Reduced volumes bring quality challenges

4/16/2018

The postal market is continuing to change, reflecting the fact that we are sending fewer letters but a growing number of parcels. Postal operators still face challenges when it comes to maintaining a high standard of service. This has been confirmed by the Swedish Post and Telecom Authority’s (PTS) report “Swedish Postal Market 2018”.

Letter volumes on the Swedish postal market are continuing to decline. In 2017 a total of 2.2 billion items of mail were sent, which is just over three per cent down on the previous year. Since 2000 the letter volume in Sweden has fallen almost 36 per cent. For postal operators, this means that parts of their revenue are disappearing, although the need for efficient mail delivery remains strong in Sweden.

“Postal operators need to adapt their operations to reflect users’ behaviour and changing needs. It is vital that this be done in a sustainable and reliable way,” says Olof Bjurö, Head of the Postal Affairs Department at PTS.

PostNord remains largest player

PostNord is, without doubt, the largest player on the postal market and accounts for almost 79 per cent of all letters delivered. However, PostNord’s market share is shrinking slightly, with just over 20 per cent of letters now being delivered by Bring Citymail, in partnership with distributors of morning papers, or local postal operators.

More and more missing letters

As regards quality of service, PTS received slightly more consumer complaints in 2017 than the previous year. Among the major postal operators, PostNord registered an increase in the number of customer comments, bearing in mind falling letter volumes. Bring Citymail also received more complaints during 2017 than during the previous year.

An ominous trend is that the number of complaints involving items of mail that have been lost or damaged, for example, shows a marked increase. In 2017 the number of complaints about missing letters and parcels rose by over 50 per cent.

“It is important that postal operators take this matter seriously and take action to improve the quality of service. As far as PTS is concerned, we also have to continue taking action to safeguard the reliability of the postal sector,” says Olof Bjurö.

“For this reason, quality requirements are being tightened in the new licence conditions for, among other operators, PostNord and Bring Citymail. We will assess whether these requirements are sufficient, or whether additional measures are needed to improve quality.”

PTS also believes there is a need to safeguard the quality of address registers so that letters to be delivered are correctly addressed. With this in mind, industry players and PTS launched an address forum in 2017 to examine addressing issues.

Residential customers without five day deliveries

One of the fundamental requirements for the universal service is that PostNord must be able to deliver mail to all recipients on every working day no matter where in the country they live, save in circumstances or geographical conditions approved by the licensing authority, when an exception may be made to the five-day a week delivery rule.

There are at present just over 1,300 residential customers who are exempt from receiving deliveries five days a week. The new licence conditions clarify the requirements for investigation and documentation set out for PostNord by PTS in connection with exceptions to the five-day requirement. According to the conditions, the exemption option must be used restrictively.

Reasonable price increase for postage

PTS has also looked in particular at the increase in postage for domestic letters, from seven to nine Swedish kronor, which PostNord implemented on 1 January 2018. The authority has examined whether postage of nine kronor is cost-oriented, which means that the price reasonably reflects the costs of providing the service.

PTS considers that PostNord’s postage, for stamped two-day letters, does not contravene the requirement for cost-oriented pricing.

Click here to read the report. (in Swedish only)

More information
Olof Bjurö, Head of the Postal Affairs Department at PTS, +46 (0)70-811 40 05
Emma Maraschin, Head of Postal Supervision at PTS, +46 (0)73-644 56 74
PTS Press Office, +46 (0)8-678 55 55

About the report

The Swedish Postal Market 2018 report monitors, among other aspects, accessibility to postal services, the competition situation in various submarkets within the postal services sector, and how postal operators meet their licence conditions. The report is based on own statistics and analysis, as well as statistics from the industry.

The Swedish postal market in 2018 in figures

Share of distributed letters: PostNord 79.1%, Bring Citymail 17.9%, distributors of morning papers 2.8%.
Total letter volume: 2.20 billion (2017), 2.27 billion (2016)
Complaints to PTS: 2,554 (2017), 2,520 (2016)
Customer comments to PostNord: 162,000 (2017), 167,000 (2016)
Complaints to Bring Citymail: 16,893 (2017), 15,323 (2016)