Creating the Extraordinary
This summer Post & Parcel spoke to Mart Mägi, Chairman of the Executive Board of Omniva to find out why their expansive parcel locker network is so popular, and hear about his determination to find speedy and carbon neutral delivery solutions.
What drew you to your role at Omniva?
I was attracted to the chance to create a new strategy for Omniva and help the organisation get to the next level. Estonia is well known as a digital country but nevertheless there is a lot of room to develop and ensure that all Omniva’s physical services are supported digitally.
I have been in the service sector for 20 years working in banking and insurance, but also in retail business and this was an opportunity to switch between sectors. My passion is to create extraordinary customer service and Omniva is a huge service organisation – we have so many different delivery channels including post offices, postal points, delivery points, parcel machines, parcel lockers and courier channels – we like to call it ‘Omni channel’.
Can you describe your management style?
I’ve worked as a CEO for almost 25 years and have learnt that the most important thing is to put together an extraordinary team and that is how you get the best results. I see myself more like a coach, not a manager or leader so my job is to coach my team to be the best one. I have had a some very interesting people on my team over the years including the previous president of Estonia, Mrs Kersti Kaljulaid!
Can you tell me about the PUDO uptake in Estonia?
Parcel machines are a dominant channel for us – we have over 300 parcel machines in Estonia and almost 950 in Baltic states together. This year we delivered 30 million parcels, and out of the 30 million parcels, 29 million were delivered to parcel machines. So the couriers and the post office are getting a very limited proportion of parcels.
What’s the strangest thing you have had delivered to a parcel locker?
People are using lockers to send everything. The other day believe it or not someone even ordered honeybees to a locker!
How much of Estonia is rural?
50% of Estonia is covered by forest, 30% is made up of swamps so only 20% is urban. Aas lLots of areas are hard to access making them time consuming for posties which is another reason parcel lockers work so well for us. . The parcel lockers save us both time and fuel as we don’t have to revisit areas – we can deliver all the parcels to in one go. We also have a community box service where a group of people or families can sign up to have their post delivered to one box and everyone has a key. We have a very low level of crime and are very community orientated which makes this another good alternative.
Are parcel lockers suitable for every location?
In urban areas and small villages, parcel lockers work incredibly well and they are better for the environment than home delivery. However we have 2,200 small islands in Estonia and while many of the islanders are keen to have parcel machines they are a big investment and it is not profitable for such a small area serving so few people. So, instead of installing parcel lockers for the smaller islands we have created virtual parcel machines.
What is a virtual parcel machine?
Basically when people who live in the islands buy something online they select a virtual locker location from the drop down menu but they are actually delivered to people’s homes.
Why do you think Estonians have been so receptive to parcel lockers?
It has been a journey for us – we installed our first parcel machine in 2011 and it has developed from there. But we are a digital nation – Estonians like to try out new things – we actually prefer to interact with machines than people! That is the kind of culture we have, similar to Nordic countries and because of that we try to integrate technology into everything. And the lockers are used by people of all ages who use them to both pick up parcels but also to send.
Did the pandemic play a part in their popularity?
COVID-19 had a huge impact on the uptake. Almost 99% of our parcel machines are located outside so people could easily access the lockers when the shops were closed during lockdowns. The location of the lockers is really important in the rural areas we try and install them outside or close to shops so customers can pick up parcels in the same location where they shop and save them time. They are also really good for the environment which appeals to Estonians.
How environmentally conscious are Estonians?
Clean environment and carbon neutrality is really important for Estonians – we care a lot about the environment and the parcel lockers have helped us to reduce two thirds of our carbon footprint – this is a huge achievement for us.
Estonians live in the middle of the forest – we have fresh water, beautiful beaches and some really nice national parks with lots of wildlife. So we live with extraordinarily good conditions without pollution so it is important for Estonians to ensure our country remains as beautiful as it is. Estonians even started “Let’s Do It! World” – day.
What purpose do Post Offices serve in Estonia?
We have over 200 Post offices but being frank the number is decreasing rapidly as they aren’t used so much anymore. Only 2% of our parcels go through the post office and these tend to be brought in by elderly / disabled people who prefer this channel. As a socially responsible company we need to continue this service particularly in rural area but as I say it is decreasing.
What has been the impact of the war in Ukraine on Omniva?
A huge amount of our activities involve Ukraine – we deliver commercial packages and provide last mile delivery for the country. So, when the war started it had a huge impact and it was very hard as the flow of parcels completely stopped for a month. Luckily now we have reopened services for people in the west of the country. The volumes are still very small and I think they will remain low for a long time due to the ongoing war.
How have you supported Ukraine?
Culturally we are very connected to Ukraine – when the war began we immediately stopped all commercial activities with Russia and Belarus to show our support we also have Ukrainian refugees working for us who are brilliant. We were also one of the first countries to launch a free postal service to allow people to send humanitarian adi to the Ukraine and we also to were one of the first to create a stamp to support the Ukraine. The ‘Glory to Ukraine!’ postage stamp, which was released exactly one month after the start of the war in Ukraine, is Estonia’s symbolic show of support to the state and people of Ukraine in defending their independence. The postage stamp carries a message of peace that is symbolised by a dove of peace. The postage stamp depicts a dove of peace against the background of the colours of the Ukrainian flag. A postcard with a similar design was given for free as a gift with all purchases of the stamp. We created 50,000 stamps and it has nearly sold out.
According to Estonian law, state-owned companies are not allowed to donate, so we support Ukraine through our services and activities. We provided charities and institutions, for example Estonian Red Cross, the non-profit Mondo, and the Estonian Food Bank with free transportation of humanitarian aid collected for Ukraine. Omniva has sent altogether 34 trucks with humanitarian aid to Ukraine.
We feel like it is our war too as we are also on the border of Russia – it is very close to our hearts.
WMX Europe is coming to Estonia in June – what would like people to know about Estonia and Omniva?
First of all I would like to say that even though we are a small country, we really try to be innovative and like to create and trial new technology. For example our electric delivery bikes are designed for all weather conditions including the winter and are run on solar energy.
We are trying to find the right combination of delivery models which help us meet our carbon neutral aims but also save time for our customers. We are really interested in autonomous technology provided by companies like Cleveron and Starship. In Estonia robots are commonplace – you see them whenever you go out and many people use them for food delivery. Estonians tend to see the fun in life and are enjoying trialling this new step into the future.
What are your key aims for the next 12 months?
We are hoping Omniva will be ready for public listing either next year or the year after that. Next year a new postal law should be passed in Estonia which will mean postal pricing will be agreed with the competition authority and not with the government. Getting postal pricing on the economical ground, also gives investors the security they need to invest into company. Today 90% of our revenue is coming from free market services, we believe that the 10% USO service needs to be transparent for investors.
So we are doing lots of work to get the company ready for the listing and at the same time we are doing everything we can so that by 2030 we are able to operate as a carbon neutral organisation.