Photo: postnord.no InNight

It doesn’t look good for the Swedish-Danish post giant PostNord. While package deliveries are at all all-time high, PostNord is losing money, pushing it to the verge of bankruptcy. Digitalization has shifted trends in postage, creating less than desirable conditions for both consumers and workers in the postal industry. Let’s unpack why this story is flooding headlines in both countries.

PostNorden grundades som ett logistik – och kommunikationsföretag i Norden.
PostNord was founded as a logistic and communications company in the Nordic Countries.

Intended to streamline logistics management and capitalize on new opportunities in the international business and post delivery realms in the Nordic Countries, Sweden’s postal service Posten merged with Denmark’s PostDenmark to form PostNord in 2009. The company is jointly owned by the governments of Sweden and Denmark, Sweden holds a larger share of the company at 60%. Initially, this was seen as a match-made in heaven, a proactive approach to address a dramatically-changing postal industry.

Digitalisering styr kommunikationen
Digitalization Controls Communication

PostNord says that digitalization is a key factor in the financial crisis they are currently facing. People are communicating via email, text, and social media, rather than sending letters. Government organizations and large companies are no longer investing in postage to send statements, bills, and other documents to customers. Instead, e-statements, and pay online options have eliminated a huge income stream from both service providers and customers.

Vi skickar allt färre brev.  We send fewer and fewer letters.

Swedish Posten has been around since 1636

Statistics show that posted mail in Sweden has dropped consistently at record rates over the past 2. But despite society sending less letters, postal delivery still happens daily, and essentially, the amount of money spent on postage is not supporting the operations costs for PostNord. Daily delivery to rural communities is exponentially more costly for PostNord due primarily to lengthy commutes for letter carriers.

Situationen speglas i Danmark.  This situation is mirrored in Denmark.

Denmark is experiencing the same shifts in communication. PostNord had to lay-off a large number of Danish workers because they were not simply not needed to deliver letters anymore. This process cost the company billions of kronor, paying-off each employee with 3 years of salary.

På början av 2000-talet växte e-handeln mycket kraftigt
E-commerce grew dramatically in the beginning of the 2000’s

In reaction to e-commerce trends, Swedish Posten (and later the collective PostNord) shifted its focus to package delivery, investing in infrastructure for speed, package tracking, and pick-up stations in outposts like convenience and grocery stores. This shift had a negative effect on letter distribution however, leading to mass dissatisfaction from customers. Letters took exponentially longer to reach recipients and in a few cases, internal system issues lead to the disappearance of batches of thousands of letters.

Finns det några lösningar? Are there any solutions?

Former PostNord CEO Håkan Ericsson tried to appeal to the government proposing an increase to the cost of postage in Sweden by 1 krona. They have also implemented increased postage and parcel costs during busy periods from Nov. 15-Dec. 31st, justifying higher operations costs during high-volume events like Black Friday (yes, this is unfortunately a thing in Sweden), and Christmas. They have also been researching ways to stagger postal service, potentially delivering letters every-other-day or even every-third-day. These changes would of course crave government approval.

Företagets styrelse kräver nytt ledarskap.
The company’s board demands new leadership.

Both the CEO and Head of Finance Gunilla Berg were forced to leave their roles in early 2019 in order to bring in new leadership in this time of crisis. The situation has escalated as of late due to statements by Danish political parties. Hans Kristian Skibby, from the Danish People’s Party, sees no permanent fix to this situation and said, “Hopefully we can have a happy divorce with PostNord in Sweden.”

The Swedish and Danish governments have each been investigating this situation and are set to make decisions this spring on the company’s future, so stay tuned! If you’d like to learn more about what PostNord has to say, read på svenska här.