Itella Posti will launch a product-specific delivery experiment in six areas in the coming fall. During the experiment, products referred to in the Postal Act as universal service products, as well as newspapers and parcels, will be delivered five days a week, as is the current practice, whereas letters, advertisements and magazines sent by companies will not be delivered in the experiment areas on Tuesdays.
The experiment adheres to the Postal Act and Itella Posti's license to provide postal services. The experiment is based on the increase in electronic communications and the steep decline in the volume of mail, as well as on our customers' new needs.
The changes apply solely to the areas covered by the experiment and will have no effect on Itella Posti's other services. For mail recipients, the change is minor, given that a major part of the delivery service will remain unchanged.
Postal deliveries during the experiment:
Unchanged:
What are referred to as universal service products in the Postal Act will be delivered according to the current practice, on five days a week from Monday to Friday. These products consist chiefly of letters sent by small- and medium-sized companies and consumers, with the postage fee paid by stamps.
Unchanged:
Parcels and newspapers will be delivered on five to seven days a week, as per the current practice. Newspapers are delivered either in early-morning delivery or, in some areas, together with day mail.
Change:
Letters, advertisements and magazines sent by companies are delivered on four days a week, more specifically on Monday, Wednesday, Thursday and Friday. During the experiment, these items will not be delivered on Tuesdays.
The product-specific delivery experiment will be carried out between September 1-November 30, 2014, in Korso (Vantaa), Kivenlahti (Espoo), Porvoo, Riihimäki, Varkaus and Leppävirta. The areas were selected because they represent - in terms of their geography, conditions and delivery routes - the entire country as well as possible.
A goal of stable delivery costs
The reason behind the experiment is the steep decline in the volume of traditional mail. Demand for delivery services has changed more dramatically than ever before during the past four years, and the volume of mail is forecast to undergo a further decrease of several hundreds of millions of items in the fall. According to the forecasts, the volume of mail in Finland may decline by as much as 50% in comparison to the volume in 2013 by the end of this decade.
- The experiment set to take place in the fall is important, because the current delivery service of Posti is maintained by the proceeds obtained from mail sent by companies. Mail sent by consumers accounts for less than 5% of all sent mail. Although the volumes of mail continue to decline, delivery costs must be kept at the current level. This is why we want to solve the problem of how to secure a good level of postal deliveries together with our customers. The product-specific delivery days to be tested in the experiment represent a means to this end, says Senior Vice President of Itella Posti Jukka Rosenberg.
A survey aiming to gather feedback from mail recipients, companies that send mail and mail delivery personnel will also be conducted during the experiment. Information events will be held in the experiment areas in August prior to the start of the experiment, and contact with residents will be maintained throughout the experiment.
Itella Posti is also in the process of planning and studying the renewal of its mail sorting technology.
Facts
Itella's delivery obligations and the competitive situation
Itella is the sole operator subject to the universal service obligation defined in the Postal Act: Five-day delivery and picking for items and products paid for with cash. These consist mainly of dispatches from consumers paid by stamps. The obligation does not apply to letters, newspapers or magazines and advertisements sent by contract customers, i.e. corporations and companies.
Itella's license to provide postal services allows for the three-day delivery of addressed business letters. Its competitors' licenses allow for one-day delivery.
Competition is not restricted in unaddressed shipments (including advertisements and bulk mail), newspaper deliveries (including early-morning delivery) and in the delivery of magazines.
Competition is also free in the delivery of parcels (excluding universal service parcels, which fall under the universal service obligation).
In January-March 2014, volumes of postal items developed as follows compared with the corresponding period in the previous year:
Total volume of addressed letters: -10%
Unaddressed direct marketing: -23%
Newspapers: -8%
Magazines: -10%
Parcel services: +1%
Electronic letters: +3%