Posti Group to sell Scandinavian road freight business

Posti Group to sell Scandinavian road freight business

Posti Group — the Finnish national postal company previously known as Itella — is selling off its Scandinavian road freight business. The business is being sold to Nordic Transport Group (NTG) for an undisclosed price, and is expected to be completed by mid-2015.

The company said selling off its international transport service, which includes international freight operations within Finland, comes as part of its strategy to improve the profitability of its logistics business and focus on Finland, Russia and the Baltic Republics.

Itella expanded in the Nordic region from 2005 as it pursued an internationalisation strategy in a growth area. However, since then the decline of the region’s economies and rise of “intense” competition has weakened the profitability of the logistics business run under the Itella Logistics brand.

The sale does not include Posti’s operations in Finland, Baltic countries and Russia.

In future, Posti Group said it would provide international freight services to its customers through a partnership network, which should include NTG itself as well as other firms.

Meanwhile, the company will continue to provide logistics services within Finland including parcels services, company transport services and supply chain solutions. In Sweden, the company plans to continue its parcel operations, growing thanks to the popularity of e-commerce.

The company will also continue its storage services in Norway.

The sale of the Scandinavian road freight business is expected to see about 140 employees in Sweden, Norway and Denmark, along with 50 in Finland, transferring to NTG.

Outsourcing

Jukka Rosenberg, senior vice president of Posti’s parcel and logistics services, said the sale came as the company continued efforts to improve profitability and focus more on its home territory.

“Already last year we restructured our operations in Scandinavia,” he pointed out.

“With this transaction, NTG becomes a significant partner for Posti. By cooperating with NTG and other international players, we can offer our customers high-quality services in the field of international freight, too.”

Posti Group, which rebranded from Itella at the start of this year, saw its sales fall 6% year-on-year last year, with pre-tax earnings slumping 40%.

The company’s core business has been hit by the ongoing switch of customers from physical mail to digital communications, the weak Finnish economy and the recession in Russia that has been partly caused by Western sanctions.

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