Russian president Vladimir Putin has intervened in the modernisation of the country’s postaloperator by declaring that its targets can only be achieved through higher funds or raising prices.
During a meeting with Russian Post’s authorised representatives last week, Putin admittedthat the Russian postal operator is not efficient enough and intends to further discuss the matterwith the government. He confirmed that the postal industry needs state support and considerableinvestment. “The post urgently needs to develop its technological base and increase wages,” hedeclared.
Due to over 20 years of under-investment, the production capacities of Russian Post are wornout by more than 60 per cent, which prevents proper quality, while 80 per cent of the basictechnical equipment has been used for 15-20 years. Half of the 40,500 post offices need to berenovated urgently while 10 per cent of those are in a nearly disastrous state, according to thepresident.
“There are problems indeed,” Putin stressed. “The industry is not in the best situation andthe technological development is not going forward at the pace it should be. What is necessary iseither strong budgeting or price increases but both are difficult solutions from the political,social and economic perspectives. But I agree that it needs to be done and a development programmeis necessary.”
The presidential intervention was welcomed by Russian Post CEO Alexander Kiselyov. “RussianPost implemented the modernisation programme for its postal infrastructure back in 2009 which hasbeen approved by the Federal government. But until now, no funds have been allocated from the statebudget to implement the respective measures. We also prepared a development strategy for RussianPost up to 2016 but this is still awaiting approval. We hope that the active position of VladimirPutin will contribute to quickly solving the issue of Russian Post modernisation,” he said.
Russian Post stressed it has been using all possibilities for modernisation. However, itsdouble status as a commercial, self-sustaining enterprise on the one hand and a social institutionon the other hand is rather an obstacle to its modernisation efforts, the company explained. Itprovides an enormous range of services at prices below cost, subsidising its social activities onits own through annual compensation worth around RUB 13 billion (€319 million), gained oncompetitive markets, for the losses not covered by the state from socially important services.
In addition, Russian Post said it spends over RUB 5 billion (€123 million) on maintainingabout 30,000 unprofitable rural post offices. This results in a severe shortage of funds formodernisation and wage increases with the postal operator being on the verge of profitability.Increasing the wages of its 360,000 employees alone would require additional RUB 9 billion (€221million) which equals Russian Post’s annual investment budget. If it lacks this money, it won’t beable to modernise any post offices, purchase any new vehicles or trains to replace the old ones.Therefore, it is crucial to resolve the issue of state support as soon as possible, the postaloperator stated.
Meanwhile, Russian Post is gearing up for its forthcoming peak season. In anticipation ofthe busy New Year holiday period that starts on New Year’s Eve and runs for the following 10 days,the postal operator has taken special measures to cope with the peak end-of-the-year volumes. Theseinclude increasing limits on mail transportation by air and special charter flights, additionalpostal trains and vehicles, increasing frequency of existing postal routes, additional staff toprocess shipments, additional equipment for international postal exchange points and expandingtheir production area.
Russians traditionally exchange presents on New Year’s Eve which is the major festive eventduring the New Year holiday period. Russian Post said it is doing its best to deliver the greetingsand presents on time for the New Year.
International shipping volumes from abroad, in particular, are growing rapidly duringDecember. This month, Russian Post expects to deliver around 2 million incoming internationalshipments to Russian citizens, which is more than double the peak volumes of the same period lastyear.
To speed up the flow of international letters and parcels, the Russian postal operator hasbeen working with other international postal operators to decentralise the flow of mail shipmentsto the regions. From next year, for example, mail coming from South-East Asia will be re-directedto Vladivostok, mail from China to Novosibirsk etc.
During this year, Russian Post continued to develop its production capacities. Inparticular, it has upgraded and expanded the infrastructure of international postal exchanges withan investment of nearly RUB 500 million (€13 million).
During the peak holiday period last year, Russian Post managed to handle 97 per cent ofinternational incoming shipments on time, 2.5 per cent with a delay of up to two days and 0.5 percent with a delay of more than two days. “This good result is likely to be achieved this year aswell,” Russian Post stated. In cooperation with the Federal Customs Service, it developed a jointaction plan to cope with possible unexpected situations.
