Swedish Postal Market 2020 -PTS-ER-2020:10


The postal market continues to change in line with a society that is sending fewer letters but an increasing number of parcels.

During 2019, the volume of letters in Sweden decreased by 10.5 per cent, which is the biggest percentage decline ever recorded. Since 2000, the total volume of letters has decreased by the very significant amount of 47.3 per cent. To a large extent, the major changes in the postal market are due to the ongoing digitalisation in society, which is resulting in changes to communications and patterns of consumption. The user surveys conducted by PTS indicate that the need for delivery of items of written correspondence five days a week is decreasing but that amongst the users, there is a continued need for a reliable letter service. Despite the societal changes, the Authority believes there will also be a continued need for a long-term, sustainable and good quality universal postal service, accessible throughout the entire country.

The two markets for postal services - the letter market and the parcel market - continue to develop in different directions and encounter increasingly diverse conditions. The Swedish postal service, PostNord continues to enjoy a strong position in the letters market. After a consistent decrease up to and including 2018, the trend was broken in 2019 and the market share for PostNord increased from 77.5 per cent to just under 80 per cent of the number of letters delivered. The largest current competitor to PostNord in the letter market is Citymail. In 2019, the market share for the operators shrank by a few percentage points to just under 19 per cent.

For the first time, PTS is able to provide an overall picture of the Swedish parcel market in this report, thanks to new opportunities for data collection under the EU Parcel Regulation and the Swedish Postal Services Act.2 Throughout 2018, 246.0 million parcels were distributed in Sweden, of which 31.4 million were destined for recipients in another country. In 2018, turnover in the parcel market was a total of SEK 15.9 billion, for which the domestic market represented SEK 8.8 billion. There is well-developed competition in the parcel market from the perspective of the provision of services. The rapid development of E-commerce leads to a market with a different competitive landscape and different dynamics to those of the letter market. However, in terms of geographical coverage, PostNord still holds a special position in both the letter and parcel market through its rural postal delivery service.

During 2019, PostNord fulfilled, with good margins, the national level transit requirements within the universal postal service, as set out in the Postal Services Ordinance. PTS can conclude that the operational quality of the postal operators stabilised during 2018 and 2019 compared to previous years, which is reflected, inter alia, in a decreased number of complaints to both the authorities and to the operators. Given that the postal market and postal operators continue to face major changes, the overall goal for PTS regulatory operations is to monitor how the postal operators maintain their ability to plan and implement changes, as well as manage disruptions to their operations.

The European Postal Services Directive states that each Member State must undertake measures to ensure that the universal postal services are developed in response to the technical, economic and social environments, as well as to the needs of the users. PTS is taking part in the EU review of the Postal Services Directive and has emphasised the importance of a future postal regulation that ensures a basic postal service that is responsive to the needs of the users, while at the same time allowing for adaptation of the postal service at the national level, which will ensure a good postal service in all parts of the country.

In Sweden, PostNord has announced that the operator wants to test and evaluate an amended delivery model in a geographically defined area. In practice, the model means that the majority of letters will be delivered every other day. The operator has stated that the intention is to adapt operations to the new requirement of a two-day transit time, which the Government included in the Postal Ordinance on 1 January 2018. At the same time, the Government is announcing that it intends to launch a new review into postal legislation, for the purposes of reviewing the regulatory framework, given the changed needs of society for postal services. PTS views both initiatives as positive and as part of the work in creating the conditions for a nationwide, efficient, reliable and environmentally sustainable postal delivery, that will continue to be self-financed as far as possible. During 2020, PTS intends to continue to monitor the work of PostNord on testing an amended delivery model and to support the future postal legislation enquiry in its work.