Cyber mail is set to oust old-style postman

If you can’t beat ’em, join ’em: Post Danmark has made a decisive investment that may, in large part, determine the future of the ubiquitous red post box and uniformed deliverer.

With a DKK 70 million investment in ‘E-box,’ the national postal service has taken its final step in the direction of regular electronic-post delivery.

As business daily Børsen reported last Friday, Post Danmark has sat in the proverbial wings and watched as internet and email communication avenues ate a substantial part of the postal service’s core customer base. With its investment in E-box, Post Danmark hopes to defeat its potential enemy by becoming an ally. By the beginning of 2003, Post Danmark will offer its customers the possibility of sending electronic letters rather than traditional letters via post.

Post Danmark has become a one-third owner in E-box, which was established in March 2001 by KMD (Kommune Data) and DMData, which is jointly owned by Danske Bank and Mærsk Data. Businesses sending post via E-box will pay just 80 øre per letter, saving substantially on postal costs.

‘This (investment by Post Danmark) is the stamp of approval for E-box. Several banks have already hopped aboard the project, and after 1 October, an additional 120 financial institutions will be involved. But Post Danmark’s participation, in particular, opens up a whole new market for us,’ said Henrik Andersen, administrative director of E-box, in an interview with Børsen.

While Post Danmark’s investment in E-box gives the postal service access to a potentially lucrative market, critics warn that the move may set Post Danmark up for a corporate cannibalisation of its own market. Post Danmark currently handles approximately 1.4 billion letters per year: according to Børsen, approximately 220 million of these are variants of the traditional corporate window envelopes that will be aggressively targeted by E-box.

‘There’s no doubt that a large percentage of these letters will not physically exist within the next few years. There will, of course, always be those individuals who prefer to receive their letters the traditional way, and that possibility will remain open to them,’ said Knud Børge Pedersen, vice administrative director of Post Danmark.

The bite of internet and email has driven Post Danmark to lay-off 2,000 employees annually over the past two years. The situation may worsen. If the total market for window envelopes goes the way of electronic mail, Post Danmark stands to lose 15% of its annual volume in letters per year.

‘Naturally, we’ll need fewer employees to sort and ship letters in the future, but we can’t work against the tide of progress. This (investment in E-box) will open up some exciting new possibilities,’ Pedersen said.