Posti has, for the first time, carried out a competitive tendering process required by the Postal Act for the procurement of five-day delivery for universal service letters in areas without early-morning newspaper delivery. 33 companies, including Posti itself, submitted tenders as part of the competitive tendering process. The companies that won the competitive tendering process have carried out deliveries for Posti before.
Posti has completed the competitive tendering process required by the Postal Act for the procurement of five-day delivery for universal service letters in areas without early-morning newspaper delivery. The competitive tendering process began in January. 326 companies signed up for the competitive tendering, all of which were invited to take part in the competitive tendering through the Posti Sourcing Portal.
The areas subject to competitive tendering were determined based on the areas specified by the Finnish Communications Regulatory Authority. The competitive tendering process covered 1,689 areas. Companies other than Posti submitted tenders for a total of 133 areas, while Posti submitted tenders for all areas.
33 companies submitted tenders as part of the competitive tendering process. Of the companies that signed up, 293 did not submit a tender.
The competitive tendering process was carried out area by area in accordance with the Postal Act and the Public Procurement Act for Special Sectors and under the supervision of the Finnish Communications Regulatory Authority. An independent outside expert on public procurement confirmed that the process adhered to the principles of transparency and non-discrimination. All participants in the competitive tendering process, including Posti, were subject to the same requirements and selection criteria. Posti’s Sourcing compared the tenders and chose the cheapest supplier that also met the other competitive tendering criteria separately for each area.
The lowest tenders for areas were submitted by three companies in addition to Posti. One of the tenders submitted by these companies turned out to be incorrect. Posti has pre-existing service agreements with the companies that won the competitive tendering process, according to which the companies deliver other postal items in addition to universal service letters in the areas. These agreements will continue to apply after the competitive tendering process. The competitive tendering process requires no action on the part of mail senders or mail recipients. It will also not affect other Posti services.
Kaj Kulp, the Vice President responsible for competitive tendering, says that one of the main aims of the Postal Act reformed last year was to ensure the five-day delivery of universal service products as well as newspaper delivery in sparsely populated areas.
“This aim set by the Postal Act has been achieved. The delivery of newspapers in sparsely populated areas will continue as usual according to the agreements, which is very important for newspaper companies.”
Posti outsources delivery services to over 600 companies
Kulp thinks the number of companies that participated in the competitive tendering process was small. Kulp himself believes that the aim of creating new cost-effective delivery operations for sparsely populated areas is best achieved by outsourcing normal mail delivery.
“The most important thing is to build cooperation and create new delivery models with local companies. The most flexible way to do this is to enter into subcontracting agreements directly with the companies. At the moment, Posti employs over 420 subcontractors in basic and early-morning delivery, and we also employ hundreds of other companies and entrepreneurs in transport services. Last year, Posti’s outsourcing volume was approximately EUR 200 million,” says Kulp.
According to Kulp, the competitive tendering process showed that, right now, Posti’s operating model is the most functional and cost-effective option for organizing comprehensive delivery. Posti always uses subcontractors extensively if it makes sense from a business perspective and is otherwise possible. Posti also develops subcontracting concepts as well as combinations of delivery and transport services from a business perspective based on customers’ wishes.
Posti’s Sourcing plans to further develop the electronic competitive tendering process based on the lessons and experiences that were gained.