Covid makes for record business figures in the Baltic

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The first six months of 2020 were the most successful in half a decade according to Estonia-based post and logistics company Omniva, thanks to e-commerce continuing to gain momentum and clients’ preference for parcel machines. Compared with the same period in 2016, the group says its operating revenue has increased by more than half (+52%) and profit has more than doubled (+119%).

According to Ansi Arumeel, chairman of Omniva’s management board, the first half of 2020 was extraordinarily influenced by the spread of Covid-19, but the impact of the planned long-term activities and cost cuts in the first quarter of 2020 also played a role in the results.

“The company’s long-term strategy is working,” Arumeel noted, “and the investments made in recent years have been justified. The parcel machine network covering the Baltic states, rapidly growing Latvian and Lithuanian business units, a new logistics information system and new logistics centers have ensured the company’s capability both in the face of soaring volumes during the state of emergency and in the longer perspective.”

The company claims that thanks to the quickly applied measures, the operation of its postal and parcel services was ensured during the height of the pandemic. “Amending work organization to protect clients and employees and ensuring the availability of personal protective equipment formed the basis for sustainable service provision and coping with the sudden increase in volumes,” explained Arumeel.

Omniva notes that transport disruptions due to Covid-19 and other restrictions caused the volume of international parcels to fall compared with the same period last year, but this was compensated by the explosive growth of national e-commerce throughout the Baltic states. The volumes of incoming international parcels began to recover toward the end of the second quarter.

Covid has also changed consumer habits. Due to the closure of post offices located in shopping centers, the shipment numbers in the postal network decreased, but at the same time the use of parcel machines as the outdoor contactless option increased.

“Universal postal service volumes are in decline,” observed Arumeel, “but the service continues to be important for the people of Estonia and it is the duty of Eesti Post to ensure the availability of this service across Estonia. The company faces the challenge of finding the best model in cooperation with the state to provide a modern postal service that meets the needs of the clients.

“Although the state of emergency brought about significant unplanned costs, such as the establishment of temporary parcel issuing points instead of the post offices located in the closed shopping centers and also the provision of personal protective equipment to employees, the efficiency measures and savings plans implemented in the company before the Covid-19 crisis had a positive impact.”

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