Major Speeches, Presentations and Press Releases

LCQ4: Impacts of Hongkong Post's costs management measures on its staff members

     Following is a question by the Hon Leung Yiu-chung and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (April 22):


     According to the Report of the Working Group on Long-Term Fiscal Planning (Phase Two) recently released by the Treasury Branch under the Financial Services and the Treasury Bureau, in order to improve its financial performance, the Post Office Trading Fund (POTF) will continue to implement measures to generate revenue and manage costs. These measures include adjustment of the principal postage rates as well as automation and mechanisation of postal operations. The Working Group also recommends that POTF should explore outsourcing opportunities. Some non-civil service contract staff employed by Hongkong Post (HKP) have relayed to me that the outsourcing of services will definitely affect their job prospects. In this connection, will the Government inform this Council:

(1) of the respective numbers of staff members in various types of posts in HKP in each of the past five years; the total amount of expenditure on overtime pay incurred by HKP last year;

(2) how the current staff establishment in the mail processing centres compares with that before the introduction of the new mechanised letter sorting system in 2009; of the current numbers of staff members in various types of posts in the mail processing centres;

(3) of the implementation details of and timetable for HKP's plan to automate and mechanise its postal operations, the amount of expenditure that can be saved and the impacts of such plan on HKP's staff establishment; and

(4) whether HKP has plans to outsource its postal services at present; if so, of the details (including the impacts of outsourcing the services on the job prospects of the existing staff members in various types of posts)?



     The postal industry is by nature labour-intensive. Hongkong Post (HKP) would ensure that there is adequate manpower to meet service demand and maintain service standard. In order to provide postal service that offers good value-for-money, HKP also seeks to enhance its operational efficiency through automation and mechanisation of its operations, work process re-engineering, etc. As the mail volume fluctuates while HKP has to meet specified performance pledges, there is a practical need for HKP to engage a workforce comprising both civil service staff and non-civil service contract (NCSC) staff and arrange staff to work overtime in accordance with operational needs, in order to optimise the utilisation of resources and avoid idle manpower.

     Our replies to the questions are as follows:

(1) The numbers of civil servants and NCSC staff employed by HKP in the past five years are set out in the Annex.

     Overtime work of HKP staff is compensated by time-off in lieu or overtime allowance. In 2013-14, the total amount of overtime allowance incurred by HKP was $193 million.

(2) Mechanised letter sorting systems were originally housed in the International Mail Centre and the General Post Office Sorting Office. As at August 2009, before the upgrading of the systems, there were a total of 788 civil service posts and 763 NCSC staff positions in the two mail processing centres. In 2014, the two mail processing centres were amalgamated to become the Central Mail Centre. At present, there are 583 civil service posts and 601 NCSC staff positions in the Central Mail Centre. The reduction of the number of posts/positions reflects changes in the mail processing volume and the enhancement of operational efficiency brought about by the implementation of measures such as automation and mechanisation of operations, streamlining of workflow, re-engineering of work processes as well as merging of the two mail processing centres. The surplus manpower arising from the reduction of posts/positions was absorbed through natural wastage and internal redeployment.

(3) Major projects implemented by HKP to automate and mechanise operations in recent years include:

(a) EC-Ship Online Portal - Launched in September 2011, the portal facilitates senders to prepare the required posting documents, check posting records and pay postage online. It helps enhance the efficiency of counter operations and shorten the waiting time of customers;

(b) eDelivery System - Fully commissioned in November 2012, the system provides every delivery beat postman with a Personal Digital Assistant for recording delivery status, the delivery date and time of mail items in the course of delivery. The transmission of delivery data to the central system via the mobile wireless network streamlines the data collection process and enables timely updating of the delivery status of mail items on the mail tracking webpage and mobile app of the Department;

(c) Installation of two Optical Character Recognition and Video Coding Integrated Systems, one Stamp Cancelling Machine for processing large-size mail items and three Culler-Facer-Cancellers (CFC) - These new equipment are installed in the Central Mail Centre and have been in full operation since November 2014. In addition to the general functions of segregating mail items and cancelling stamps, the CFCs can perform preliminary sorting by reading the addresses on mail items using the Optical Character Recognition (OCR) technology, thus expediting the letter sorting process ;

(d) Integrated Postal Services System (IPSS) - By streamlining counter operations and integrating counter transactions and back-end workflow, IPSS facilitates resources planning and deployment, thus enhancing operational efficiency. HKP has been rolling out IPSS to all post offices and back-end offices since August 2014 with the target of completion by the end of 2015;

(e) Developing the capability of letter sorting machines to read Chinese addresses using OCR technology - The new function will help reduce the manpower required for manual mail sorting, which we estimate can be fully implemented in September 2016; and

(f) Mail Flow Management and Tracking System - In addition to improving the mail processing procedures and enhancing control of the mail flow, the system will facilitate the planning, deployment and management of resources by making available more information on the mail flow. System development is underway, and we estimate that the system can be fully commissioned by mid-2017.

     The net full-year realisable recurrent savings of the above projects is $7.2 million, with net savings of 13 civil service posts and 26 NCSC staff positions. The net full-year notional savings in staff costs is $19.2 million.

(4) HKP has all along adopted a prudent approach in the deployment of resources. In assessing the possibility of outsourcing, due consideration will be given to all relevant factors, including whether the work involved relates to the core postal business, the possible impact of outsourcing on service quality and staff, cost-effectiveness, etc. HKP does not have plans to further outsource its postal services at the present stage.

Ends/Wednesday, April 22, 2015
Issued at HKT 11:12

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