Posti supports reducing the universal service delivery days to three days a week and subsidizing newspaper delivery in sparsely populated areas. In Posti’s opinion, the stricter regulations proposed for the Postal Act do not take into account the fact that the volume of printed mail is falling sharply, and the state is speeding up its digitalization process.
Posti has given its own statement on the government draft proposal on the amendment of the Postal Act by the Ministry of Transport and Communications and the government draft decree on subsidizing newspaper delivery in sparsely populated areas.
“Posti supports reducing the universal service letter delivery days to three days a week and subsidizing newspaper delivery in sparsely populated areas with a fixed-term government grant. Both measures are urgent and essential in securing delivery to customers in the next few years as the volume of printed mail continues to fall sharply. As a result of rapid digitalization, the volume of letters delivered by Posti has fallen by nearly 70% in the 2000s. There are simply not enough letters to make delivering five days a week profitable,” says Yrjö Eskola, Posti’s Senior Vice President, Postal Services.
“The amendment of the Postal Act is also a climate decision. Reducing delivery days and making delivery more efficient also allows us to significantly lower carbon-dioxide emissions from delivery.”
The amendment of the Postal Act will not reduce the delivery speed of letters with stamps
The government draft proposal proposes that the number of pickup and delivery days for universal service items, i.e. letter items with stamps, be reduced to three days a week throughout Finland. This proposal is in line with the decision by the state secretaries’ postal working group. According to the current Postal Act, three-day delivery has been possible in early-morning delivery areas since 2017.
“It is important for mail recipients that the amendment will not affect the delivery speed of letters with stamps, which will remain the same. All other letters, such as letters from the authorities, are part of commercial contract-based delivery. Posti will continue to deliver these product fully in accordance with the service level agreements (SLA) between Posti and its sending customers. For example, in parcel delivery, which is not part of universal service, the number of delivery days is increasing, and we already deliver parcels to customers six days a week in more than 100 municipalities,” says Eskola.
The government decree proposes a grant for the delivery of newspapers in sparsely populated areas that do not have five-day early-morning newspaper delivery. The annual need for financial support is estimated to be EUR 10 million. In Eskola’s opinion, subsidized newspaper delivery should not be tied to a specific time of day.
“All time limits drive up delivery costs, which is something customers don’t want. Delivering at night or in the morning in sparsely populated areas would be very expensive and, due to scheduling reasons, even impossible in practice. It would also require newspapers to be edited and printed much earlier, which would reduce the newsworthiness of the newspapers.”
The state’s own digital leap and the sharp fall in the volume of printed mail call for relaxing the regulation of postal services
Last year’s postal report by the state secretaries called for more cost-effective universal service. For this reason, Eskola finds it strange that the draft proposal for the Postal Act contains multiple proposals that would tighten regulation and increase Posti’s obligations. According to Eskola, the added obligations are a very poor fit with the goal of ensuring affordable postal services for customers when volumes of printed mail are falling dramatically. Households currently receive only about 3.5 addressed items per week, and universal service letters with stamps, to which the Postal Act applies, are delivered even less often, amounting to only about one item in three weeks.
The obligations should be made more flexible so that universal service can be maintained without support from the state in the coming years. Eskola emphasizes that the fall in the volume of printed mail is also sped up by the state’s and public sector’s digitalization projects and measures to move on from printed mail.
“Setting fixed delivery days and reporting them six months in advance would, in practice, mean tighter regulations. This would prevent offering full-time delivery work to staff and lead to switching staff to part-time employment in delivery work. We need flexibility because, on average, universal service letters are delivered to households only once every three weeks,” says Eskola.
A five-day delivery obligation would increase costs for consumers
The Ministry also proposes a five-day universal service delivery obligation for Posti in areas that receive no tenders for delivery grants or that stop being an early-morning delivery area during the grant period.
Eskola would like to offer a reminder that the proposal in itself will not secure five-day newspaper delivery. Other products do not require five-day delivery. In this case, newspapers would have to bear the delivery costs almost alone on the basis of the costs for two days, which would mean that consumers would have to pay higher delivery fees due to the strict obligation.
The proposal to keep the five-day delivery obligation also contradicts the aims of the government’s own draft proposal. The government draft proposal states that “there is no longer a critical need and permanent basis for profitability for five-day delivery and pickup”.
