Last year, state-owned mail delivery company Eesti Post incurred a loss of €1.8 million from providing the universal postal service — that is, home delivery of letters and parcels. While its international parcel business is profitable, the company ended the year overall with a net loss of half a million euros.

The Ministry of Regional Affairs and Agriculture has now sent a draft of the new Postal Act for interagency review. Among other changes, the new law aims to make the universal service less of a financial burden for Eesti Post. Currently, the service price is set by the minister and must remain affordable for consumers. Under the new proposal, Eesti Post would be allowed to propose its own pricing, provided it is approved by the Competition Authority.

Eesti Post had also hoped the ministry would ease the requirement for how frequently mail must be delivered to homes. CEO Martti Kuldma discussed the matter in early June on Vikerraadio.

"We've submitted our proposals to the state, but the final decision lies with the owner. From a cost perspective — whether we need to deliver five times a week or just twice — there are substantial savings to be made. In some service areas, we could be talking about cutting volume costs by up to half," Kuldma noted.

However, the ministry did not grant any such relief. As is currently the case, people will continue to receive mail in their mailboxes five days a week.

"When we look at the legislative amendment as a whole, on one hand it must reflect the operational capabilities of Eesti Post so that the service is more financially viable. On the other hand, we must also consider consumer expectations and protect their interests. This draft is essentially a balancing act between the goals of all stakeholders," said Sigrid Soomlais, deputy secretary general at the Ministry of Regional Affairs and Agriculture.

Eesti Post's management hopes to return the company to profitability by the end of the year. Soomlais said this is possible even without reducing the frequency of home delivery.

"The management board is reviewing and has already begun implementing various optimization measures. Mail delivery frequency isn't the only potential area for savings. According to last year's figures, this is a company with €141 million in revenue. The board certainly has several avenues for cost-cutting and has already started putting that plan into action," the deputy secretary general said.

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