Chunghwa Post is considering canceling its low-temperature delivery service because of its continuing financial losses.
The postal service’s financial situation was under scrutiny at the legislature’s Transportation Committee yesterday as lawmakers prepared to review the postal company’s budget for the next fiscal year.
Democratic Progressive Party Legislator Tsai Chi-chang (蔡其昌) said Chunghwa Post has been offering low-temperature delivery service since 2004. While the service generated NT$3.2 million (US$110,120) in revenue last year, its operational costs topped NT$61 million.
Saying that last year was not the only time that the company suffered financial losses, Tsai added the revenue during the first year of the service was around NT$5 million.
While revenue hit NT$11 million at one point, it plummeted to around NT$6 million in 2009.
Tsai asked Chunghwa Post chairman Oliver Yu (游芳來) why the company continued to do poorly with the low-temperature service, given the logistics and distribution service market has business opportunities worth NT$50 billion. Tsai also asked Yu if the company should continue offering the service.
“This [the service] has become our burden,” Yu said, adding that the company would decide within three months whether to continue the service.
Minister of Transportation and Communications Mao Chi-kuo (毛治國) said he had not been aware of the low-temperature service and would have to evaluate its viability.
Several lawmakers also raised questions about the company’s life insurance losses.
According to Yu, many life insurance firms have found it difficult to maintain operations because the widening loss from interest rate differences.
Chunghwa Post’s life insurance business had also invested overseas, which caused losses as well because of exchange rate fluctuations, he said.