Mon | Nov 18, 2019

Post hikes Fast Track ecommerce fee

Published:Wednesday | October 16, 2019 | 1:33 AMSteven Jackson/Senior Business Reporter
A Jamaica Post branded bag is seen on display at the Savanna-la-Mar Post Office. The Jamaica Postal Service implemented a large rate increase for its Fast Track service on which many small traders rely to send products overseas.
A Jamaica Post branded bag is seen on display at the Savanna-la-Mar Post Office. The Jamaica Postal Service implemented a large rate increase for its Fast Track service on which many small traders rely to send products overseas.

Micro traders using Fast Track, a three-day delivery service to the United States (US) and other parts of the world, were hit with a fee hike by the Jamaica Postal Service this month ranging as high as 80 per cent, according to different sources.

It’s the first real jump in fees for the Fast Track service since Jamaica Post implemented it in 2014.

Users of the service say it will have a negative effect on their businesses.

Rory-Craig Walker, CEO of Jamaican Care Packages Limited, says it means he will end up hiring fewer persons in Jamaica,” which isn’t what we would like to do as job creation is important to us”, he said.

Walker operates an online store with curated Jamaican food and candy for global delivery. Quick delivery remains a big calling card for Jamaican Care Packages customers.

Fast Track prices now start at about $3,800 for packages bound for the US, up from $2,200. Prices vary based on destination. It usually takes three to five days for packages to reach their final destination.

Jamaica Post does offer a cheaper tiered service called EMS, which takes around five to 10 days for package delivery. But this service has been suspended to the US since July, according to Jamaica Post’s website and feedback from users of the service.

The third, but slowest and cheapest option is airmail, but that service experienced severe delays in May. The Financial Gleaner understands that a backlog resulted in some packages being held at the Central Sorting Office in Kingston for over three weeks prior to shipment from Jamaica.

With the major delays experienced this year, said Walker, companies like his have few choice but to pay the larger little for the fast service so as not to lose clients.

“There were a few months where we had hundreds of delayed packages and had to do our best to make it up to our customers abroad,” he said.

Another trader, who identified himself only as Bob, says he uses Jamaica Post for just-in-time delivery of wooden pipes to reggae festivals around the world. He will now consider using other courier services, like DHL or FedEx, he says, as the Jamaica Post price hike was unreasonable.

“That price rise is not compatible with our country. You must not look abroad and implement the same prices here,” said Bob.

“A nearly 90 per cent jump overnight? My income could never jump by that much,” he said.

Most Jamaicans use the post for letters or for collecting inbound packages from platforms like eBay and Amazon. Some entrepreneurs use it as a delivery service to fill foreign orders usually made through online platforms.

Jamaica Post handled 86,000 units of regular packages in 2018, or 21 per cent higher year on year, according to the latest version of the Economic and Social Survey Jamaica (ESSJ) published by the Planning Institute of Jamaica. This includes inbound and outbound movements.

The total movement of rapid mail packages, including ZipMail, EMS and Fast Track, rose to 96,000 units, up two per cent year on year.

However, the Postal Service experienced a rapid 13 per cent decline in letters to 39 million units at the same time. Consequently, the Post and Telecommunication Department, which operates Jamaica Post, recorded a loss of $890 million in 2018. Expenses at $2.16 billion outpaced revenue of $1.27 billion, according to the ESSJ.

Jamaica Post did not respond to Financial Gleaner queries on the Fast Track fee increase, including whether there was a change in its partnership with DHL as its delivery provider for the service. Its updated Fast Track page shows the new rates but no longer shows the DHL logo.

Calls to DHL went to voicemail.

steven.jackson@gleanerjm.com