Sending a Letter Not Only Costs More, but Will Also Take Longer

The move is expected to add a day to mail delivery times, but will provide about NIS 33 million in additional revenue for the Israel Postal service.

Sivan Aizescu
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Sivan Aizescu

The Communications Ministry has given the Israeli postal service permission to stop sorting mail overnight in an effort to save on wage costs. The move is expected to add a day to mail delivery times, but will save NIS 15 million a year, says Israel Post.

In another move designed to put the postal company on firmer financial footing, the price of sending a regular domestic letter was recently increased from NIS 1.70 to NIS 2, which postal sources say will provide about NIS 33 million in additional revenue.

Israel Post finished last year with a net profit of NIS 15 million, due to accounting adjustments that reinstated sums that had been set aside in the past; without those adjustments, the postal company would have actually lost NIS 48 million in 2011.

The two cost-saving measures approved by the Communications Ministry - the increase in the cost of a regular domestic stamp and permission to end overnight mail sorting - followed a major campaign by senior officials at Israel Post, who had warned that the postal system was in dire financial straits. The director general of Israel Post, Haim Almoznino, had even told TheMarker that if the postal service did not solve the problems it was facing, it faced bankruptcy.

Nonetheless, Israel Post released financial reports this month that showed that it was far from broke, prompting speculation that the warnings were an effort to exert pressure on the communications and finance ministries. One postal official said that there was no movement on the two issues until the warning was issued.

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