Post Office Network’s Future Depends On Finances

Recent reports have been made available regarding the country of Ireland and their post office network. Based on information from this report, it was determined that the post office must provide customers with more financial services. Under the recommendation of the Post Office Network Business Development Group, who completed the report, post office locations that do not obtain a lot of traffic should become hubs for business and social activities for the areas that they serve. The future lies in providing these new types of financial services. Here is a further look into what the Irish post office can expect.


Why adding financial services will benefit the post office

Bobby Kerr, who serves as Group Chairman made a recommendation that new services at post office locations should include the sale of motor tax discs, which is what Ireland uses for driving motor vehicles in public places. Currently there are two ways the Post Office Network makes most of their income. Revenue comes for a welfare contract with the Department of Social Protection, as well as a savings and financial services contract with the NTMA. It was determined that 48% of post offices in the country carry out only 12% of the Post Office Network’s business, which is why financial services should be implemented. The An Post, which is the postal service provider in the Republican Ireland, must take these numbers into consideration when reviewing and planning its five-year strategic plan. This plan will be worked out with The Irish Postmasters’ Union.


An Post to make changes

In the report by the Post Office Network, it was determined that An Post needs to develop their own portfolio of financial products and services for consumers. If they want to maintain market share, these financial products and services must maintain a greater influence than other third-party services. An Post doesn’t seem to be aware of the impending crisis that the Post Office Network might be facing, which is why it is imperative that An Post develop an independent working group as soon as possible. This group should work to review their five-year strategy, while offering improvements based on new financial services. It is possible that without reviewing their five-year strategy, some post offices will be forced to close.


Financial services not a new concept

It seems as though Ireland is following the lead of many other countries in the world, in regards to allowing their post offices to provide basic financial services and products. The United States Postal Service is becoming more innovative in their delivery services, as well as other services they might provide to customers in person. There are a number of post office locations in almost every town in the United States. If the United States Postal Service provided small loans, check cashing, bill pay, and the option to open a savings account, it could benefit the entire community. Not only would this provide residents of an area with an easy, one stop shop for mail and financial services, but it would also bring in more revenue for the postal service.


The United States Postal Service hopes to continue to meet the growing needs of the American economy and society. It seems as though this is exactly what they are trying to implement in Ireland as well, and hopefully both countries will benefit from new postal financial services.


Why the Descent in Oil is crumbling all Stocks

Most recently crude oil saw an increase of almost six percent after it dropped below $30 for each barrel within a day. The Energy Information Administration was able to confirm, after releasing a report that supplies had shown an increase over the prior week. For that reason, all gains in prices were erased within minutes. Through all the markets and this includes the stock market in the United States, the existing bear market in the crude oil stock is the longest it has been since the 1970s.

Capital Business

In the United States and around the world, oil drilling has been known as an intensively capital business. To run an oil well with only a limited lifetime, many companies have to spend a substantial amount of money to do so. For instances, shale oil wells might not be able to yield crude oil for a long period of time. For this reason, most companies have to issue huge amounts of stocks and incur more debt to be able to raise funds to operate the business.

Fear of Bankruptcy

At the existing price of crude oil, there are only a few wells that have seen a profit. However, most companies have to continue pumping oil in order to generate their own revenue. If not, the companies have to face the idea of liquidating their business. This aggravates the surplus in supply that increased substantially at record levels in the early part of 2015. Existing supplies have shown a heightened increase of 25% than was shown in prior years to 2015.  A report issued by Wolfe Research indicated that as the cost of an oil well broke even, it varied according to specific factors and is estimated to force producers of oil and gas to face the potential of bankruptcy by the middle of 2017, if the crude does not experience a fast increase to $50 or more. Yahoo Finance compiled data from over 500 oil and gas company and from the data, it was learned that only 5 companies were not involved in the bear market. This meant that their stock may have gone down 20% or more from their high. More than a third of these companies have experienced a reduction of 90% or more from their highs. This is a resulting indicator of possible bankruptcy issues in the future.

Getting Contagious

The oil and gas industry issues are creating difficulty for companies in the energy sector. It is evident when a company like Arch Coal had to file for bankruptcy protection because of its struggles with meeting their interest payments on more than $4.5 billion debt. This is as a result of spread of depressed oil prices in the credit markets. The Wall Street Journal confirmed that more than thirty companies in a broad sector of the industry have had to file for bankruptcy protection ever since the stock market reached its peak in 2015.

Without a rebound in crude oil, the credit markets will experience reduced stock prices. Unfortunately, if oil continues to crumble, the U.S. stock indexes will possibly enter the land of the bear market in 2016.