In Posti’s view, proposals by the Ministry of Transport and Communications on adjusting the universal service obligations and implementing a fixed-term State aid for newspaper delivery in 2022 will help to secure delivery in Finland despite the strong growth of digital communications.
Today, Posti gave its statement on the memorandum of the Ministry of Transport and Communications, in which the ministry proposes amendments to the current Postal Act.
“Posti supports the ministry’s proposal to reduce the delivery of the universal service to three days and implement a State aid for newspaper delivery. Updating postal regulation is urgent and necessary, because the number of mail delivered by Posti has dropped by over 60 percent in ten years, and the number is expected to halve over the next three years,” says Yrjö Eskola, SVP, Postal Services.
According to Eskola, adjusting the universal service obligations can cut down delivery costs, which supports the ministry’s and Posti’s aim of securing postal delivery and reasonably priced universal service across Finland, also in the future. The change will not affect the delivery speed of the universal service, which means, in practice, letters equipped with a stamp.
“Another reason for adjusting postal regulations is that Posti is expected to operate on the market terms, in free competition with and as efficiently as private delivery companies. The mail delivery market has been opened for competition, and the other 15 delivery companies operating in Finland can deliver mail without obligations regarding delivery days,” Eskola points out.
Posti operates entirely without public funding – unlike other Nordic and European postal services.
The ministry suggests both reducing the number of delivery days under the universal service to three and introducing a fixed-term communication subsidy in sparsely populated areas, covering the two weekdays when no other mail is delivered.
In Eskola’s view, Finland should apply the Norwegian State aid model that has yielded good results. In Norway, the aid covers the share that exceeds normal newspaper delivery costs for the days and the areas not covered by other delivery. Eskola thinks that an open tendering is the most cost-effective and transparent way to implement the subsidy. He says the publishers and subscribers should benefit from the State aid.
In Posti’s view, the delivery days under the universal service should not be tied to specific days of the week in the amended Postal Act, because the regulated universal service should not prevent Posti from implementing its other delivery services – which make up 97 percent of all items delivered by Posti – flexibly and in a customer-oriented manner. Of all items delivered by Posti, only three in a hundred are stamped letters covered by the universal service obligation. Households receive universal service letters fewer than once every two weeks, on average. However, due to the delivery State aid, the delivery days would be fixed in sparsely populated areas.
“Tying the universal service to fixed days of the week would also limit our opportunities to offer full-time work to our personnel and increase the share of part-time work considerably. I’m sure this is not the intended effect of the renewal. Posti wants to act responsibly towards its personnel, also in this change,” Eskola points out.
The amendments to the Postal Act are based on the policies drawn up last year by the cross-ministerial working group led by State Secretary Olli Koski.