Russian CEP market maintains growth despite financial crisis
With annual growth rates in the 30% – 40% range in recent years, the sector benefited strongly from booming demand.
Read MoreTag: Russia Post
Russian Post moves into the black with profit in 2008
The company expects a net profit of EUR 11.59 million in 2008.
Read MoreRussian Post and Microsoft Rus sign cooperation deal
Russian Post and Microsoft Rus, the Russian subsidiary of the global Microsoft Corporation, have signed a cooperation agreement to modernise the outdated IT infrastructure of the Russian public postal operator.
The deal is part of Russian Post’s three-year programme to reduce losses and to modernise infrastructure and services. The modernisation programme was announced by Russian Post CEO Andrej Kazmin in April this year.
Under the agreement, the two companies will implement several projects in key areas that include among others developing IT solutions for monitoring electronic resources, establishing a unified e-mail service as well as exchanging technological and marketing information. The important steps include creation of software for information telecommunications infrastructure that comprises components designed for carrying out applied software operations.
Russian Post, with a network of 42,000 post offices and 415,000 employees, handles more than 1.5 billion letters and 48 million parcels every year.
Read MoreIndex of Postal Freedom Russia
The market for Russian postal services is growing rapidly and was valued at about $1 billion in 2003, with Pochta Rossii accounting for 80 percent of that number. Today, delivering letters makes up only 20 percent of the post office’s income.
Technically speaking, the Russian postal market was opened to competition in 1996 when the Ministry of Communications removed the state monopoly on postal services.
The Russian government is now a major source of business for Russian Post. Certain large streams of mail from other government agencies, like the delivery of 60 million pension checks annually, are routed through Russian Post.
Most of its revenue, however, comes from delivering goods. There are some local delivery services in Moscow and St. Petersburg.
Competition with international carriers for lucrative and strategically important package delivery and logistics services is concentrated in the western hub regions of Russia. This is a booming market, and DHL Worldwide, TNT, FedEx, UPS and others are all involved.
In 2004, Russian Post launched its own national express mail operator (EMS — Russian Post) with prices that are 20% lower than competitors on average. EMS relies on its connections with the regular postal network and touts deliveries made “door-to-door.” More than 42,000 post offices throughout Russia make EMS deliveries, and 5,500 post offices in Russia accept EMS items.
It is unclear whether Russian Post subsidizes EMS with proceeds from traditional mail. Even though the Russian government eliminated the state postal monopoly in 1996, PR still controls 80 percent of the postal market and so has sufficient market dominance to build EMS on the backs of ordinary stamp-buying consumers.
EMS claims annual revenues in the area of $300 million and an annual growth rate of 30-40 percent.
Firms like Western Union compete in the money transfer business against PR’s Cybermoney system. PR rates are set to undercut the competition by as much as 35 percent.
Privatization
In 2002, Minister of Communications and Information Technology Leonid Reiman told Prime-TASS in an interview that “There are no plans for privatizing Russia’s postal service in the near future,” although he added that there remained a possibility that it might be reformed into a 100-percent government-owned company.
Current law does not allow for the privatization of postal service companies. In 2006 Reiman told a Cabinet session that of the many countries that tried to privatize their postal services, few succeeded. “For example, the U.S. Postal Service is a government corporation and is subsidized from the budget to perform socially important functions.”
Read MoreRussian Post changes tariff rates for letter correspondence delivery
Beginning with 1st of June Russian Post changes tariff rates for universal postal service (cards, letters, packets delivery). The Federal Tariff Service issued the corresponding decision îf April 25, 2008.
Delivery of ordinary postcard is to cost 5 rub. 50 cop.(4 rub. 75 cop. before), registered card 8 rub. 00 cop. (6 rub. 60 cop. before), ordinary letter weighs to 20 g 7 rub. 50 cop.(6 rub. 50 cop. before), registered letter weighs tî 20 g – 12 rub.00 cop. (9 rub. 90 cop. before), letter with insured value weighs to 20 g – 40 rub. 00 cop.( 32 rub. 90 cop. before) correspondently.
Despite of indexation tariff rates for universal postal services don’t cover net price. Tariff rates indexation helps to reduce Russian Post losses of the service partly.
Last time tariff rates were adjusted according to an index one and half year ago in 2006.
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