Posti’s opinion is that the actions proposed by the state secretaries’ working group to safeguard the delivery of mail and publications should be taken as quickly as possible. According to Posti’s Senior Vice President Yrjö Eskola, the coronavirus crisis has been speeding up digitalization and reducing the volume of printed mail more rapidly than expected.
Today, the ministries’ joint working group published its report on how the delivery of mail and newspapers can be safeguarded in Finland in the coming years. The working group proposes relaxing the regulations concerning the number of delivery days and introducing a communications subsidy to guarantee the delivery of newspapers in sparsely populated areas.
Posti’s Senior Vice President, Postal Services, Yrjö Eskola thanks the working group led by State Secretary Olli Koski for its thorough and comprehensive preparation, which also included consulting Posti and other actors in the sector.
“The working group’s proposals to safeguard postal operations are necessary and something that we can support as communications have been shifting to electronic channels at an even faster rate during the coronavirus crisis. The volume of letter items fell by a record 24% in the spring when compared to the corresponding period in 2019. Due to digitalization, the regulations concerning the number of delivery days in the universal service must be relaxed quickly. This has already been done in the other Nordic countries or, if not, there are plans to quickly relax regulations in order to safeguard postal operations,” says Eskola.
The volume of letters has already fallen by more than 60%, there are not enough postal items for five-day delivery
Eskola calculates that, over the past two decades, the volume of letters has fallen by more than 60% due to digital communications. Due to this rapid fall, there is no customer need for five-day delivery in universal service and such a service is also not profitable.
“It is very important that the Postal Act keeps up with the times and reflects the needs of customers. Our sending customers expect cost-effective delivery. Posti is one of the biggest private sector employers in Finland, and it is very important to us that the working group’s proposals are implemented in a controlled and responsible manner also from the perspective of personnel,” says Eskola.
Due to the steep fall in the volume of items and the financial impact of the coronavirus pandemic, Posti has had to adjust its operations and increase efficiency. Posti has reduced the delivery of printed mail on Fridays in the summer because there have not been enough items for Friday delivery. The special arrangement will continue until the end of October. Posti has also temporarily laid off some of its production and administration personnel.
By reducing the number of delivery days and making delivery more efficient, Posti is able to significantly reduce its environmental impact. Under the current delivery model, cars are driven about 1.4 million kilometers a week in Posti’s daytime delivery. Under a three-day delivery model, the number of kilometers covered would fall to less than 1 million kilometers, which would reduce CO2 emissions by up to 30%.
The delivery cost of newspapers is increased by the falling number of letters in the deliverer’s bag
Eskola thinks that it is very important to support the delivery of five-day printed newspapers in rural areas with a temporary state subsidy while the universal service’s delivery obligation is changed to a three-day delivery obligation. According to Eskola, a communications subsidy would make it possible to preserve diverse communications also in rural areas.
“Right now, Finland is one of the only countries in Europe that does not subsidize the delivery of letters or newspapers. The EU allows its Member States to take action to improve the financial sustainability of newspapers. In Finland, newspaper delivery was subsidized up until 1995.”
According to Eskola, a challenge that newspapers face especially in rural areas is the number of letters in the deliverer’s bag falling rapidly, which means that newspapers end up footing the bill for delivery. The route must be taken in its entirety and the same kilometers must be covered even though the bag is less full. This increases the unit costs of the newspapers being delivered.
“The fall in letter volumes, which has become more rapid during the coronavirus crisis, has already increased delivery-related cost pressures. The change coming into effect in 2022 is still very far away and we need solutions earlier than that,” says Eskola.
Delivery to centralized mailboxes in apartment buildings is common practice abroad
The working group also wants to look into shifting to delivering mail to centralized mailboxes in apartment buildings. The use of these mailboxes is common practice in other parts of the world. Until now, Finland has been one of the few places in the world where mail is still delivered into apartment-specific mail slots.
Eskola hopes that the proposal will be quickly acted on in cooperation with various actors.
Making data available is problematic for information security and fair competition
Eskola supports the development of regional and local delivery cooperation on a commercial basis. However, he finds the proposals to make Posti’s network or delivery data available to competitors very problematic.
“We need to be very careful to protect customers’ privacy and ensure information security and fair competition. Parcel delivery, e-commerce and logistics services are very international industries where competition is free. This means that one Finnish company must not be more heavily regulated or have more obligations to disclose data than others in the industry. The upcoming changes to the legislation must be prepared carefully and the impact of the changes must be thoroughly assessed.”