New distribution and new prices in Post Danmark

As at 1 January 2008, Post Danmark introduces a number of changes to update the services offered to customers. The changes will ensure that Post Danmark will continue to be in a position to carry out the important societal functions associated with the provision of efficient, effective and uniform postal services to everyone throughout Denmark.

An important new concept introduced by Post Danmark is the Business Letter. This is a completely new letter service that can be used by everyone regardless of it being either associations, organisations or the corporate sector. The only requirement is that at least 3000 same-size letters must be sent at the same time. The letters will be delivered within four days, which means that Post Danmark will be able to organise handling work very efficiently, for which reason it will be possible to offer this product at prices that are lower than the prices charged for current letter types.

Helge Israelsen, CEO of Post Danmark: “I am pleased that Post Danmark is able to offer this new product. The Business Letter concept means that we will be competitive in the important large customer segment, which is a precondition for maintaining an efficient business and being able to continue to provide the best postal services to everyone in Denmark. The new concept – combined with other new initiatives – makes it possible for Post Danmark to improve working conditions for its employees. This is important for our current staff and also for our ability to recruit new people."

In addition to introducing the Business Letter concept, Post Danmark will restructure its mail delivery system: in future, ordinary postmen and postwomen will focus on distributing mail to recipients and will therefore not carry or accept any money. Consequently all COD items will have to be collected and paid at a post office or post shop.

In doing so, Post Danmark adapts its products to current customer needs and requirements. An increasing number of people order articles on the Internet, and the number of COD items has therefore dropped by around 50 per cent over the past ten years. The demand for this type of mail has become so low that, on average, each person in Denmark receives a COD item only once every three years.

Post Danmark is now carrying this drop to the logical conclusion, and as from the turn of the year all types of payments that involve Post Danmark will be effected via Post Danmark's network of post offices and post shops throughout the country.

This change, too, will have a positive effect on Post Danmark staff’s possibilities of organising their own working days.

At the turn of the year, new prices for the delivery of letters will also be introduced. All increases will be below the price cap that applies to Post Danmark services.

As at 2 January 2008, the price for the most common type of letter, the Standard Letter, will increase by DKK 0.75 to DKK 5.50. An average Dane sends about sixteen letters a year, which means that the additional cost per person is DKK 1 a month. It is possible to reduce this cost by sending Economy Letters, for which the increase will only be DKK 0.50, the price per letter being DKK 5.00. Economy Letters are cheaper because Post Danmark has more days to deliver them.

As a whole, the changes represent an approximation of Post Danmark's prices to actual cost. This is an absolutely necessary step in an increasingly liberalised market and will in fact soon be required by the European Union.

On average, letter postage will increase by 5.7 per cent with effect from 2 January 2008. The prices for the delivery of parcels will also go up.

The new year will also mean a shift of Post Danmark’s business focus.

“Post Danmark is proud to be the company in Denmark that is responsible for providing efficient and effective postal services to all citizens and enterprises. We are pleased to live up to our obligation to distribute mail to all households six days of the week. That makes us an important part of everyday life in Denmark. Society changes, and Post Danmark is a reflection of society. We must therefore adapt our business and products on an ongoing basis to ensure that Post Danmark always has the financial position and strength that enables us to live up to our social responsibility. That is the objective of the restructuring initiatives we present today,” says Helge Israelsen.