Last post Denmark gives up its postal service

An unrelenting path towards digitalisation claims its most recognisable victim. Other iconic offline institutions should take note

Tomorrow, for the first time in 400 years, Danes will not be able send letters for delivery by their postal service. PostNord, the latest iteration of an institution that was founded in 1624, will cease carrying letters at the end of this year, and stopped accepting letters today. The reason for the decision is a 90% decline in the number of letters sent since 2000.

Steep declines in the volume of post being sent are not unique to Denmark. Like other places, electronic communication—be it e-mail, text or something else—was no match for the written letter in terms of price, convenience or speed. Danes were perhaps quicker than others to drop sending letters (PostNord, which is part owned by the Swedish state, can still earn money delivering letters to Swedes), but it has been successive governments that have played the biggest role. Firstly, when all public-sector correspondence was required to be sent online, starting in 2013, to firms, and then, a year later, to individuals, with only a very few exceptions.

Last year, it struck the final blow: it ended the universal service obligation (requiring that PostNord deliver letters to all addresses) opened up the market to competitors and ended its VAT-exempt status. A letter that in 2020 ran you 29 kroner (€3.88) and arrived the next day, suddenly cost 39 kroner. (A letter could still be sent for 29 kroner, but it took five days to get there.) Quality went one way, price another, and the remaining customers disappeared: volume fell 30% year-on-year.

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One upshot of the unrelenting drive to go digital has been a steady, if slow, increase in the availability of platforms that live up to the public sector’s requirements for privacy and security, as well as the establishment of standards that make them interoperable. Making these electronic postboxes mandatory and secure has given firms an incentive to use them to send bills and other correspondence that is too important to send as an e-mail.

Underpinning the digitalisation of postal services, and indeed, Danish society in general, has been improvements in online identity-verification technologies. The country is on version 2.0 of its national online ID, and it is hoping that its experience can be useful in developing an eID that can become the EU standard.

Another beneficiary could be firms that take over the field PostNord is leaving behind. DAO, courier and parcel firm that already has a quarter of the letter-delivery market, a 20% lower price than what PostNord was charging and, crucially, the ability to scale up, is the best positioned. Its competitors are still considering whether to get into the game, but, if they did, it would be reasonable to assume that the price would go down further, and delivery times reduced. For customers, that would be something to write home about.