Great challenges in a changing postal market

5/2/2017 1

The Swedish postal market faces large changes. Increased digitalisation creates new conditions for the postal market and requires adaptations. This is what PTS has established in a new report.

In the report, Swedish Postal Market 2017, PTS points to how the Swedish postal market faces great pressure for change. New technological solutions and changes to user behaviour mean that the postal operators need to adapt their approach. The operators suffering from rapidly decreasing volumes of letters must compensate for this by reducing costs and streamlining the organisation, which sometimes compromises quality.

During 2016 and 2017, PTS received a considerable increase in the number of complaints regarding post distribution. The most common reason for the general public to contact PTS was to complain about issues with delivery of post. This includes letters that, for some reason, have not reached their recipient or were delivered too late, or that people received their neighbour's post by mistake.

“Even though the postal market is changing, it is important to maintain reliability in the organisation. For there to be faith in the letter as a form of communication, it is essential that quality maintains a suitably high standard. PTS has therefore improved supervision efforts and we are in close dialogue with the postal operators about this matter,” says Sten Selander, head of PTS postal unit.

At the end of May, PTS will issue a report that focuses specifically on postal operators’ problems with delivery quality.  

Letter volumes falling – PostNord continues to be largest actor

Since 2000, the total volume of letters in Sweden has decreased by close to one third. In 2016 the volumes continued to decline.

The largest actor on the market is PostNord, responsible for approximately 81 per cent of letters distributed (88.2 per cent of turnover). Bring Citymail is the largest competitor, and has increased its market share to 17.5 per cent of consignments delivered (10 per cent of turnover).

E-commerce continues to increase

PTS can verify that e-commerce continues to increase significantly in Sweden. However, it increases consumer expectations and demands, for example regarding home delivery of parcels and lighter goods.  At the same time the increased pressure on capacity for the existing service network creates a greater need for postal operators and other parcel services to develop new logistical solutions.

Digital mailboxes challenging the letter

In 2016 there was a break in the trend regarding digital mailboxes. The number of users for both government digital post services and private companies with digital mailboxes increased substantially. Currently, mostly private individuals have signed up, however the number of companies using digital mailboxes has also increased.

The Government has appointed an enquiry to speed up digitalisation within the public sector, and mentions digital mailboxes. PTS believes that the decline in letter volumes will accelerate in coming years because of increased use of digital alternatives, amongst other things.

Continual adaptation to the current situation

In the report, PTS establishes that development – not just in Sweden, but also in other countries – shows that there is a need to review regulations, for postal operators to be able to adapt their organisations based on the current situation, without lowering the requirements for quality and reliability. This includes changing the requirements on overnight forwarding and five-day delivery. However, such changes must be implemented in a sustainable way to have the desired effect. This includes clearer requirements from the authorities regarding reliability and quality.

“A changeover from traditional postal services to digital solutions is ongoing. But in the long run, this changeover needs to be sustainable and take the needs of different user groups into consideration,” says Sten Selander.

More information Sten Selander, head of PTS postal unit, tel.: +46 (0) 70 815 10 00 PTS press office, tel: +46 (0) 8 678 55 55

More about the Swedish postal market 2017

The PTS report addresses several aspects of the Swedish postal market.

Changeover to cluster box units continues

In 2016, more households continued to change over from regular letter boxes to cluster box units. By the end of the year, approximately 42 per cent of those living in apartment buildings used cluster box units.

Missing letters

Letters that could not be delivered (for example due to incorrect address or postage) are to be submitted to PTS. PTS opens the letters and tries to locate the sender. If they are successful, PTS returns the letter to sender. In 2016, PTS received 367,727 of such consignments and over 24 per cent were resolved.

About the report

The Swedish Postal Market 2017 report monitors accessibility to postal services, the competition situations for each market share in the postal area and how postal operators meet their permit conditions. The report is based on its own statistics and analysis and statistics from the branch.