Finland Times

 

File Photo – Lehtikuva.

The net sales of the national postal and logistic service provider Itella decreased to EUR 461.9  million in the second quarter (from April to June) this year compared to the corresponding period of the previous year when it was EUR 495.1 million.

 

According to Itella’s interim report released in Helsinki on Friday morning, the decrease was due to the weakening and the intense competition of the logistics market as well as currency depreciation. Mail delivery volumes continued to decline substantially.

 

The economic recession has deepened the transformation of the postal industry according to Heikki Malinen, the President and CEO of Itella.

 

"The demand for transport services continued to decrease, while the delivery volumes of letters and publications continued their strong decline," said Malinen in a statement on Friday upon the release of the company's interim report for January-June 2014.

 

Postal Parcel main post office in Helsinki. Photo – Lehtikuva / Getty Images.

The CEO said that the volume of heavy traffic has continued to decrease for 25 consecutive months in Finland and these factors had a direct impact on the net sales of Itella's core businesses.

 

“The demand for transport services continued to decrease, while the delivery volumes of letters and publications continued their strong decline,” said the Itella boss, adding that the growth in e-commerce, which had otherwise been strong, was also slowed down by consumers becoming more cautious in their spending. 

 

The report also pointed out the Ukraine crisis as an additional challenge because it has kept the value of the ruble weak and thereby negatively affected the growth of Itella Russia's net sales.

 

In June, economic uncertainty had a negative impact on Itella Russia's result. 

 

“Despite the problematic business environment and difficult market situation, Itella's non-IFRS operating result for January-June improved to EUR 20.5 million,” said the CEO, adding, “I am satisfied with the improved result in logistics, achieved in spite of the challenges posed by the weak market situation in transport and Itella being affected by labor action in June”.

 

Postman is distributing mail. Photo – Lehtikuva.

In January-June, delivery volumes decreased by 9% for letters, 8% for newspapers and 10% for magazines. 

 

Late in the second quarter, the volume of delivered letters fell by a record 15%. In light of such drastic decreases in volume, it is clear that we must seek new solutions for the delivery models of traditional mail to ensure profitability and competitiveness, particularly as society as a whole is simultaneously investing strongly in digitalization.