Itella to withdraw from air and sea freight business in Scandinavia

Finland’s postal operator Itella has said it will abandon its business activities in the fields of air and sea freight in Scandinavia. The company said the move came as part of a move to improve profitability within the organisation.

Itella will relinquish service warehouses in Sweden, Norway and Denmark as its strategy switches to concentrate on road transport services in Scandinavian countries, in which the company believes it has a good opportunity to increase its market share.

Internal distribution logistics in Sweden, Norway and Denmark will be outsourced, the firm said. None of the changes affect operations in Finland or the Baltic Republics.

Itella said 300 jobs could be affected by the new strategy, but this number will depend on employee negotiations.

Profitability

The Finnish company which is set to rebrand to Posti as part of its transformation, expanded its logistics operations in the Nordic region from 2005 as part of an internationalisation strategy.

Since then, however, economic decline since the global financial crisis and intense competition have weakened the profitability of logistics operations in the region, Itella said.

Itella’s current strategy is to focus its business in Finland, Russia and surrounding areas.

Jani Jolkkonen, Itella senior vice president, said: “The profitability of operations in Scandinavia has not been at an adequate level and this is why we need a new strategy. Itella’s goal is to ensure the profitability of its operations in all situations over the short- and long-term. The changes that are being planned now are necessary to reach this goal.”