Posti seeks measures to secure delivery in rural areas

National Postal and logistic services operator Posti on Wednesday sought quick actions from the next government to secure the delivery of mail and printed newspapers in an increasingly digitalized Finland.

In the coming years, the delivery of printed newspapers should be secured by a fixed-term State aid in rural areas, said a Posti press release.

It also proposed the renewal of the postal regulation should be continued in order to meet the need and expectations of a changing market. In addition, the operating conditions for domestic E-commerce and logistics need to be strengthened.

The postal and media industry is undergoing a dramatic transformation. The number of letters delivered in Finland has decreased by half within ten years, and the delivery volume of printed newspapers has fallen to 1950s’ levels. An average, Posti delivers to Finnish households only 8 delivery items per week. In the coming years, the amount of mail continues to decrease rapidly as the communication of citizens, companies and public sector becomes digital.

Posti has compiled a list of solution proposals for decision makers on how to secure newspaper delivery and Postal services also in future and how to strengthen operating conditions of domestic parcel- and logistics market as international competition is tightening.

“Posti is very concerned about how to secure the distribution of newspapers and the universal postal service, and how to arrange the delivery especially in sparsely populated areas in the next few years as letter volumes are falling rapidly. For subscribers and publishers printed newspapers play still a major role. We need to have a sustainable bridge to digital era,” said Heikki Malinen, President and CEO of Posti Group Corporation.

In particular, in order to solve the issue of newspapers delivery, State needs to provide structural solutions so that media industry can overcome the transition period of digitalization. In the coming years, it´s printed newspapers which require five-day delivery.

Posti proposed that the delivery of printed newspapers should be supported by temporary State aid, which would enable pluralism of information and possibility to read newspapers also in rural areas. In the coming years printed newspapers continue to play a key role for citizens in terms of access to information and freedom of speech.

“State could compensate the newspaper delivery by arranging a public tender between various delivery operators in the areas defined by FICORA, where the early delivery of subscribed newspapers on commercial terms has not been implemented. Belgium and Norway provide successful examples of compensation for newspapers. As another solution, State could compensate commercially non-viable postal services by an outsourced service model,” Malinen suggested.

Currently Finland is one the few countries in Europe State is not giving any compensation for mail or newspaper delivery. The European Commission allows member countries to take national measures to improve the financial stability of newspapers. Until 1995, newspaper delivery was supported with a delivery aid. At its largest, the aid was approximately EUR 60 million in a year.

The proposals include securing newspaper delivery with a State aid in rural areas. State procures publication delivery through competitive tendering or outsourced services. Alternatively, a paper or digital newspaper order could be supported by granting a tax deduction from the order price. Continuing renewal of the Postal Act in order to maintain the universal service without public compensation. Creating a growth program for Finnish e-commerce. As the international competition increases there is need to improve operating conditions and export opportunities for the Finnish e-commerce and small businesses. Improving the operating conditions for logistics. Efficient logistics improve the competitiveness of Finnish companies. Regulation and taxation must be competitive neutral for all operators in the sector.