Postal service fees to increase 18 pct in September

The Ministry of Economic Affairs and Communication has approved a draft of regulations that will universally raise postal rates on September 1.

Ordinary letter postage sent to national addresses will rise from 0.45 euros to 0.55. The price increase applies to all universal postal services, which will raise 18.2% on average. Prices are also rising on both domestic and international letters and packages weighing up to 20 kilograms.

Eesti Post´s head of the Postal Services Division, Kaido Padar, said that the last change in pricing was in 2011, and rising costs mean that the company will not be able to meet its budget at the current rates by November.

“Over the years, customers’ needs have changed,” said Padar, whose company now goes by Omniva in its international transactions. “Expanded opportunities for communication has led to a decline in letter volumes in the service, but the requirements of the universal postal service has remained the same.”

Padar said that the volume of mail has declined steadily in recent years, roughly 10 percent each year. Six years ago Eesti Post handled 60 million pieces of mail a year. That has declined to roughly half that figure.

Another factor in the planned price increase is due to the rising wages of 2,000 employees over the last two years. Estonia will raise the national minimum wage rate at the beginning of 2015, which means that the company needs to raise additional money to meet their wage obligations.

In addition, Padar said international transportation costs have increase by 5-10 percent, and increase in the fees paid to other postal companies have gone up 3-5 percent per year.

The price increase will not affect the price of parcels delivered to terminals in malls and supermarkets, such as the Post24 package machines.

Source: ERR News

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