Strategy focusing on parcels and mail
The e-commerce, parcels, and communication markets are changing radically. This is presenting both challenges and opportunities. PostNord's strategy focuses on its core business: parcels and mail.
PostNord's strategy is to win in parcel and to run a financially sustainable mail business. Adjacent businesses complement and underpin the core business. We intend to deliver on our strategy with the aid of five foundational enablers, and through five strategic initiatives. All efforts are based on the vision of becoming the favorite carrier of the Nordics, with our purpose of making everyday life easier.
Win in parcel
PostNord is setting its sights on becoming the market- and costleader in the Nordic parcels market. That means being the largest (by volume) in Sweden and Denmark, and the second largest in Norway and Finland. Cost leadership is defined as the lowest cost per parcel in all delivery channels, that is, to homes, parcel lockers, distribution points, and businesses. To succeed in this aim, we need to constantly improve our offering, and the customer experience and perception.
Financially sustainable mail business
PostNord is the proud provider of the universal postal service in Sweden and Denmark. Our strategic priorities are to adapt our mail business, deliver on our universal service obligation, and run a financially sustainable business.
With fewer letters being sent, revenue is decreasing and the cost per item sent increasing. PostNord has made a number of changes to address the decline in volume, one of which has been to introduce alternate-day deliveries in Sweden. In addition, the State's requirements of, and procedures for, the postal service need to change.
A number of business areas complement the parcel and mail businesses. Groupage is based on consolidating parcels and pallets into one delivery. This is an important arm of support for the parcel business. With Full & Part Loads, a vehicle or other cargo space is filled completely or partially. This includes simple and flexible solutions for customers who ship heavy goods (2,500 kg or more) and the delivery goes directly to the recipient without being handled at a terminal.
In addition to strengthening the main business, our adjacent businesses generate their own revenues and profits. PostNord's reach enables us to operate as a full-service provider, even to companies and organizations with wide-ranging and complex logistics needs.
Leadership and culture influence how we think, take decisions and act. Being accountable, brave and committed (ABC) is key to the success of the strategy.
Brand loyalty is crucial to PostNord in general and to our growing parcels business in particular. The fact that many people know us provides us with a strong starting position. The point then is always to maintain a focus on the customer and the consumer and to create positive experiences and associations. Our aim is to make more people appreciate and choose us, time and time again.
Cash management and courage to invest
The ongoing decline in mail volumes requires a strict focus on cash flow, a commitment of resources, and a willingness to invest in growth areas.
Data and technology
Data and tech serve both as an enabler and a strategic initiative. Optimizing operations and taking better decisions requires increased digitalization, automation and the application of advanced analytics. This is evident in areas such as dynamic pricing, AI-driven forecasting and planning, and precise
information to recipients on delivery times.
PostNord's updated sustainability agenda is helping us to realize our strategy and is making a significant difference to people and the environment. Our climate transition – shifting the business from fossil-dependent to fossil-free – is particularly business critical.
PostNord focuses on achieving the lowest cost per parcel. This requires us to constantly simplify and improve processes and production. At the same time, we need to be flexible to be able to handle large variations in parcel volumes. The market is characterized by fierce competition and customers expect the best possible value for money.
Develop and execute last-mile strategy
PostNord is gearing up to win the battle for the last mile – the last stage of the journey to the recipient. Here, we face tough competition from players in log-tech, as well as from newspaper and parcel distributors. The focus is on improving our offering and reducing the cost per parcel, for example by developing home delivery, parcel lockers and other forms of self-service.
Climate leadership is one of three commitments in PostNord's sustainability agenda. We are working in a concerted and structured way to set standards, reap the benefits of best practice and make shared decisions across the Group. Near-term challenges include higher fuel and commodity prices and the need to further commercialize sustainability, including through attractive offerings and customized information and reporting.
We must become even better at leveraging PostNord's collective strength. This applies to our customer offering, as well as to networks, operations and systems. This will create clear gains for major international customers. Truly Nordic is also important from a cost perspective. Where it brings benefits and is feasible, we will streamline and standardize, with the single goal of maximizing value and eliminating unnecessary costs.
Data and tech
Since last year, PostNord has been successfully operating a new IT strategy. Now, we are taking the next step in transforming the Company into one that is truly data- and tech-driven. This is vital if we are to up the pace of innovation, develop our customer offerings and compete with market participants that have emerged from data and tech.