going the way of the phone booth? pic: Hallandsposten.se
Minister for the Interior Anders Ygeman said no today to Postnord’s request to have three days, not two, in which to get domestic mail from one part of Sweden to another, DN reports. The Swedish postal service is in crisis mode – see this post.
Formal approval from the government is still needed, but Postnord has already received permission from the the Post and Telecom Authority (Post- och Telestyrelsen) to deliver mail to people’s residences only every other day (instead of every day). However, this won’t be helpful unless it is also allowed to take three days to move the letter to where it can be delivered. This second part got a cold no.
What Postnord did get, was the promise of a formal inquiry – slated to take 18 months to complete. “A postal service inquiry is needed to see if this is the best way” Ygeman said. “I have to attend to what is best for citizens and the needs of customers.”
As their mail delivery service is used less and less, Postnord is expected to be billions of kronor in the red in only a few years.
what will stamp collectors do? pic: sydsvenskan.se
DN revealed a secret report today, that showed Postnord to be on the brink of bankruptcy (konkurs). Postnord is the second largest employee in Sweden with 20,000 employees. Plus, it mostly (though not always) delivers mail to your door on a regular basis. And it has cute stamps you can stick on things.
On the negative side, it doesn’t work well (understatement alert) and it’s fairly expensive. Not expensive enough, though, apparently.
Over a year ago, in December 2018, the Danish and Swedish governments ordered an analysis from McKinsey & Company on the postal service’s future. DN asked for a copy, and got a 140 page report – largely blacked out in text-camouflaging ink. DN then got inside information from people in the know.
Since 2000, the Danish mail delivery service has decreased 90%. In Sweden, digitalization has taken a little longer, but the prognosis is bad here too. Just over the last three years, DN reports, the service has gone 2.99 million kronor in the red. Most of the this is due to the dire situation in Denmark, it is said.
The Post and Telecom Authority (Post- och Telestyrelsen), which is the agency responsible for the service (tillsynsmyndigheten), forecasts that the volume of mail in Sweden will be halved within the next few years. This service is where Postnord makes its money.
Denmark and Sweden jointly own Postnord. Sweden owns just under 60%, and Denmark the rest. (For some incomprehensible reason, though, they have equal votes on the board.) Each country’s postal service merged to form Postnord in 2009. It didn’t help.
The postal service may not be a profitable company, but it still has a mandate for society: It is hard to imagine a country with no postal service at all. Therefor the alternatives aren’t many: increase the prices drastically, or cover its losses with a massive state subsidy.
Annemarie Gardshol, executive director of Postnord (vd) refused to comment on the report to SVT, but said that the societal duty they have today must be changed, or it needs to be subsidized. “If the state wants to maintain the current level of service, a subsidy may be needed – but we’re not there today.”
DN reports that Postnord had almost 3 billion kronor in its bank account as of the end of September, 2019. Included in that is stock holdings of 2 billion. If that goes down to half, a liquidation balance is reached – which is the first step to declaring bankruptcy.
We need to start thinking about what the mail means to us.
