DIVERSIFICATION: Latvian Post earns half its income from postal delivery, the rest from other services.
RIGA - Despite the wide-spread use of the Internet within Latvian households, postal services remain the essential part of the country’s communication system. It is especially popular with the older generation. Over 92 percent of Latvians aged 65-85 rely on the post and the telephone as the main means of communication. The post is almost as popular among younger people. Despite the fact that 76 percent of Latvian teenagers consider letter-writing ‘old fashioned,’ over 90 percent prefer letters to e-mails on special occasions such as Christmas, New Year’s or Valentine’s Day.
Maija Plavina, a pensioner who lives in Daugavpils, one of Latvia’s largest cities, always makes sure to have spare stamps and envelopes around the house. “I am 76 years old,” says Maija, “and even though I consider myself a fairly modern person, I just don’t think that I will ever be able to learn the computer. Sometimes you can teach an old dog new tricks, but certainly not in my case. I live with my daughter, who is 42 and uses the Internet very frequently, but this certainly is not for me. First of all, none of my girlfriends have e-mails, so whom will I write to? And secondly, as soon as she switched on this box, I knew that there is no way I could ever learn to use it. Besides, I love writing and receiving letters. When I receive a letter I feel almost like I have talked to the person, but when my daughter receives e-mails it’s just so impersonal.”
Liene Plavina, Maija’s granddaughter who also lives in Daugavpils, used the postal services almost one month ago, around the New Year. “In day to day communication you just cannot beat the Internet,” says Liene confidently. “My grandma has lots of time on her hands, so she can wait for her letters to arrive. I am always busy with school and homework, and have many friends outside of Latvia. If I relied on the postal services for my communication I would probably speak to some of my friends 3 times a year instead of every day.” However, according to Liene, there are special occasions when the postal services are simply indispensable: “I hate receiving e-cards, and never send them to my friends. I make my own Christmas or birthday cards and always send them out via the post. It takes a while for them to arrive, especially during holidays, but the wait is totally worth it!”
The Latvian Post Office does not have an official motto, but the postal carriers are known and respected for their efficiency and perhaps can borrow the slogan of their American colleagues: ‘Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.’ Another surprising function of the rural postal carriers in Latvia is to carry the local news, in the direct sense of the word.
Development of the postal service in one way or another dates back to the invention of the written word. The invention of the formal postal system is attributed to ancient Persia, when Ahasuerus, king of the Persians, used couriers to communicate his decisions.
The present day Latvian postal operation begins with a strong foundation. Its roots can be traced as far back as the 13th century. Between 1237 and 1290, the Livonian Order had established its presence in Courland, Livonia, and Semigallia, which were populated by the proto-Baltic ancestors of the Latvian people. The postal services had been established between the Order and Hanseatic League towns to facilitate communication within the alliance, which was formed to protect the trade interests of its members. As a result, an impressive civil infrastructure has been developed and perfected over the centuries. In 1580, the Hanseatic League published Botenordnung - the first known rules on courier responsibilities and compensation structures. In the 16th century there were various postal services working in the territory of Latvia.
Due to the lack of a centralized mail delivery system, the towns, cloisters, universities and large merchants operated individual postal services.
The official Latvian postal service was established in 1632; Jacob Becker organized the regular mail delivery for the merchants. Initially, post offices had been privately operated by the postal worker. The revenue was gained from the mail delivery services as well as the annual subsidy by the Riga Town Council and the Vidzeme municipality governor. Later on, the local postal network became affiliated with the Stockholm postal services, while in the 18th century the first regular postal branch, from Riga to Narva, was established. The first Latvian stamp was issued on Dec. 19, 1918.
The postal service sector in Latvia is composed of a state-owned joint stock company, Latvijas Pasts, and over 30 private companies. Latvijas Pasts provides a wide variety of postal services to private individuals and companies, while the rest of the market players deliver additional postal services. There are various postal services available to the Latvian consumers: mailing services, press subscription, philately, direct mail and financial services. According to research conducted by European Industrial Relations Observatory Online, for Latvijas Pasts, postal services provide 50 percent, financial services – 20 percent, press services 17 percent, retail sales 11 percent, express mail and logistics 2 percent, postage stamps and philately services 1 percent of income to the institution. Latvijas Pasts is the largest Latvian provider of postal services. The company was established in 1992, initially as a non-profit organization. It has been licensed in accordance with the European Union standards.
It was very important to achieve close synchronization with European postal business cycles in order to achieve better organization of traffic flows across the region. Moreover, in 2004 Latvia became a member of the European Union, which means that it currently abides by EU customs regulations.
So far Latvijas Pasts has been developing organically, focusing on expanding service offerings and attracting strategic investors. Increasing operational efficiency, eliminating long waiting times and ensuring easy customer access to prompt and reliable services have formed the basis of the revenue generating model.
Besides Latvijas Pasts, there are several smaller players operating in Latvia. Some of them cover a variety of geographical regions, some focus on particular destinations. For instance, Latvian American Shipping Line (LASL) provides a small package service from the United States to Latvia. The company accepts personal packages for individuals in Latvia. LASL collects packages at Latvian centers throughout the Midwest, along the eastern seaboard and in southern California. Delivery to Latvia takes 4-6 weeks, and the deliveries are made to any address in the country.
Baltijas Pasts offer direct mail delivery. One of the service offering aspects comprise marketing info dissemination within a specific region or customer group. “Those types of postal services can be very useful to advertise the market newcomer, or the promotional campaign,” says Aldis Vitolins, who used mail distribution when he was launching his own hair salon three years ago. “It was very important to me to inform certain types of customers about my business, and mailing out info leaflets was the cheapest and most effective way to go.” Vitolins is not sure if postal services of this nature will be as effective today as three years ago: “To get the results out of direct mailing, the person on the receiving end has to be in the right frame of mind. The potential customer has to be curious enough to open the envelope and read through the ad, which means that he or she has to be in a more or less positive mood. Unfortunately, there have been quite a number of negative events in the economy lately, which reflects in the mood of the consumers.”
The world’s largest postal service providers, such as DHL and UPS, have also established strong presence in Latvia.