Currency converter
News Feed
News Search Topics
Use filter
You can filter your feed,
by choosing only interesting

Expert Opinions

This content is available for viewing on PCs and tablets

Go to main page

Roundly criticized Russian Post set for reform

November 19, 2013, 20:10 UTC+3 Alexandrova Lyudmila
© Photo ITAR-TASS/Mikhail Metzel

MOSCOW, November 19 (Itar-Tass) - Last Friday a friend of mine resident in Moscow, Yelena, opened her post box to take out a letter signed by the mayor of Moscow Sergey Sobyanin. Wondering why the newly elected mayor was so eager to address her in person at a time when the election had already taken place, she opened the envelope. In the message, Sobyanin, who at the moment of writing the letter was still one of the candidates, was urging her to go and vote.

“I've always known our postal services leave much to be desired, but that's just ridiculous!” said angry Yelena. "It took the letter more than two months to travel from the centre of Moscow to the outskirts."

This case is far from exceptional. Journalists of one of the central dailies arranged an experiment a couple of years ago and eventually gathered heaps of such sad testimonies. A letter from Australia reached a Moscow recipient faster than a postcard from a neighbouring district.

The Russian Post has also become infamous outside Russia, primarily because of outrageous delays in delivering goods Russians order from international online shops.

One cannot be too lazy to criticize the Russian Post. Even Russian Prime Minister Dmitry Medvedev admitted at a meeting on Monday, devoted to the company’s development strategy till 2023, that its operation was appalling and might soon breathe its last unless urgent measures were taken.

“The Russian Post faces a storm of criticism and an avalanche of complaints,” Medvedev said. The picture he drew was grim, indeed. “People have to wait for parcels and letters for months. Sometimes mailings never reach the addressees to end up at a local dump.” Unless Russian Post undergoes fundamental reorganization the system will probably exhaust itself and be doomed to disappear, he added.

According to Medvedev, it was corporate problems that brought about such a disaster, among them flaws in management, out-of-date infrastructures, and a large amount of manual work in processing correspondence. Still worse, postal employees’ salaries are almost half the Russian average.

To make the Post comply with the world standards the Russian Ministry of Communications and Mass Media has drawn up a development strategy approved by the PM. The main ways of reorganization are to improve the quality of service, to corporatize the Russian Post, to upgrade logistics, and to develop banking services.

In 2014 the Russian Post, currently a state unitary enterprise, will be reorganized into a state-owned open joint stock company. The government is not going to privatize it until 2018. However, this option may appear on the agenda after that. Establishing a Postal Bank is one of the most controversial ideas of the the strategy that caused a heated debate.

Investments in the reorganization of the postal operator till 2018 should total 145 billion roubles (about $4.5 billion). The project suggests not state spending but attracting private capital, Deputy Minister of Communications, Mikhail Yevraev said.

“Implementation of the strategy will be financed via loans, bonds, proceeds from selling some assets and possibly investments from partners,” said the post’s chief executive Dmitry Strashnov.

Private investors may be interested in the Russian Post amid developing online trade, experts say.

General reorganization is planned over five years and total transformation - by 2023, when the company should rank among the top five postal operators by net profit margin (9 percent against 1 percent in 2012). The project suggests the reorganization be guided by the expertise of the European counterparts - Dutch ‘PostNL’, German ‘Deustche Post’, Italian ‘Poste Italiane’ and French ‘La Poste’. According to the project, the reforms should build up the company’s value to 230 billion roubles (about $7 billion) by 2023.

It is hard to evaluate now how soon Russians will be able to feel the difference. Most Runet users are rather pessimistic about the reform. Yet, on August 1, Yevraev pledged that the time of delivery of letters and packages from Russia to any corner of the world and back is to be cut fourfold in the following five years - from 40 days to ten. The term of delivery within Russia should be reduced from ten to five days, within one city - from seven days to two.