Between FY21 and FY25, expenditure totalled Tk5,018 crore against revenue of Tk1,452 crore, leaving a cumulative gap of Tk3,566 crore.
Infographic: TBS
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Infographic: TBS
With nearly 40,000 employees, 9,848 post offices and around 439 acres of land, the Directorate of Posts operates one of the country’s largest public service networks. Yet its extensive infrastructure generates little revenue compared with its operating costs.
The government spent Tk1,039 crore on the postal department in FY25, against revenue of around Tk252 crore, according to departmental data.
Between FY21 and FY25, expenditure totalled Tk5,018 crore against revenue of Tk1,452 crore, leaving a cumulative gap of Tk3,566 crore.
Facing declining traditional postal business and growing competition from private couriers, the directorate is trying to transform its underutilised network into a logistics and e-commerce distribution platform, with a franchise model at the centre of its strategy.
Under the initiative, private entrepreneurs will operate postal outlets using the department’s network and logistics infrastructure, aiming to boost revenue, revive inactive branches and create jobs.
“We are introducing the franchise model to make the directorate more dynamic and create employment. As parcel movement increases, post offices will earn more, gradually reducing the government’s subsidy,” Kazi Asadul Islam, director general of the directorate, told TBS.
Franchise model targets 5,000 outlets
The initiative, part of the government’s election manifesto and 180-day action plan, began in July with eight outlets, four in Dhaka and four outside the capital.
Private entrepreneurs will handle postal items, parcel booking, e-commerce product collection, processing and customer service, while investing in and managing front-end operations. The directorate will provide access to its network and logistics support.
The department plans to expand the number of franchise outlets to more than 5,000 over the next five years. The outlets could become parcel collection points, e-commerce fulfilment hubs, payment centres and local delivery stations, reducing the government’s need to finance every outlet directly.
“The franchise post offices will increase our work rather than reduce it. Existing officials will also be involved, alongside permanent staff, contract-based delivery personnel and outsourced workers,” Asadul said.
He said the current staff of the directorate will remain employed after franchising.
Many rural branches already rely on part-time or contractual employees, known as extra-departmental (ED) staff, while permanent employees mainly work at headquarters, circle offices and larger post offices.
Idle infrastructure, shrinking traditional business
The need for reform is evident in rural areas. At Dulahart Post Office in Charfesson, Bhola, a rusted post box stands outside a weathered building.
Rafiqul Islam, a postman who has worked there for 24 years, said the office receives only 10-15 letters a day, mostly legal notices from banks, NGOs and other organisations. The building has four rooms, but only one is in use.
Thousands of branch and sub-post offices face similar problems, with buildings, land and staff but limited postal activity.
Meanwhile, private courier and logistics companies have expanded alongside e-commerce, capturing a market estimated at around Tk8,000 crore, compared with the directorate’s annual revenue of about Tk252 crore.
The department’s revenue includes fees related to savings certificates, government stamps and official correspondence, in addition to commercial postal services.
Speed Post, e-commerce offer new opportunities
The directorate is also seeking to revive its parcel business through Speed Post, launched in 2018 but held back by logistical and technological limitations.
The relaunched service promises delivery within 24 hours in Dhaka and 48 hours to district towns.
According to the department, it transported around 850 tonnes of goods over the past eight months, with small businesses and e-commerce entrepreneurs increasingly using the service.
“We are working to make Speed Post popular again after logistical and technological limitations prevented it from reaching its potential,” Asadul said.
The department processes around five crore postal items annually through nearly 18,000 counters, he said.
Over the past two fiscal years, it delivered around 5.6 million passports, 700,000 mouza maps and khatians, and 1.5 million telephone bills. It has also delivered more than one million driving licences and over 70 million smart cards to date.
Almost all domestic postal operations are now covered by its delivery management system software, according to the director general.
Outbound international mail reached 316 tonnes in the first three months of FY27, up 30.04% from 243 tonnes a year earlier.
“Personal and family letters have declined, while commercial letters have increased. We are improving service quality, and letters can now be tracked,” he said.
Money-order transactions have also fallen as customers increasingly use mobile financial services such as bKash and Nagad and bank transfers. Partnerships with e-commerce companies, including Daraz, have started bringing parcel business to some post offices.
However, officials said these new revenue streams remain insufficient to fully utilise the network. Some low-traffic sub-post offices operate intermittently because of limited workloads.
Technology push, but financial constraints persist
To support the transition, the directorate is investing in transport, digital infrastructure and delivery technology. Vehicle tracking has been introduced for mail vans and electric motorcycles.
In FY26, the department distributed 500 desktop computers, 500 UPS units, 10 laptops and 6,000 Android phones to field offices, Asadul said. It also added 43 delivery vans and 80 electric bikes received from the Universal Postal Union, built 33 district post offices and renovated 100 upazila post offices.
Further plans include e-commerce logistics, cold-chain facilities, parcel tracking, faster home delivery, automation and artificial intelligence. The department also aims to introduce digital addressing, online postal insurance and savings services, bill payments and government information services.
It hopes to help rural entrepreneurs market products such as mangoes, jamdani and handicrafts in urban and overseas markets.
But financial constraints remain substantial. Salaries and pensions accounted for Tk814 crore, or around 78% of the department’s Tk1,039 crore expenditure in FY25, leaving limited funds for modernisation and commercial expansion.
Public investment has included a Tk92 crore headquarters building inaugurated in Agargaon in 2021 and a Tk376.73 crore project approved in 2019 to construct residential buildings for postal employees in Dhaka.
Despite such spending, critics argue that the department has been slow to modernise its core services and compete with private operators.
Asadul Islam said the directorate should not be judged solely by its commercial performance because its public service responsibilities differ from those of private couriers.
“The government has retained this department to provide services to people, not to generate profit,” he said, adding that private couriers can adjust prices to maximise profits, while postal charges require government approval.
“Even a 10-paisa increase in a postal charge requires approval up to the prime minister. Service remains our primary objective,” he said.
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