Operating environment

Digitalization and the change in people’s behavior have significantly reduced the number of paper mail items. The number of addressed letters delivered by Posti has decreased by 60 percent within the last ten years, and the households receive a stamped letter only every third week on average. Competition in mail delivery is increasing. In addition to Posti, there are currently 17 operators delivering mail in Finland. The COVID-19 pandemic has sped up the change in the postal business, and the postal service volume decline is expected to continue over the coming years. The decline is accelerated partly by the actions of the public sector and the state to reduce paper mail.

Posti operates on market terms and entirely without public funding. As stated in the Postal Act, Posti is responsible for the universal service delivery that covers letters and postcards paid with postage stamps. The share of mail items covered by the universal service obligation accounts for only around three percent of all mail items delivered by Posti. The majority, around 97 percent, of Posti’s services is fully commercial and offered in a competitive market.

Market situation and business environment, January–December 2021

The COVID-19 pandemic continued to cause some uncertainty on the overall situation and on the effects of possible new variants. The global demand for goods and services varied considerably during 2021 following the changes in the pandemic situation. The rapid changes strained the supply chains, and this has also had an effect on Posti’s operations. In general, statistics indicate growth in retail which is visible in the increase of Posti’s freight and logistics volumes.

The growth of eCommerce in Finland and Sweden continued during the second year of COVID-19 but the growth slowed down and approached the pre-pandemic levels in 2021. The e-retailers were affected by the shortage of goods caused by supply chain challenges. With the vaccinations and the opening up of the society, consumers have started to shift their consumption also to services instead of goods. According to a study conducted by Posti in cooperation with Kantar TNS, customers have grown used to the convenience of online shopping during the pandemic, and over 30% enjoy eCommerce as much as shopping at brick-and-mortar stores. Almost 30% of Finns shopped online on a weekly basis, and the importance of the delivery experience further increased during 2021. In Finland, parcel lockers are the most preferred method for receiving parcels, but the popularity of home deliveries has increased. Posti develops its delivery network and services to respond to the changing customer preferences.

Due to the nature and scale of Posti’s operations, the changes in the GDP and the development of economy it portrays have an impact on Posti’s business. The Bank of Finland forecasts that the Finnish GDP grew by 3.5% in 2021, but the growth rate is predicted to drop to 2.6% in 2022 and then to 1.5% and 1.3% in the following years. Riksbank forecasts that the GDP in Sweden grew by 4.7% in 2021 and that the growth rate is forecasted to drop to 3.8% in 2022.