Draconian Postal Institution Promises To Change

The post office in Iceland has an infamous reputation. First of all, there’s the fact that when residents receive a package, they are notified by means of a slip of paper, which is often lost. If they leave the package at the post office for this or any other reason, they have to pay a fee for collecting a parcel late, or worse, risk having it returned to the sender without notice. Either way, the fee to collect the parcel, whether or not it is late, amounts to more than the parcel’s actual worth. It’s a nightmare.

But it looks like this may change.

Last May, Ingimundur Sigurpálsson left his position as CEO of Pósturand Birgir Jónsson, (whom you may recognize as the drummer for the band Dimma) took over. From the outset, he had the goal of changing things for the better. He says he took the job because he likes a challenge. “It’s a high profile business problem,” he says. “It’s a very challenging thing, a relatively big company in a tight spot.”

Big plans

The Grapevine met with Birgir to discuss his ideas to improve the state of the post office. His plan is twofold.

First, he plans to remedy the business side of things. “The post has been bleeding money,” he says, adding that it has been necessary to request additional funding from the state. He wants to restructure the company from the ground up. “We have already changed the executive management team,” he says. “Since I have been there, we have hired new managers and made the company a lot more efficient.”

He also plans to sell subsidiary companies. “We have been criticized a lot because we own a lot of them. We are in the process of selling those and pulling back a little.” He hopes these changes will be seen as an olive branch to customers. “I would like to show that we come in peace, at least.”

“The good thing about this industry is that we don’t have to reinvent the wheel. We just have to look at other countries and do what they’re doing.”

The more interesting part of his plan, he says, is fixing the service and getting it up to the same level as neighbouring countries. “The good thing about this industry is that we don’t have to reinvent the wheel. We just have to look at other countries and do what they’re doing.” The focus for the next 12 to 18 months will be to rise up to that standard, especially with their parcel industry.

Thus far, this work has been easier than he expected. “I thought I was going into this kind of very wooden, dusty institution. It’s not like that at all,” he says, adding that there are a lot of people on every level of the company who have ideas that, for some reason or another, the previous management team would not implement. He also had expected to need to make a lot of staff changes, but he has only had to lay off a total of 18 people, all in the management sector.

Settling on the price

One major criticism of the post office has been how expensive it is. Birgir speculates that the inefficiencies of the business were always directly reflected by price. “Sometimes there were good reasons for price increases, but the business was not run as efficiently as it could have been.” He went on to say that he can’t make any promises about cutting the price for the post. However, he is willing to promise that they will give back the value for money by raising the service. He also said that as soon as his team get the post into profit, he is sure they will have enough leverage for them to decrease prices. “To be honest that will be a big reward for me and my team, because that will mean we did a good job of turning the company around.” He says, smiling, “I really hope we can meet in 12 months time and we can talk about lower prices.”

What took so long?

Birgir met with Hanna Katrín Friðriksson, along with the chairman and the vice-chairman of the board, on Monday, September 2, in front of the Transport and Communications Committee. Hanna asked, essentially, what took the post office so long to make these changes. “I can’t answer that. I don’t know. I’ve been there for three months,” Birgir says. “I can say we are doing it now.” He smiles.

The general auditor of the state released a report in June, which shined a light over the past problems and issues with the post office. Birgir found this report helpful, because it highlighted a number of areas that needed improvement. So he devised a plan to fix the areas that the report highlighted. However, he still has to contend with the free market. “It is changing a lot over the first of January because we are losing our monopoly,” he says, referring to legislation that recently passed. Birgir says that his official position on this legislation is neutral. “If the state wants to pull the company out of the competition market, then it’s fine by me.”

The future

The post office doesn’t have a lot of time. “We are almost technically bankrupt,” Birgir says, adding that the state gave the company about 1.5 billion ISK which will have to get them through this year. After that, they have to stand on their own feet.

In that timeframe, he hopes that people will see and appreciate the changes he implements. “It will always be too slow, and we will never be good enough, but I hope people will see progress.” As for the business side, he is optimistic. “I’m pretty sure we will be operating with a profit next year, based on the restructuring programs. I think the main business of the Icelandic post is the parcel business. So I think the focus is going to be on that for a while.”

Hopefully, one day that means no more paying ridiculous fees.