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 2022

The war started by Russia against Ukraine is negatively impacting the economic growth and affecting Finland's economy through both demand and supply. The uncertainty caused by the war is weakening domestic demand in Posti’s home markets, and it has also reduced and slowed down the growth of export markets. The general economic situation has weakened throughout the year as growth has slowed down due to increased uncertainty, energy crisis, accelerated inflation and rising market interest rates. It is difficult to fully estimate all the economic consequences of the war, but due to continuing energy crisis and rapidly increasing living costs, the economy is heading towards a mild recession.

While improved employment and wages have led to an increase in household income, the rapid inflation has eaten up the growth of purchasing power. Amid uncertainty, consumer confidence has fallen to a record-low level. Consumer confidence has been reflected clearly in consumption, and the retail industry's sales volume has decreased throughout the year, which also weakened the circulation of goods in Posti warehouses and affected Posti's parcel volumes negatively. In an uncertain situation and with rising costs, the rapid growth of parcel volumes accelerated by the coronavirus have leveled off, but according to forecasts, e-commerce is expected to grow in the future as consumer buying habits change and online delivery services improve and gain widespread adoption.

Logistics is a supporting industry for trade and industry sectors, so the current economic situation and the development of these industries have a direct impact on Posti's business operations and performance. The Bank of Finland forecasts that Finland's GDP will have grown by 1.9 percent in 2022, but the growth rate is expected to be negative 0,5% in 2023 and gain speed again in 2024 by growing 1.1% and 1.5% in 2025. Riksbank forecasts that Sweden's GDP will have grown by 2.7% in 2022, and the growth in 2023 is expected to be negative 1.2%.