Finnish postal operator Posti has strongly criticised the country’s regulator for threatening a heavy fine if it fails to meet what it calls an ‘unreasonable’ mail delivery target of nearly 100%.
The company said the regulator insists it must reach a 99.8% quality level in the five-day delivery of universal service letters or face a heavy fine, while competitors can freely deliver letters without any obligations.
“The implementation rate of our delivery services is already over 99%. In order to comply with the interpretation of the legislation, we would need to do the impossible,” complained Kaj Kulp, Vice President at Posti's Mail Services.
Posti is already very concerned about the sustainability of the current universal service in view of the national economy. Due to stringent regulation, the unit costs in mail delivery are becoming unbearably high, considering that digitalization is reducing the number of letters by almost 10% a year.
The Ministry of Transport and Communications has reacted to the pressure for change caused by digitalization, it pointed out. The ministry has requested opinions on reform of the Postal Act and according to which regulation will be made less stringent in order to better address customers' needs.
However, the Postal Act is being interpreted even more strictly at the same time. The Finnish Communications Regulatory Authority now insists that Posti must reach a 99.8% quality level in the five-day delivery of universal service letters by the end of April 2017. If it cannot, the Finnish Communications Regulatory Authority will impose a €100,000 penalty payment on Posti.
According to Kaj Kulp, Vice President at Posti's Mail Services, the average implementation rate of the five-day delivery is more than 99%, as indicated by a reporting model that has been in use since spring 2015. Apart from a few unfortunate local disruptions in delivery, as a whole such a high implementation rate can be considered excellent.
“In reality, the 99.8% quality requirement is very tight, in fact impossible. Ensuring almost 100% means that we should have a stand-by deputy for each employee available immediately upon call. This would increase mail delivery costs considerably, by as much as tens of millions of euros each year,” he said.
“If we intend to reach the 99.8% quality level, the resulting extra costs will in fact be paid by Posti's customers. As a public company, Posti does not receive any support from the state.”
According to the requirement, the percentage of undelivered universal service letters may not exceed 0.2% a month. In practice, this means that for each postal code in Finland, at most only one stamped letter a week can remain undelivered. Annually, about 100 million universal service letters are delivered in Finland.
In particular, Kulp questioned why human factors, such as the mail deliverer falling ill or the breakdown of a sorting machine, are not taken into consideration in the requirement level. Sick leave at Posti amounted to 6.8% of regular working time in September, and the amount varies daily. During the influenza wave in winter, hundreds of mail deliverers can fall ill at a day's notice.
“A disruption in delivery is often due to unexpected sick leave. The fact is that 100% quality level cannot be sustainably achieved in any industrial operations. The work is done by people, not machines.”
According to Kulp, the legislation should be fair in free competition in letter mail deliveries. He points out that as a result of the amendment to the Postal Act, which entered into force in June, Posti's competitors may freely deliver mail anywhere and at any time without any specific delivery day obligations.
