appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Matthew Cheng

On a recent weekday morning, the Repulse Bay post office, in one of Hong Kong’s most affluent coastal neighbourhoods, stood almost empty. In an hour, only five customers walked through the door, with two staff members serving them.
One of them was Dicky Lo, who had sent a parcel to Europe, citing the service’s reasonable price compared with private couriers.
“I come here two to three times a month, mostly to collect online shopping packages,” the 43-year-old freelancer said. “Not many residents use this branch, which is exactly why I like it because there is no queue.”
The Repulse Bay resident said that closing the post office would cause inconvenience and force him to travel 7km to Aberdeen for postal services.
“Post offices are still necessary. Besides sending parcels, residents can pay electricity, water, and tax bills here … They are different from private courier services,” Lo said.
“Not every government service is profit-making, as they have to satisfy residents’ needs. We cannot judge them merely by profit and loss.”
The Repulse Bay branch was one of five post offices that recorded a productivity index – a metric measuring mail volume and manpower utilisation at individual sites – below 50 per cent.

The quiet counters reflected a broader picture of the financially strapped Hongkong Post, which reported a record deficit of HK$821 million (US$105.3 million) in 2024-25.
A self-financing government department since 1995, Hongkong Post has recorded deficits for eight consecutive years, in stark contrast to its peak profit of HK$1.23 billion in 1997-98.
In an unprecedented cost-saving measure, it said on Tuesday that it would stop giving permanent civil service positions to new employees, instead offering them two-year contracts. The move sparked a backlash within the public service.
The decision followed the Legislative Council approving a rescue plan to inject HK$4.6 billion in funding to support Hongkong Post’s operations for the next three years, while the government has pledged to put forward a reform road map by 2028.
Observers have also called for a review of its post office network as a band-aid measure, with the latest figures obtained by the South China Morning Post revealing that 98 per cent of post offices were loss-making.




Two profitable post offices
In 2024-25, the city’s post offices generated HK$277 million in revenue and incurred HK$522 million in expenditure, resulting in a loss of HK$245 million. The loss was 8 per cent higher than in 2020-21.
The number of loss-making post offices rose to 120, or 98 per cent of all branches, up from 118, or 95 per cent, five years earlier, and significantly higher than 103, or 81 per cent, a decade ago. Only two post offices made a profit in 2024-25, down from six in 2020-21 and 24 in 2014-15. Hongkong Post declined to disclose which two branches were profitable.
Larger losses have also become more common. In 2020-21, five branches incurred losses of HK$3 million to HK$4 million each, and six lost more than HK$4 million each. By 2024-25, the numbers climbed to 13 and eight, respectively.
The rapid expansion of the e-commerce market, the rise of private delivery firms and a decline in traditional mail have dragged Hongkong Post into a financial quagmire. It handled 611 million mail items in 2024-25, a 38 per cent fall from 978 million in 2020-21.
Five branches recorded a productivity index below 50 per cent in 2024-25, while another 33 fell into the 50-70 per cent range, up from three and 26 respectively five years earlier.
Besides Repulse Bay, the branches with the lowest productivity indexes were on The Peak and in Tai O, and two mobile post offices serving remote rural areas.

A Hongkong Post spokesman said the financial performance of individual post offices depended on factors such as customer traffic, mail types, posted volumes and rental expenses, and did not reflect the department’s overall operations.
He emphasised that the department’s primary duty was to establish a convenient postal network for the public rather than to generate profits.
Post offices’ productivity indexes, the spokesman said, mainly depended on mail volume. He noted that productivity had been heavily affected by the development of e-commerce, which had led to a shrinking overall postal business and mail volume.
“While efforts were made to reduce operating expenses, due to various external factors such as charges by third parties, the rate of cost reduction was less than that of revenue,” the spokesman said.
“This has resulted in an increasing burden on Hongkong Post to cover the necessary costs of providing public postal services, and a higher proportion of post offices having losses and lower productivity indexes.”
Former postmaster general Tam Wing-pong said a post office network with wide coverage used to be an advantage because it was convenient for the public and helped collect more mail.
He conceded, however, that the decline in traditional postal services had hit both customer traffic and the finances of individual branches.
“The amount of domestic mail is not large, as people do not mail a lot these days, and this is what it is,” Tam said.
He also highlighted intense competition from private couriers, which operate on a large, global scale to drive down delivery costs and improve cost-effectiveness, making it difficult for Hongkong Post to compete.


Hong Kong Postal Workers Union chairman Cheung Wai-kuen acknowledged the effect of a drop in mail volume, describing a 50 per cent productivity index as the “bottom line”.
“Any normal business should record a productivity index of above 50 per cent,” he added.
Cheung attributed the heavy losses to high rental costs, especially for offices in properties managed by Link Reit, which controls many shopping centres in public housing estates.
“Some post offices have to pay more than HK$300,000 in rent [a month] to Link Reit,” Cheung noted.
“That is why many post offices located in Link Reit properties have moved out, as rents in the private market may be cheaper.”

In 2023-24, the department spent HK$92 million renting 63 premises from private property owners, an average of HK$1.46 million per site. It sought to reduce its rental expenditure to HK$83 million in 2024-25 and HK$79 million in 2025-26, bringing the average cost down to HK$1.34 million and HK$1.3 million, respectively.
Despite Hongkong Post’s efforts to control rental costs, the situation has not been reversed.
Calls for network review
Economist Simon Lee Siu-po urged Hongkong Post to review its network and consider closing some branches, arguing that it was unreasonable to use public money to subsidise services for a small number of residents.
“Some post offices incurred a loss of over HK$5 million a year, which is quite serious,” Lee said.
“[Their closure] may not affect many residents … But using public money to subsidise services for them can be costly.”
Tam, who headed Hongkong Post from 2006 to 2008, agreed that the network needed to be reviewed.
“If you only talk about business, of course, some post offices can be closed,” Tam said. “I closed four during my tenure because they had almost no customers. Why keep them open?”
At the same time, Tam stressed that Hongkong Post faced a dilemma in balancing the public interest with financial sustainability, because it was obliged to provide a universal postal service.
Tam suggested that the government rethink its overall logistics policy and the necessity of maintaining such a comprehensive postal network.
“It is also possible to retain only one post office per district,” he added.
Hongkong Post said it had been reviewing its network. Over the past five years, two branches had been closed – one in Cyberport and one on Granville Road in Tsim Sha Tsui.

Cheung proposed adjusting post offices’ opening hours to cover the evening peak.
While most post offices currently close by 5.30pm on weekdays and open for a half-day on Saturdays, he suggested adopting a five-day working week, opening later and extending evening hours.
“Our union conducted a review and found that there were very few customers between 9am and 10am in most post offices,” Cheung said.
“The peak period is mostly from 5.30pm to 7.30pm … the self-collection points see long queues.”
He said the change could reduce administrative expenses and allow branches to handle more items, such as parcels from online retail platforms like Pinduoduo.
“If an office handles an extra 200 to 300 items a day, say each generates HK$10 of profit, it means an additional HK$3,000 in revenue … it is about HK$60,000 a month,” he added.




Deeper structural problems
A more fundamental cause of Hongkong Post’s financial burden could lie in its staff costs.
In 2024-25, staff costs stood at HK$2.1 billion, down slightly from HK$2.3 billion in 2020-21. However, the share of staff costs in total operating costs rose from 45 per cent to 62.5 per cent.
The staffing establishment for postman, postal officer and controller of posts grades fell 6 per cent from 4,212 in 2023-24 to 3,956 in 2026-27, while actual strength declined by 9 per cent from 4,027 to 3,683.
Despite this, the government continued to recruit, appointing 170 new staff members to the three grades since 2023-24.
To control staff costs, Hongkong Post announced that all employees who completed their probation in or after September would be offered two-year contracts rather than permanent positions. During the contract period, the employees would still be regarded as civil servants and remain entitled to civil service welfare benefits.
Postmaster General Leonia Tai Shuk-yiu said the department could no longer afford to offer permanent contracts, adding the department would also review whether the frequency of mail deliveries – daily from Monday to Friday – remained necessary.
Union leader Cheung argued that employees had a reasonable expectation of being offered permanent contracts after completing probation, unless they had underperformed during that period.
He also questioned the effectiveness of the measure in reducing staff costs, noting that employees would continue to receive the same pay.
The move may signal the department’s push to shift from a civil service establishment towards a contract-based system.
Tam acknowledged that the civil service establishment had led to a persistent rise in staff costs because of annual salary adjustments, posing a long-term financial burden.
Junior and middle-ranking civil servants had received a cumulative pay rise of 10 per cent over the past five years, on top of salary increments they received as they gained seniority.
The inability to estimate and manage staff costs made long-term financial planning extremely difficult, Tam said.
However, he said the latest move merely put off the issue and questioned whether it could address the root of the problem.
“It can stop recruiting new civil servants, and replace them gradually with contract staff, this will offer certainty in estimating staff costs,” he said.

Lee, the economist, supported the idea and proposed decoupling postal staff from the civil service. He said the financial pressure could only be eased when the department reduced staff costs, which accounted for most operating costs and losses.
“If this continues to drag on for years, staff costs will only keep rising,” Lee said. “Civil servants rarely leave their posts, and the longer they serve, the greater their benefits, medical coverage and pensions become. This is a major problem.”
Is splitting services the way forward?
The struggles of public postal services have been a global issue. Some countries have responded by separating public services from their more profitable delivery operations.
One example is the United Kingdom, which split off the Post Office, which operated an extensive network of branches for public services, from Royal Mail, its delivery arm, in 2012.
The move paved the way for the privatisation of Royal Mail, which faced increasing competition from courier companies and a subdued outlook as letter volumes declined. Post offices continue to offer a range of Royal Mail services.
However, Royal Mail is still losing ground in the parcels market. Its market share dropped from 45 per cent in 2015 to 35 per cent in 2024.
Tam, the former head, suggested that Hongkong Post consider placing loss-making public services under government management, while allowing the more profitable parts of the business greater flexibility.
Lawmaker Lam Wai-kong supported separating public services from other operations.
He said the government could continue to provide public services without requiring them to make a profit, while the more commercial side could operate under different models, such as a public-private partnership. He cautioned, however, against full privatisation, which could significantly affect both services and staff.
Cheung described the idea as a “win-win”. He pointed to Hongkong Post’s high competitiveness in logistics and courier services, particularly Speedpost, which generated a profit.
“These services can run under the Post Office Trading Fund and compete with the private market,” he said, referring to the financial framework operating since 1995 to allow Hongkong Post to operate as a commercial enterprise using its own revenues.
“Services that cannot generate a profit should be supported by the government … Public services including mail distribution and counter services will come under the government, which will already help balance the books.”
He said Hongkong Post had separate divisions for mail distribution, mail processing, retail, and e-commerce, and believed that separating the businesses and the workforces would be straightforward and would not require restructuring.
The effectiveness of such a proposal, however, remains uncertain, as the department’s e-commerce revenue fell by 40 per cent, from HK$1.01 billion in 2023-24 to HK$590 million in 2025-26, amid escalating geopolitical tensions and intensified competition.
E-commerce revenue is projected to rebound to HK$730 million this year and rise further to HK$987 million by 2029–30.
Tai, the postmaster general, said the department would consider all options before deciding on the operating model that suited it best, including turning it into a government-funded service, creating a joint venture with the private sector or privatising it.
Having served with Hongkong Post for four decades, Cheung has witnessed the changes in the city’s postal service first-hand.
“In the past, when we went out to deliver mail, we had to carry three bags. Now we only carry one,” he said. “Back then it was mostly letters, which were quite heavy; nowadays it is mainly small parcels.”
Despite the financial challenges, Cheung was convinced that Hongkong Post retained a core value that could not be replaced by private couriers: the provision of reliable universal postal services.
“Even if we have to climb six floors of a walk-up building to deliver a letter, we still do it, without charging any extra service fee. This is exactly the value of universal postal service.”


Gold rebounds after Fed rate rise as banks back long-term demand outlook

Hong Kong’s 5-year plan, policy continuity offer investors more stability, experts say

Hong Kong targets gold trading, FPS-UnionPay link to boost yuan use

Hong Kong aims to raise innovation spending to 3% of GDP by about 2030

Hong Kong economy

Does cash-strapped Hongkong Post need to deliver profits or just public services?

Illustration: Henry Wong

Repulse Bay Post Office serves people in an affluent part of Hong Kong. Photo: Handout

The Peak Post Office is among branches with the lowest productivity indexes. Photo: Handout

Tai O Post Office has a low productivity index. Photo: Handout

Overall postal business and mail volumes are shrinking in Hong Kong. Photo: May Tse

Fewer people are using post offices in Hong Kong. Photo: Jelly Tse

The rapid expansion of the e-commerce market, the rise of private delivery firms and a decline in traditional mail have dragged Hongkong Post into a financial quagmire. Photo: Jelly Tse

The General Post Office, the headquarters of Hongkong Post, in Central. Photo: Jelly Tse

Hongkong Post scraps permanent contracts for new staff amid financial strain

The abrupt move by Hongkong Post has sparked concerns among civil servants. Photo: Jelly Tse. Photo: Jelly Tse

A decline in mail volume has prompted Hongkong Post to review staffing, delivery frequency and its network of post offices. Photo: Jelly Tse

Customers at the General Post Office in Central on Tuesday. Photo: Jelly Tse

Hong Kong to keep ‘open mind’ on options for struggling postal service

 Hong Kong Post’s HK$821 million loss in 2024-25 was its biggest since 1995. Photo Jelly Tse

The Post Office at Windsor House in Causeway Bay. Photo: Jonathan Wong

Can Hongkong Post be saved or should it become a taxpayer-funded public service?

The General Post Office in Central. Hongkong Post faces mounting losses as calls grow to end its self-financing model. Photo: Nora Tam

The post office branch at Windsor House in Causeway Bay. The postal services operator plans to introduce revenue-generating and cost-saving measures as it struggles with a persistent deficit. Photo: Jonathan Wong

Death of Hongkong Post? Mounting losses, dwindling demand cast shadow over service

The post office in Causeway Bay. Over the past eight financial years, the self-financed government department has racked up HK$2.9 billion in losses. Photo: Jonathan Wong

The King’s Road Post Office in Fortress Hill on Thursday. The volume of mail processed by Hongkong Post has plummeted from more than 1.1 billion items in 2019-20 to 611 million in 2024-25. Photo: Leopold Chen

News

Hong Kong

Society

After eight consecutive years of deficits and with few branches turning a profit, what is next for Hongkong Post?


.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}After eight consecutive years of deficits and with few branches turning a profit, what is next for Hongkong Post?

After eight consecutive years of deficits and with few branches turning a profit, what is next for Hongkong Post?