Estonian Post expands parcel terminal network into Latvia
Estonia’s main postal service company Estonian Post has expanded its parcel terminal network Post24 into Latvia. Its parcel terminals can now be found in all major towns in Latvia.
Parcel terminals enable customers to send and receive packages at special terminal areas, located in different shopping centres, working on a self-service basis.
Meelis Atonen, Chairman of the Board of Estonian Post, said that in a logistics service it is all about the scale of business – the more parcels there are to send, the better prices you can offer. That is why the company has been very active in expanding its parcel terminal network in recent years.
Their competitor, Itella SmartPOST, thought that expansion into Latvia is quite risky. “There is already a local postal service company plus another player in the market. In Lithuania, there are three companies in this business. One may believe that this competition will be very fierce and some will be left with no space in the market,” said Risto Eelmaa, managing director of Itella SmartPOST OÜ.
Eelmaa added that despite the fact that Latvia and Lithuania have larger populations, its package market is the same as Estonia or even smaller. Estonia’s population is 1.3 million compared to Latvia’s 2 and Lithuania’s 3 million inhabitants. Eelmaa said that Itella started making a profit in Estonia only when it had a 30% market share. “We have also considered expanding into Latvia and Lithuania, but we thought that making a green entry would be very expensive and risky. That is why we decided to focus on our home market Estonia as well as Finland,” he added.
Estonian Post’s Post24 network has in total 113 package terminals, including 50 in Estonia, 35 in Lithuania and 28 in Latvia. The state-owned company plans to invest 15 million euros in the development of its services in all three Baltic countries. In Lithuania, Estonian Post has bought one of the largest logistics company Unipakas UAB, through which it is operating in Latvia.
Source: Nergi, A-M. (2013). Eesti Post laieneb hoogsalt Balti riikides. Eesti Päevaleht, 30. jaanuar