Omniva to close over 70 postal service points this fall
By November 1, national mail carrier Omniva will reduce the number of post offices and postal service points in Estonia from 256 to 182. CEO Mart Mägi said that parcel terminals and the possibility of summoning a mail carrier should help make up for it.
Why is it necessary to close postal service stations in Kiisa, Melliste, Kuimetsa, Virtsu and dozens of other places in Estonia?
People's habits have clearly changed. The sending of letters has shrunk five times over the last decade, while package deliveries are up tenfold. Delivery terminals have made sending packages so simple that the need for post offices and mail service points has fallen considerably.
However, Omniva realizes that we are a national company. We have introduced the personal mail service. This means that everyone living more than five kilometers from the nearest service point can summon a personal mail carrier to their home. The good old Swedish time returning, we might say.
Will there also be a package terminal in place of every closed post office?
Not for every single one. But Omniva has over 300 package terminals. Another roughly 100 will be installed by the year's end. Omniva will have a package presence almost everywhere the local government has asked for it.
But whether it will be on top of or near the former post office or service point? Rather, we will be where most people live.
The postal service point in Käru, Türi Municipality was closed back in 2018. There is no package terminal there yet. Please explain your criteria for these decisions.
We also measure how many people live in a given post office, service point or package terminal's service radius. We're talking about a distance from it of three to five kilometers that can still be covered on foot, without having to drive or catch a bus.
These principles make sure that package terminals that do not come cheap, with the required investment in excess of €10,000, remain profitable. Terminals are installed in places with at least 300 residents, whereas the area should have 700-900 people for a post office to make sense there.
But looking at the entire network, how much people order online, our network is expanding rather than contracting.
Is the idea to make sure postal service points and post offices are profitable?
Yes, it is the owner's expectation for every service point at least break even. They may not generate major profits but have to stay in the black.
You already said that people will be able to call mail carriers to their homes. How will that work? What must a person in Käru do if they want to send their mother who lives all the way across Estonia a penny whistle?
There is an Omniva number people can call to schedule a visit from a mail carrier. It is possible to summon a personal mail carrier until 5 p.m. on workdays.
What about if the person works several kilometers away in Paluküla and cannot come home during the workday? Could the postal worker come to Paluküla instead?
Personal mail services come where the person is. It does not have to be their home.
Which services will be brought home to people?
All services currently offered at post offices. Perhaps people will have a smaller selection of postcards or envelopes. But there will be a selection.
Can a Lasnamäe resident who no longer has the strength to walk down five flights of stairs order the service?
Most of our customers live in cities in fact. But because post offices and service points tend to be within five kilometers from where people live in urban areas, customers have to pay for the home service. The fee is €5 per visit.
With public transport, local governments joke that ferrying children using taxis is cheaper than organizing a school bus. Have we reached that phase with the mail service now, where personal services are the cheaper option?
That is largely the case, as people visiting postal service points number just two or three a week in some places. At the same time, we have to maintain the entire space, pay utility bills that can be quite expensive these days. Therefore, driving to meet people where they are can be cheaper.
Eesti Post (Omniva) has been saying for years that the recent mail service is lossmaking. Is the goal to stop talking about the universal mail service as a separate thing? To have a single network of package terminals?
No. The universal mail service is an important public service allowing people to stay in touch. Just as we are returning to universal electricity services today, it would be insensible to abandon the universal mail service. The need could be created at different times.
But we are looking at a broader reform of postal services. The Postal Act is very old and clearly in need of modernization. We hope the Riigikogu will get to it in the coming spring. The National Audit Office and other instances have pointed to the need.
What could that spell for the customer?
It always pays to look at what our neighbors, especially the Nordics have done. The Finnish postal service was given the right to deliver mail on certain days of the week a few months back.
Three days a week
Yes. Falling volumes and a skyrocketing unit price are the causes.
Letter and newspaper routes are the same for many mail workers.
That is often the case, especially in rural areas.
This means that if the number of days on which letters are delivered is reduced to four, newspapers will not be coming six days a week, will they?
Difficult to say. It depends on periodicals subscriptions. The trend today is that it is going digital, [print subscriptions] falling 5 percent a year. Should it fall further, the question of whether deliveries on six days a week are sensible will be raised for both publishers and mail carriers.
Price negotiations with publishers play a key role. And the price is going up.
It is, indeed. The price of paper is also going up. At the end of the day, it is up to the customer to decide whether to subscribe to the print issue or go digital. We do not yet know where that critical junction will be. There are different fears of it arriving a year or five years from now. For our part, the number of weekly delivery days will not be cut in the near future.
Do you have a number for how much the reform will save annually? Once a number of post offices have been closed, the terminals network expanded and personal mail carrier service streamlined?
The universal postal service is roughly €2.5 million in the red annually. It will take time to implement measures to boost efficiency and there will be expenses. But we believe we can dial that loss back by half a million euros.
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Editor: Marcus Turovski