and earned an excellent reputation in private business (the Netafim company). The 50-year-old Ra'anana resident, sitting on an armchair in the seventh floor of the state postal company's headquarters in Jerusalem, will stay as long as he is allowed to work and knows he can find employment elsewhere. When the previous government approved his candidacy last September, Hochman was nominated by then-communications minister (and now Knesset speaker) Dalia Itzik. Now the ministry that supervises the postal company is Shas MK Ariel Attias, a newcomer who came to the Knesset with a reputation as being a wunderkind who ran the haredi party's private kashrut supervision network. Whether or not Shas attempts again to interfere politically with the postal services, it will be much more difficult as, with company status, it is run by a professional board of directors, which provides an insulating layer between outside intervention and postal operations. Asked whether the politicization of the past still affects the postal service, Hochman said in an interview with The Jerusalem Post: "I can't say that there was specific damage, but we did lose money and suffered operational losses. This year, we hope as a state company to have balanced books and even to make a profit." The agreement that made possible the turning of the authority into a for-profit state company was signed by the Histadrut, which agreed to the reduction in manpower of 450 workers, to about 4,000 in three years. Inefficient workers will be sent home, along with some staffers who are close to retirement age. "I am not going to wage war against employees," says Hochman, a tall, personable man with short gray hair (there is no hint of the fact that he is not a native-born Israeli; his parents brought him here from Poland at the age of eight months). "It doesn't matter what staffers' backgrounds are; they will be judged according to their merit. I have put in new management. All are very qualified in the field of information technology, marketing, public relations or retailing. Five of the six are women, by the way, even though dozens of people, including a lot of men, competed for each job." The postal company still needs the Communications Ministry, its official regulator, for permission to offer additional services and to approve rate increases. The postal service is losing its monopoly status in stages, and in about three years even regular letters may be delivered by private entrepreneurs who think they can make a profit. "Of course there is danger that it will be too easy to compete with us. I have to provide universal services everywhere in the country, and our competitors will be allowed to pick the region and service they want. We have been losing money for years because the ministry did not grant hikes in postal rates when we asked for them." Rate increases a few weeks ago, noted Hochman, were allowed only because as a public company it was no longer given exemption on VAT, but the postal rate hikes did not improve profitability. "We want to raise rates, but not too much as to deter customers. I can't yet say how much they should be raised." Within a few months, mail will be delivered to homes and businesses only five days a weeks, and never on Fridays. Hochman insisted that losing one delivery a week will not bother most people, as many businesses that send the bulk of mail, such as banks, no longer work a six-day week either. Because the postal company may not operate in the red, Hochman will close some unprofitable post office branches on Fridays, as well, but he said he has no plans to close down branches completely in development towns, for example, as the company is bound to provide universal service. Fielding complaints heard from various postal clerks about a heavier workload and fewer workers in each branch, Hochman said he is aware of the problem and is working to resolve them. The average time it takes for a domestic letter to arrive is around 1.3 days, Hochman said. "You can't get it below one day, as a letter put into the box at 6 p.m. won't be collected until the next morning." As for various experiments, all discontinued, of bringing registered mail and packages to homes in the afternoon hours when working people are home, Hochman said he was willing to try it again, but only if such a service proved profitable. Postal box distribution centers in neighborhoods - which replace door-to-door delivery and reduce the number of mail carriers - will continue, depending on the needs of the population, Hochman said. "We have received very good feedback about them. The Ramat Hasharon Municipality asked us to replace distribution centers with doorto-door delivery in one neighborhood because the residents were largely elderly. But when we did this, we received complaints! The residents, even though they're elderly, wanted to get out and walk to their postal box to get the mail." Asked about postal workers who steal valuables from envelopes and packages, Hochman said that, from the outset, he made it clear to staffers at all levels that he would insist on honesty. "There are people now in jail who stole from the mails. We have called the police, who have ushered thieves out of their workplace with handcuffs on their wrists. We have advanced security systems, but I can't talk about them. I advise the public to be careful about sending checks and other valuables through the mail. Checks should be filled out properly so that only the recipient can cash them, and they should not be visible through the envelopes." Post offices will undergo a strategic change under Hochman's reign, he said. They will adopt the model in Holland, Germany, Italy, France and other countries in Western Europe of one-stop shopping for everything from theater and airline tickets to insurance policies and cellphones. Every branch has online computer terminals that can offer business services, including Internet. "Not every home has an online computer, and we will fill the gap until there is no longer a need." The number of vending machines selling stamps, envelopes, cartons and other postal needs inside and just outside branches will increase, he added. Postal clerks should spend their time on business that a vending machine cannot do. Hochman is aware of the fact that long queues for buying stamps or handing over registered mail would certainly discourage customers from coming into post offices to make purchases, so he plans to minimize waits and offer postal products either in vending machines or in mini-stores with open shelves inside the branches. He is also ready to provide the infrastructure for electronic voting for primaries and local and national elections in the country's 700 post office branches, but that would take a long-awaited change in the law. Hochman has high hopes for the Postal Bank, which does not charge banking fees of its 300,000 account holders around the country. He wants the regulator to allow the granting of interest on deposits and of interest-bearing loans, as well as the opening of Postal Bank cash machines. The Israel Postal Company, however, has no intention of becoming so hi-tech that it rids itself of stamps, Hochman promised, even though pressing a computer key to print out stamp labels is much easier. The tiny colorful pieces of paper that constitute stamps are still regarded as beneficial "ambassadors" to the world. Hochman is currently negotiating with two upper-middleclass municipalities to finance philatelic clubs in their schools in the hope that the project will spread to the rest of the country. Hochman will not disclose company secrets on the major logistical challenge of carrying out the most visible change from Postal Authority to Postal Company - instituting the new logo. Almost overnight, the signs on post offices, vehicles and uniforms changed from the static little red gazelle and the Postal Authority name to a more modern image of a white gazelle darting forward on a red background. "It was a major organizational effort, carried out by companies we hired, and it is meant to change our image and reflect our new status. But I won't reveal inside information on how much it cost."