Delivery volumes are continuing to decline due to digitization, and competition is becoming more intense. The future development and profitability of our company depend to a large extent on the content of the new Postal Act and the universal service obligation. A universal service must maintain the margins required by normal business while also responding to changing times and customer needs.
The rapid growth of e-commerce is continuing and, as a result, logistics services related to e-commerce are seeing continued growth in spite of the challenging economic climate. Competition is very intense and this area will see new international partnership networks built in the coming years. Thanks to our strong market position in Finland and Russia, we are very well positioned to participate in globally strong networks.
In spite of the tight competitive situation, we also have many opportunities for profitable growth in other areas of logistics. Temperature-regulated transport, consumer goods logistics, services for the ageing population and other home services, large-scale warehouse outsourcing and the comprehensive management of customers’ logistics chains are examples of such opportunities.
While Russia can be seen as a challenge today, it also represents a long-term opportunity. A particularly promising area is e-commerce from China and other Asian countries to Russia. Finland as a country and Posti as a company are very well positioned to take advantage of the related growth opportunities in the logistics market. We already have interesting projects with major Asian e-commerce operators.
All of these changes will require major investments in the coming years, such as increased automation, particularly in sorting, as well as maintenance, basic renewal measures, new businesses, expanding current businesses and carrying out acquisitions.
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The impact of coronavirus (COVID-19) on Posti’s operations
Posti is prepared for different kinds of exceptional circumstances and has raised its level of preparedness because of the coronavirus pandemic. Posti acts according to the instructions provided by Finnish government officials (Finnish Institute for Health and Welfare THL and the Ministry of Social Affairs and Health) and protects the health of its personnel and customers in different countries according to these instructions.
Due to the nature of its business, Posti plays a major role in maintaining the security of supply in Finland. This means that socially critical basic functions are secured in case of severe disruptions or emergencies. Posti also has statutory obligations related to national exceptional circumstances. Pursuant to the Postal Act, Posti must be prepared for exceptional circumstances as well as disruptions in normal situations. This means, for example, that the delivery of mail must work even in the middle of a crisis.
As of today, the main impact of coronavirus on Posti’s operations has been the following: Due to the exceptionally large volume of parcels, Posti has increased its number of employees and deliveries as well as obtained new parcel handling facilities in order to be able to provide its services as normally as possible. Posti has also been forced to close some of its service points and mailboxes because the premises that they are located on are closed due to the coronavirus.
Despite border closures, goods are still moving into and out of Finland, but they are partly transported via exceptional routes and may subsequently be subject to delays.
Thanks to its contingency plan, Posti is well prepared for the exceptional circumstances. Posti’s multi-professional exceptional circumstances working group monitors the coronavirus situation daily. The task of the working group is to maintain Posti’s operations and customer service as well as actively report on the situation to the President and CEO as well as the Leadership Team.