Maltapost chairman David Stellini tells Malcolm J. Naudi that apart from consolidating its core business, the company is keen to maintain a high quality of service while making the best use of its retail network to introduce new products and services.

Staff and management at Maltapost plc will be heaving a sigh of relief this week as the festive rush draws to a close with volumes on certain days being three to four times higher than normal. On some days during this December the volume of letters and other postal items processed by Maltapost exceeded the 470,000 mark, peaking some two weeks ago with almost half a million items processed in a single day.

This year Maltapost pulled off one of its best ever Christmas performances in terms of next-day deliveries with little to no delays either in local or international mail deliveries, with company chairman David Stellini expressing his appreciation to all Maltapost staff for their efforts.

Mr Stellini showed satisfaction that the message to "post early" appeared to have got across, with several million postal items handled during the first two weeks before Christmas alone, and most mail being staggered over the lead-up to Christmas.

"We are quite satisfied with the way the mail flowed and how we managed to process it this year, since last year we received huge amounts of backlogged mail from abroad which had been caught in blockages at Heathrow Airport, and although we had no control over the incoming mail from abroad, at the end of the day the customer sees Maltapost as the one delivering the mail," Mr Stellini told The Sunday Times.

"This year we took preventive action and even appointed a temporary representative to monitor the mail flows passing through Heathrow, particularly from countries like Australia and Canada, where there are large numbers of Maltese families..."

Looking at the bigger picture, Mr Stellini was at pains to stress the magnitude of the changes that have been implemented at Maltapost in the past two years. "Maltapost went through a fundamental change in how mail is processed, sorted and delivered," he affirmed.

The message on the magnitude of the changes has, on the company's admission, not been fully communicated to the public. Most postal administrations worldwide are facing challenges associated with declining mail volumes due to substitution by Internet, e-mail and electronic messaging.

Had the painful changes not taken place, Maltapost would simply not be a viable company and people's livelihood would be placed at risk, Mr Stellini added.

"We need to communicate more effectively with our clients and to better explain our services," he said. "For example, few people realise that during the sorting stage each letter literally goes into a single pigeonhole allocated to every single household and business in Malta and Gozo." These pigeonholes are centrally located in five mail processing and delivery hubs spread over Malta and Gozo.

Up to two years ago, postal items used to be sorted within each of the company's 31 branches spread over Malta and Gozo. This was not the most efficient of processing and distribution methods, since the manpower required to run this system was high and, as a result, the costs involved were significant.

Today mail is first processed within the Central Mail Room and then the process continues at hubs in Qormi, Gzira, Lija, Zejtun and Gozo.

On top of this, the company, which was estimated to be around 30% overstaffed by a series of consultants from renowned postal administrations like Royal Mail and Deutsche Post, was downsized from over 840 employees in 2001 to some 625 this year and productivity has been on a steady increase. The benchmark of efficient delivery - J + 1 (next-day delivery) - has improved from as little as 70% to as high as 97.7% last month.

"Our biggest challenge now is that of fine tuning the system and ironing out the remaining weak spots to deliver a consistently high level of service," Mr Stellini said.

The downside of the hub system is that same-day deliveries for local mail, which used to occur in the past, are no longer possible. On this point, Mr Stellini added that, in practice in the past, less than 7% of all mail was delivered the same day, and this was only possible if the letter was posted before 7 a.m., not to mention the fact that the costs required to do this were unacceptably high.

"The idea that in the past all mail was delivered on the same day is a myth", he added. Still, if people know that their mail will be delivered with a high standard of consistency the following day, then they can think ahead and excuses like "the cheque is in the post" or "it's lost in the post" will be a thing of the past.

Mr Stellini was the first to admit that, from personal experience, some people and organisations used this as a convenient excuse when, more often than not, the cheque in question had not even been mailed.

The final leg of the service, provided by the postpersons, entails walking and carrying a mail bag for as much as eight or nine kilometres on average every day over a pre-set route known as a 'beat', and this is why the average age of post-persons today is between 18 and 25.

Mr Stellini appealed to those who regularly buy items by mail order, like books, CDs and DVDs, to ensure their letterboxes are big enough to take them. "Every day we receive a huge amount of small packets regularly from abroad, which simply cannot be delivered because they can't fit through the narrow slits of many of today's letterboxes."

Maltapost hopes that Government will consider legislating to ensure that the size of letterboxes meets certain approved standards. This is already done in some countries and there is no reason why it can't be done here.

"We can deliver small packages right to your door at no extra cost if we know that customers' letterboxes are large enough to take them," Mr Stellini said. "The problem we are facing is that traditional Maltese letterboxes are too small and the letter box slits through which the mail item has to pass is too narrow, and with most couples being at work at the time the postperson calls, we have to send a notification for the item to be collected from Head Office or one of our retail outlets.

"We'd love to deliver small packages and packets directly to our clients' letterboxes, since we appreciate that it is a hassle asking people to collect small items containing books, DVDs or CDs."

Mr Stellini, 41, was appointed chairman of Maltapost with effect from December 1. A businessman who has spent his entire working life with the family company, Charles de Giorgio Ltd, importers of pharmaceuticals and medical equipment, of which he is managing director, he has served on the council of the Malta Chamber of Commerce and Enterprise, apart from sitting on a number of boards, including those of the Water Services Corporation and the Malta Maritime Authority.

The bulk of the reforms so far at Maltapost have involved processes rather than sophisticated automated machinery. Mail sorting is still carried out largely manually, although the branch network has been computerised, all transactions are recorded electronically and daily reports are generated to track different indices of performance.

The appearance of the branch network is currently being upgraded, depending on the performance of the individual branch, and so far about half the branches have been refurbished, and there are more in the pipeline. Looking ahead, Mr Stellini said Maltapost primarily wants to consolidate its core business - postal and related services - winning back the confidence of its customers.

In particular it wants to focus on direct mail and courier services for which it faces competition both locally and internationally. "We want to be more effective and even our marketing messages have to be clearer and more precisely targeted," Mr Stellini said.

"We have to be more efficient generally and more effective in acquiring more business in core areas, as well as entering into new business areas to compensate for declines we've had in our traditional letter business. Only this will guarantee the company's future and that of our employees."

One of the strengths of Maltapost, Mr Stellini emphasised, is that it has a unique knowledge of every single household in Malta and Gozo. "For example, if a house is vacant and we are doing a direct mail service, we are in a position not to waste mailings. Our personnel deliver mail for a living. It's their job."

He is particularly keen to expand the courier service and a courier product that has already been given a soft launch will be officially unveiled in the first quarter of 2005.

New revenue has been generated to compensate for the drop in traditional mail items, including the launch of over-the-counter bill payments, new philatelic products, including the highly successful 1964-2004 Stamp Album, and direct mail marketing services, among various others.

Although the big reforms at Maltapost have been completed, the nature of the postal business worldwide requires that reforms at Maltapost should continue to fine tune the service, increase efficiency, reduce avoidable costs and generally improve the level of service, but Mr Stellini is confident that things are now clearer and in the future things will be agreed on a smoother basis between all parties concerned.

The collective agreement expires at the end of the year but he expects a "very normal process" of negotiation between the management and the union to be successfully concluded.

Maltapost's priorities for the coming year include some refinement and further embedding the modern processes and systems introduced in the past two years with a view to increasing efficiency, lowering costs and pushing up productivity.

"We are looking into entering into various e-government-related products and services and in doing so take advantage of our extensive retail network (the largest after those of the two major banks). We are still in the discussion stage, but we're prepared to provide the required services to Government and view this as a win-win opportunity for Government, Maltapost and consumers of Government services."

Mr Stellini did not exclude the provision of more financial services to customers via Maltapost's retail network. "At the moment we offer some financial services and products, but there is more we can do in partnership with others," he said.

"We do not have any specific plans as yet, but we must look to the future with a more holistic approach on financial services and other retailing products and services. One thing is for sure, Maltapost is not going to shrink its way to success! We have to get out there, get the business, do new things and improve on what we have today in the interest of our current and future customers."