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Lithuania Post CEO on future strategy

March 11, 2016

Left: Lina Minderienė,
CEO of Lithuania Post

 

 

Following a successful 2015 that saw parcel volumes grow by 12%, Postal Technology International spoke to Lina Minderienė, CEO of Lithuania Post, about the company’s plans and the condition of the post and parcel market in the country.

Did Lithuania Post turn a profit in 2015 and how did it cope with difficult market conditions?
According to unaudited tentative data, Lithuania Post will have higher profits for 2015 than 2014. The need for traditional postal services may have decreased, but new technologies allowed residents to use e-commerce in a simpler way, leading to an increase in the total number of postal items. Last year, more than 60 million postal items were sent and received via Lithuania Post, a 12.5% increase over 2014 when we handled more than 53 million items.

The growth in postal items was influenced by Lithuania Post’s collaboration with international logistics and transport companies that work with major e-commerce platforms in China. Nearly half of all the items received from abroad via Lithuania Post came from China with the view of being delivered to EU countries, Russia and other states.

Lithuania Post’s collaboration with China is useful not only to the company but to the whole economy of the country as well. As the flow of postal items increases, Lithuania Post financial indicators ameliorate, which consequently has the influence of improving working conditions, taxes and dividends to the shareholder (the state). Due to the increase in the number of postal items in the country, additional transport resources are also being sourced.

The geographical position of Lithuania is attractive to our partners in China because it is convenient to ship postal items to the EU countries, Russia, Belarus and to other European states.

How does the postal market in Lithuania differ from elsewhere in the world?
If we compare a number of potential customers of Lithuania Post with countries such as the UK, Germany or neighboring Poland, we will see that the postal market is not very big. In Lithuania, the postal services market is competitive as there are approximately 70 operating entities, out of which 80% provide the same service.

Lithuania Post is the biggest postal services company in the country. Surveys have shown that 98% of people are aware of our company, and that 82% have used our services at least once. We have the widest network of postal access points and provide not only postal, but also courier and financial intermediation services as well.

According to 2015 third quarter (Q3) revenues, Lithuania Post accounted for more than a half (57%) of total revenue for postal services from all suppliers.

What is the scale of Lithuania Post’s operations?
Lithuania Post offers the widest range of options in the country to send and deliver items including almost 700 post offices and a network of 80 self-service LP Express parcel terminals operating 24/7. The Lithuania Post team serves more than 800,000 customers each month.

What are the challenges of delivering LP Express packages to 22 other European countries?
It is possible to send items via the self-service parcel terminals LP Express not only within Lithuania but to other European countries too.

Our LP Express terminals allow packages to be
sent internationally as well as domestically. The volume of items sent abroad via the terminals increases every year. However, people still prefer the traditional way of sending items abroad via post offices.

Shipping international items is the responsibility of postal operators in both dispatching and receiving countries. Because of this, we tend to seek close cooperation with partners abroad so customers are satisfied with the quality of delivery.

What more needs to be done to ensure the long-term success of Lithuania and subsidiary Baltic Post?
First of all, we have to be vigilant in observing ongoing changes in the postal services sector – rapidly changing customer habits, needs and expectations. We cannot ignore them if we wish to remain leaders.

It is important to realize that it is not service providers that command conditions in the market anymore, but customers, who want flexible, convenient and modern choices.

It is obvious that the modern-day customer is not inclined to adapt to the service provider’s working hours and stand in a queue to be served. We have to constantly search and introduce new options and create the conditions that allow customers to use postal services at the most convenient time.

Last year we offered our clients a new service – the opportunity to redirect and collect incoming items at the self-service LP Express parcel terminals. Currently, we are testing personal parcel lockers that are installed near our customers’ homes. This means that customers will no longer need to go to a post office or wait at home for a courier in order to collect an item.

How can the company ensure it remains competitive?
Remaining competitive is only possible when you learn to adapt to a changing business environment. As the traditional postal services market recedes, postal operators have to search for new activity niches where they could widen the spectrum of services offered. Today, Lithuania Post is not only a mail sending company but provides a range of financial services and is engaged in retail trade.

Over the last few years we have paid a lot of attention to international collaboration and items shipping. E-commerce will continue to grow rapidly, and we have to reorganize our processes in order to be able to deliver growing amounts of items each year, including goods acquired in both Lithuanian and foreign e-shops. At present, international cooperation is mostly being developed with neighboring countries.

It is also essential to broaden the choice of self-service and electronic services as it is one of the ways to meet the changing needs and expectations of modern-day customers.

What is your vision of how the postal market will develop in the future?
In my opinion, e-commerce will change the face of the post even more. It is estimated that in Lithuania alone the e-commerce market increases by 17% each year. According to statistics, almost a third of Lithuanian residents were shopping online last year. The result of e-commerce development is the increase in the number of items being shipped by post. These tendencies demonstrate that in the future, the sending of traditional paper letters, such as handwritten information, will be replaced by shipping items and parcels.

In future there will also be a bigger need to transfer postal services to the self-service and virtual space. Those residents who shop online instead of going to shops won’t be willing to go to post offices. Postal operators will have to compete hard with courier services in order to ensure a fast and high quality delivery service.

E-commerce has shaped the market over the past decade. What other technologies will have an impact on the postal sector?
In the future the postal services market will use unmanned aircraft as an additional logistics means in the common delivery chain. Trials have shown that unmanned aircraft are the most appropriate delivery method for transporting light items in remote locations.

What technologies do you believe are most important to a postal operator in the current market and why?
Modern information technologies have had a major influence upon significant changes in the postal sector. The post had to step aside for the more rapid communication and information transfer mechanisms, and as information exchange moved to the virtual space, the demand for traditional postal services decreased.

In the internet era, the post has to not only withstand a lot of challenges, but also accept new opportunities. With the help of innovations, entirely new services and products are being created and the processes are changing. The current advancements in modern technology are a pathway of changes constantly requiring the development of expertise in the digital environment. This requires posts to create a functioning postal network, not only in the physical world, but also virtually, both locally and internationally.

Are there any projects that Lithuania Post is looking to implement in the near future?
We are currently implementing a pilot project using personal parcel lockers that provide people with a new way of collecting their items. This could be a great alternative for those residents who often receive large or registered items and have to go to a post office to collect them. It will be possible to collect the item from modern personal lockers – that are locked with an electronic key – near to the customer’s home and at convenient time. The personal lockers are bigger than the usual lockers and can contain a greater number of items as well as larger packages.

This year we will also put a lot of attention into working with two electronic services. The first is a self-service system that allows business clients to prepare their postal items without leaving the office, before finally depositing them at the nearest post office.

The business customer is required to enter the necessary data online and affix a special printed sticker on the outgoing postal item. Such a postal item only needs to be handed to the postal worker serving the company or organization, or presented at a post office, to be sent.

This electronic service not only allows customers to prepare items for sending but also to track the status of all the registered items that have been sent and order additional postal services while connected to the e-self service account.

The e-self-service system will automatically verify entered addresses, and will assign postal codes for items being sent in Lithuania, whereas for items being sent abroad, the system will assign the necessary customs documents and will indicate the right way to fill them in.

The second innovative service to be developed is the e-delivery that allows residents, business clients and public bodies to securely send documents and share other important information and data electronically.

The e-delivery service has already been introduced, and our ambition is to attract more residents, business companies and public institutions to electronically send documents safely and share other relevant information and data.

We are also continuing to strengthen our position in the financial services market, performing important and necessary daily financial operations. Last year, we offered residents a payment account with Lithuania Post, which allows them to receive their salary from an employer, deposit cash, conveniently process payments and pay for postal services. This year we plan to include the option of making payments electronically from their Lithuania Post payment account, as well.

Interview by Daniel Symonds

March 11, 2016

 

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