Finnish postal group Itella is closing down its freight forwarding activities in Scandinavia in itslatest downsizing move to reduce costs and re-focus on core businesses.
The company is already in the midst of merging mail and parcel operations in Finland, withsome 239 job losses, and will drop the ‘Itella’ brand by changing its name to ‘Posti Group’ nextJanuary, returning to the Finnish name for the postal operator.
Itella said it plans to give up air and sea freight as well as its service warehouses inSweden, Norway and Denmark. The internal distribution logistics in the countries is also to beoutsourced. Up to 300 jobs could be affected in the three countries and negotiations will be heldto determine the need for reductions.
Explaining the pullout, Itella said it expanded in the Nordic region after 2005 as part ofits internationalisation strategy in logistics but a combination of the economic downturn andintense competition have weakened the profitability of logistics operations in the region.Moreover, Itella’s market share of the Scandinavian operations to undergo restructuring has beensmall.
“The profitability of operations in Scandinavia has not been at an adequate level and thisis why we need a new strategy. Itella’s goal is to ensure the profitability of its operations inall situations over the short and long term. The changes that are being planned now are necessaryto reach this goal,” said Senior Vice President Jani Jolkkonen.
Under its new strategy presented last year, Itella is focusing its operations on Finland,Russia and the surrounding areas. The group will concentrate on road transport between itscountries of operation, where it already has a firm foothold and the possibility to increase itsmarket share. Itella’s aim is also to develop its offering in road transport in selected marketareas in Europe.
