Joona Saluveer (left), the recently appointed chairperson to the Omniva board, speaks to Postal and Parcel Technology International about the company’s future strategy and the challenges of digitization.
How will your role change within Omniva?
I’ve worked at Omniva for six years, during which most of my time has been spent developing the businesses in Latvia and Lithuania. Now I have the opportunity to help shape the whole company on an even larger scale. However, the people I work with remain the same. We have a great and highly competent team with who I am happy to work with.
What are your plans for the future?
There is much to do. One of our goals is to modernize the postal network in Estonia and improve customer satisfaction. The 20th century postal office solution doesn’t work in the 21st century. People need their service close by and available at any time, not only within office hours. In Latvia, we’ve already managed to achieve world-class customer satisfaction. I believe that a similar effect can be achieved on a larger scale, but only if we provide a simple and high quality service.
We’ll also have to continue developing our worldwide international business which remains our fastest growing area. Last year we handled 3% of China’s cross-border e-commerce. In future, I think the sky’s the limit.
What has been your greatest achievement at Omniva?
With Omniva Latvia we managed to achieve fast growth and excellent customer service results. We measure customer service through the TRI*M marketing survey, which rose from a score of 89 in 2015, to 97 in 2016, all the while doubling our sales. This achievement has not gone unnoticed in the postal sector as we have been shortlisted for the World Post and Parcel Awards.
I have only been in my role in Estonia a short while but we have already restarted negotiations with the Ministry of Economic Affairs and Communications and the regulator about the price changes for universal postal services. Current postal law and its regulations are “historic” – they do not have that much in common with everyday life and the business requirements of the 21st century. It is our job to convince the government to loosen the rules so that we could provide most suitable services to people affected.
What are the main challenges you face at present?
Our first great challenge is to successfully replace our IT-system this autumn. This enables us to develop and customize our business and services more rapidly. So far, we have been forced to postpone many ideas that simply didn’t have the support of our IT system.
We are also looking to begin construction work for our new logistics center this summer with the office move scheduled to take place in the autumn of 2018. The new logistics center is key to making our processes more cost-effective and will enable us to handle growing volumes, especially since our current center is already too small for our prime volumes.
Right: A design rendering of Omniva’s new logistics hub in Tallinn
Can you name some of the challenges that you expect to face in the future?
In the long run, the biggest challenge is modernizing the postal and parcel service throughout the whole service chain. In future, we would like to provide the customer with a several options as to where they want to receive their shipment. This means implementing new technologies that helps us to get closer to the customer and offer more convenient services. To make this happen we need to cooperate closely with the government as outdated legislation is responsible for a lot of the outdated services.
What more needs to be done to ensure the long-term success of Omniva?
In my view, Omniva is a great example of transformation from traditional postal organization to a world-class parcel business operator. We provide different services to more than 80 countries in the world. Together with our international business, we are looking into possibilities to expand our network of parcel machines and information logistics services.
To continue our fast development, we may, sooner or later, need external financing. It is up to the owner (Estonian state) to decide, whether they are willing to put money in, take part of the company to the local stock exchange, or sell part or the whole company to a strategic or financial investor. It is off the table at the moment but we have to look closely at how other markets and competitors are developing not to fall behind.
How can the company ensure it remains competitive in an increasingly competitive market?
Our main focus is still the logistics business. We have already publicly announced that soon Omniva will open our whole parcel machine network to other logistics companies (another opportunity granted by our new IT system). Since we have the biggest and most developed network in the Baltics, opening our network to others means that our competitors don’t want to compete with us but rather cooperate. The future means more cooperation than competition. In the end, we all work for our customers.
We are also in the process of testing different kinds of technologies. For example, Estonia is too small to have an impact on the development of drones, however, the government has allowed driverless cars to be tested, which could create future opportunities. We are following up the tests and thinking how we could utilize the technology while undertaking deliveries.
What technologies do you believe are most important to a postal operator in the current market and why?
We can surely say that in the Baltics, the parcel machine is the key technology. It is simply the easiest, most convenient and preferred channel for sending and receiving parcels. It is our job to bring our network as close to the customer as possible and then utilize it in as many ways as we can.
Of course technologies must be modern and innovative in every part of the service chain from parcel pick-up and sorting to the delivery method. When one part is outdated then it also drags the others down.
As mentioned above, Omniva is a big fan of leveraging the latest technologies. We are building the most modern sorting facility (in the region) near Tallinn and we also hope to partner with Mercedes-Benz and Starship Technologies robots to conduct unmanned ground vehicle tests in the city.
Finally, are there any future projects that you are looking to put into action before this summer?
We are looking to launch an idea bank that will enable each of our 2,500 employees to pitch their thoughts to decision makers. Even if the submitted ideas are currently unrealistic or poorly thought through, we can use them to create realistic alternatives. Theoretically, even if one idea only helps the company save 0.1% on expenses per year, say €100,000 (US$109,00), then 10 ideas could have a greater impact amounting to more than €1m (US$1.1m).
Interview by Dan Symonds
May 2, 2017