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Denmark’s postal service doubles losses

Postnord, the company responsible for distribution of Denmark’s post, has doubled its losses during the first half of 2017.

Denmark’s postal service doubles losses
Photo: Henning Bagger/Scanpix

The company’s turnover has also fallen, reports broadcaster DR.

The company, which has 60 percent Swedish and 40 percent Danish ownership, lost 748 million Swedish kronor (78 million euros) during the first hald of 2017, more than double the amount 304 million Swedish kronor (32 million euros) loss from the same period last year.

“The result is affected by strong digitalisation in Denmark, which has not been balanced by increased logistical turnover and turnover adaptations in delivery operations.

“We continue to work to implement an economically sustainable production model, which during the next few years will give Postnord Denmark the capability of being profitable,” the company wrote in relation to its Danish operations as it reported results.

Turnover for the company has dropped by ten percent to 4.3 million Swedish kronor (450,000 euros) during the first half of 2017, according to DR’s report.

Postnord cites digitalisation, with both private customers and businesses turning to email and Denmark’s secure digital mail system Eboks, as the basis for the decrease in turnover.

“In Communication Services [post, ed.] comparable turnover fell by 27 percent, since the amount letters delivered by Postnord Denmark fell by 23 percent due to increased digitalisation,” the company wrote.

In addition to the decline in mail, Postnord still employs several thousand numbers of civil servants who are very difficult to lay off, reports DR.

The company was merged with its predecessor, the originally state-owned Post Danmark, in 2009, and in 2016 much of Denmark’s postal services switched from the traditional red and mustard colours to Postnord’s light blue.

The company’s problems are likely to lead to political intervention, according to the report.

Over 1,600 employees in Denmark will be made redundant by the company by the end of the autumn, according to DR.

READ ALSO: Denmark's postal service just got even worse
 

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PostNord to continue Danish deliveries until 2023

The Danish arm of Swedish-Danish post distribution company PostNord is to continue delivering the country’s post until at least 2023 after a new deal was agreed with the government.

PostNord to continue Danish deliveries until 2023
PostNord will deliver Denmark's letters until at least 2023. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Post Danmark – the Danish subsidiary of PostNord – extended its contract to deliver post in the country with the government and its allied left wing parties, the transport ministry confirmed in a statement on Monday.

“Distributions of post is an important societal task which every sitting government must take responsibility for,” transport minister Benny Engelbrecht said in the statement.

A “large proportion” of people in Denmark still “do not receive their post digitally and therefore need to receive their post at their home address,” Engelbrecht said.

“It must be possible to receive a letter from your family and to write to your family, regardless of where in the country you live.

“That’s why the deal with Post Danmark has been extended, so Danes can be reassured that post will get through while political work to secure a new, long-term postal agreement continues,” the minister said.

The Danish government owns 40 percent of PostNord, with 60 percent owned by its counterpart in Stockholm.

The company has faced sharp criticism on several occasions since it began announcing losses in 2012. The Danish state has spent to keep the Danish side of the company afloat. Inefficient mail distribution and poor financial management have been among the criticisms.

PostNord was established in 2009 via a merger of the formerly-national Post Danmark and Sweden’s Posten.

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