Polish Post not ready for full competition, says watchdog
Polish Post took too long to modernise and missed the chance to benefit from the opening of Poland’s postal market, according to a damning report from parliamentary watchdogs. The Supreme Chamber of Control (NIK) was commenting just six months before Poland’s postal market is completely opened to competition. At present, private sector firms are not allowed to deliver letters under 50g.
The NIK said Polish Post has not done enough to respond to the liberalisation of the market, failing to transform its infrastructure or work force, to optimise costs and revenues.
As a result, it has been “impossible” to improve quality of service, said the NIK report.
Polish Post, the universal service provider, did transform from a state utility to a state-owned public company in 2009, but the NIK criticised its lack of progress in the mean time and said the move to a business-like structure did not lead to expected improvements in the company’s image.
The company has not achieved the main strategic goals set by its external advisors, and restructuring was carried out with delays.
Access to postal services remains “limited”, said the watchdog that reports to the upper chamber of the Polish parliament.
Only 20 post offices in Poland are open around the clock, with many in rural areas open only 8am to 3pm, while the NIK said the network of 8,423 post offices (2011) was about 224 fewer than regulations required.
The NIK noted that mail carriers have little incentive to ensure parcels and registered letters are delivered to homes, but the limited opening hours at post offices make collections difficult, while forcing people to collect items in post offices was adding to queues and waiting times.
The Parliamentary watchdog also slammed Polish Post for its “wasteful” handling of the restructuring process, stating that the company produced three different business strategies that were never used, spending PLN 7.5m ($2.2 USD) in the process, and splashing out PLN 13m ($3.8m) on a property management IT system that did not work correctly.
New board
Last July, Polish Post appointed a new board to develop key restructuring initiatives. The company is currently planning a rebranding exercise and improvements in customer service up to 2015, with a particular development of package and courier services, ecommerce services and services linking traditional methods of communication with the digital world.
Commenting on the NIK report, Polish Post said “substantial” restructuring efforts began last year, and pointed out that the report highlighted a PLN 159m ($46.6m USD) profit achieved in 2011, turning around a small profit seen in 2010 and a PLN 200m ($58.7m) loss made in 2008 and 2009.
Polish Post accepted that the watchdog had suggested it was “still not ready for operation in a liberalised market”, and said it would carefully analyse the NIK report.
The company said under its new strategy, it was planning on doubling revenue from parcel and logistics services, and also increasing revenues from financial services to counter the decline in mail volumes and advertising revenue.
A new organisational structure was adopted in January this year, simplifying the network.
Polish Post said it is also currently working to be more responsive to the needs of the market, adding new parcel products this year and delivery notifications via mobile phones.
