PostNord: ecommerce grows, mail volumes continue to fall

PostNord’s net sales decreased by 2% during the first half of this year. While mail volumes declined by a total of 8%, parcel volumes however increased by 13%, with ecommerce related B2C parcel volumes rising even 17%. But on net sales level, the parcel volumes can’t fully compensate for the declining mail volumes, the postal company says.

PostNord published its interim report for the period April – June 2015 but it also looked at the first six months of this year. During this period, PostNord Sweden saw its net sales unchanged, with Mail & Communication showing a decrease of 4% in sales, while sales for Logistics increased by 5%. PostNord Denmark’s net sales however were down 1%, and net sales from PostNord Norway also decreased, by 2%. PostNord Finland saw its net sales grew 7% during the first six months of this year.

PostNord‘s CEO Håkan Ericsson is confident the company is ready for the future. It signed several major contracts in the parcel distribution industry (both B2B and B2C) and also signed a ‘significant contract’ with the COOP chain in Denmark regarding the distribution of direct mail, which will take effect from January 1, 2016.

Ecommerce segments continues to grow strongly
“About a third of the new agreements that we enter into are in the ecommerce segment, which is continuing to grow strongly, and B2C parcel volumes rose by 17% during the quarter”, Ericsson says. Also, during the second quarter of this year, PostNord expanded its strategic cooperation with DPDgroup, the second largest service provider in the European parcel market. Part of the cooperation is a B2C strategy, which links both distribution networks, thereby creating a system with service points at 26,000 locations in Europe.

Furthermore, PostNord’s CEO states it vital that amendments to the postal regulations should be based on the changing consumer needs, “so that a universal postal service can be maintained in the long term under reasonable conditions”. In April, the European Union said that postal services that are not covered by individually negotiated agreements are to be VAT-exempt. This was the EU’s verdict on a case brought by the European Commission against the Swedish state for non-implementation of EU rules regarding value added tax on postal services. That’s why PostNord is now awaiting ongoing amendments to Swedish VAT legislation. “This may entail an increase in costs for PostNord due to a reduced right to deductions for input VAT”, he explains.

About PostNord
PostNord AB is a state-owned company that consists of the two merged companies Posten and Post Danmark. It offers communications and logistics solutions to, from and within the Nordics. Last year, it had 38,000 employees and sales of 4.24 billion euros.