Wednesday, January 27, 2021

Here’s what you need to know about Sweden’s crisis-hit postal service

CEO to leave with 14 million kronor

CEO Håkan Ericsson will immediately leave his role with a gol..

By Sunday Herald Team , in World Update , at April 9, 2019

CEO to leave with 14 million kronor

CEO Håkan Ericsson will immediately leave his role with a golden parachute of over 14 million kronor ($1.5 million), the Postnord board announced on Monday.

"As a consequence of acceleration market changes, the pace of Postnord's adaptation efforts needs to increase further," chairperson Christian Jansson said. Ericsson and the board both agreed that new leadership was necessary, Jansson said, and recruitment of a new CEO would begin immediately.

Head of finance to quit

The CEO isn't the only one losing his role as a result of the problems at Postnord: head of finance Gunilla Berg will also leave her post.

Jansson said that the changes weren't due to any failures by either Ericsson or Berg, adding "they have done fantastic adaptation work".

Postnord's head office in Solna, north of Stockholm. File photo: Anders Wiklund/TT

Digitalization woes

When the board refer to market changes and a need to adapt, the big problem they're facing is a falling volume of mail in Sweden linked to an increasingly digital society.

In the second half of 2018, the amount of letters posted fell by a record amount.

This prompted Ericsson to write to the Swedish government asking for the law on letter postage prices to be changed. He requested a one-krona increase "in order [for Postnord to] conduct its societal function with financial viability".

Growing losses

Last year, Postnord had an operating loss of 855 million kronor, a huge seven-fold increase on the previous year. This was mostly due to linked to staff turnover in the Danish business.

Speaking after the announcement of Ericsson's departure, Jansson said he saw two main challenges ahead for Postnord. The first was adapting to changes in how letters are sent, and understanding customer needs, while the second is coping with parcel delivery, which in contrast to letters has increased sharply in recent years along with the rise in e-commerce.

READ ALSO: Sweden, is this fur real? Dog's paw print needed to pick up parcel from post office

Why your international imports could be about to get cheaper
Photo: Tomas Oneborg/SvD/TT

READ ALSO: Swede accidentally receives Vladimir Putin's mail

Additional fees

As well as calling for increasing letter postage in general, Postnord has already had to introduce extra fees during busy periods.

The postal service introduced a "capacity supplement" over the busy Christmas period, to compensate for its increased costs such as paying for extra transport, hiring more drivers, and extending opening hours in some locations.

The fee of four kronor per parcel only applied to business customers, not private customers, meaning that it was up to individual companies to decide whether to pass the cost increase on to their own customers. This fee was in place between November 15th and December 31st, covering Black Friday as well as the Christmas break.

No post on Sundays and longer delivery times

From the start of July, postboxes will no longer be emptied on Sundays. Of the almost 22,000 postboxes in Sweden, around 2,400 have previously been emptied on Sundays.

This follows an earlier announcement from Postnord that they will Read More – Source