The universal postal service brought a loss of €1.8 million to Eesti Post last year. 

Express post, which costs €2-€3 at present arrives the next day but under the new regime would take up to three days, while regular post would take five days.

Additionally, postal rates are expected to rise, with regular letters potentially increasing from €1.30 to €1.50-1.70 to send.

State-owned postal service Eesti Post/Omniva says declining postal volumes have made a universal service costlier, which in turn has led to losses.

Ministry of Rural and Regional Affairs adviser Taavi Kurvits said: "Despite the fact that volumes are falling, we certainly see right now that the postal service is very important for certain age groups. We would like to ensure its continuity, but we can see that with the changes we have planned, we can guarantee such a compromise."

"International shipments are usually marked as express letters by default, meaning they fall into a faster category of mail.

"This means that for instance if someone sends a letter from America, Eesti Post will not check how rapidly that letter moves inside America, but once it arrives in Estonia, it has to reach the addressee by the next day," Kurvits went on.

The changes will remove the need for the state to provide a subsidized service, Kurvits added.

"The postal price level should be at that level where there is no need to further compensate for the service. Currently, Eesti Post is offering the service at below cost."

Eesti Post/Omniva has said it is also modernizing its services, to include packages wholesale being delivered directly to automated parcel machines, rather than post offices, among other changes.

Eesti Post's logistics and courier network manager for the Baltics Kristi Unt said: "This actually creates quite a lot of flexibility for the customer, as there are fewer post offices, which may be up to 30 kilometers away from the customer."

"Moving forward now, we can better accommodate the customer, and direct shipments to the nearest access point, such as a package machine," he added.

The state is also reducing subsidies for rural periodical deliveries, by 15 percent in the new year, reflecting a continued decline in subscription volumes.

On this, Taavi Kurvits at the regional affairs ministry said: "The annual volumes of periodicals via home delivery have also fallen by approximately the same magnitude. In fact, we are reviewing the subsidy conditions in cooperation with Eesti Post and the Media Publishers' Association (EML), meaning where we channel this subsidy. In other words, the areas where we compensate for this impact, to enable the impact to be as negligible as possible, and do that we subsidize those areas where the need is actually the greatest."

Kristi Unt at Eesti Post said: "The rise in the fourth-quarter subsidy for periodicals derived from the fact that the actual volume of periodicals has fallen more this year than was forecast, so adjustments were made for the fourth quarter based on this.

"The state's decision to cut the subsidy by 15 percent will take effect in January 2025,"

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