“Our goals are and remain ambitious”

Swiss Post’s new four-year strategy period, with its ambitious goals, began on 1 January 2021. In a joint interview, Chairman of the Board of Directors Christian Levrat and CEO Roberto Cirillo explain what priorities will be set as the company continues to work on achieving these goals.

Mr Levrat, you took up your position as Chair of the Swiss Post Board of Directors on 1 December 2021. The strategy was drawn up and approved the year before that. What do you think of the strategy?

Christian Levrat: Swiss Post is the backbone of the Swiss economy, primarily due to its logistics infrastructure and its products and services. The realignment prompted by the “Swiss Post of tomorrow” strategy was a significant step for the current and future public service. The future-oriented strategy was a major factor in my decision to accept the role of Chair of the Board of Directors. Parts of our working and private lives are becoming increasingly fast-paced due to new technologies. We need to ensure that Swiss Post is positioned correctly as early as possible. Swiss Post must make a substantial contribution to improving Switzerland’s attractiveness as a location and quality of life with top-class services that are available nationwide. I believe that Switzerland as a whole, its residents and the companies and organizations based here benefit from Swiss Post and its alignment.

For enterprises affiliated with the Confederation, each strategy period lasts four years. Swiss Post has one year of “the Swiss Post of tomorrow” behind it, with three years still to go. How long-term was the planning when the strategy was developed?

Roberto Cirillo: It would be negligent of us to have only the next four years in mind when developing a strategy. Specifically, we wrote the strategy with Horizon 2030 in sight. We have to be quick off the mark in looking at how our customers’ requirements and habits are developing and what public services Switzerland will need in the future. Thanks to our good start to the current strategy period, both strategically and financially, we have established several of the prerequisites necessary to ensure that Swiss Post will still be powering a modern Switzerland in 10 and 20 years’ time.

What specifically has been achieved? What are the main results of the first year?

Roberto Cirillo: Swiss Post was restructured from an organizational and legal perspective with effect from 1 January 2021. In an environment shaped by the pandemic, we merged our letter and parcel units, one of the biggest mergers in Switzerland in recent years. This opens up opportunities for collaboration and optimization and creates new prospects for our colleagues in the letters unit. This is also where we will invest most heavily. We have significantly expanded our services in e-commerce and enhanced those for the advertising sector with digital solutions. We have also strengthened Switzerland’s connection to international goods flows with a number of acquisitions in goods logistics. After 18 years, we were also permitted to adjust our letter prices somewhat, ensuring better financing of the universal postal service for the next few years. The new Communication Services unit will safeguard Switzerland’s postal infrastructure in the digital age. Above all, our aim is for SMEs to be able to rely on Swiss Post as a trustworthy partner in digitizing their business processes. The public, authorities and healthcare sector also depend on trustworthy digital infrastructure. To this end, we have made initial acquisitions. As promised, the branch network has been stabilized at around 800 locations and is being gradually opened up. By selling Swiss Post Solutions, we have also succeeded in our ambition of focusing our portfolio of activities on our public service and our responsibilities within the parameters of the universal service. We have also done a good deal more besides. All with a consistently high level of quality – we have again been named the world’s best postal organization. And in the end, we have achieved an impressive financial result.

Digitization makes access to Swiss Post’s services easier. This does not conflict with the idea of customer proximity.

Christian Levrat Chairman of the Board of Directors

The values of “reliability” and “proximity” have been cultivated by Swiss Post since the company was founded. Is “proximity” still an important value in the age of digitization?

Christian Levrat: First and foremost, digitization enables Swiss Post to provide additional access and services for its customers. Digitization makes access to Swiss Post’s services easier. But this does not conflict with the idea of proximity, which is still one of the key values we embrace. Swiss Post visits every household in Switzerland every weekday – and that will remain the case. One theme that is very important for the entire postal organization is customer centricity. We have to put our customers at the center of our activities. Physical and digital proximity play a major role in this. Our challenge is to serve the many and varied requirements of our customers in both rural and urban areas. Our branches – supplemented by our branches with partners and My Post 24 terminals – help us to do this, as do our digital services.

In the last strategy period, digitization was one of the key issues. How is that looking today?

Roberto Cirillo: The secure, reliable and confidential transport of sensitive information is our raison d’être. This is a growing need in the digital age, as the letter market shrinks. We are adapting accordingly and offering our customers digital services that they can use easily, securely and with confidence. For us, this means that we will significantly expand our digital services, which also create the conditions necessary to ensure that the universal service still offers relevant benefits for Switzerland in 10 and 20 years’ time. To achieve this, we need to invest and grow. We are focusing our investments on the logistics and e-commerce sectors and on developing digital solutions for SMEs, the healthcare sector and public authorities.

In recent years, Swiss Post has been able to finance the provision of the universal service from its own resources. How is this looking for the future?

Christian Levrat: We have to be able to provide the universal postal service now and in the future from funds we have generated ourselves. In other words, without subsidies or taxpayers’ money. This is the only way we can secure the freedom to act entrepreneurially within the framework of the Postal Services Act. It requires growth. But the issue here is not growth per se. We want and need to develop our infrastructure for Switzerland in our existing core areas and other related sectors, in response to changes brought about by the rapid pace of transformation in this day and age. Wherever we can, we will achieve this development from within − but wherever it makes sense and wherever necessary, we will supplement our services and competencies with carefully selected acquisitions of external companies.

Sustainability has long since ceased to be just an issue of image. It has become a competitive advantage and, above all, a question of survival for our planet. What can Swiss Post do to help?

Roberto Cirillo: There are several facets to the issue of sustainability. For one thing, it has indeed become a competitive advantage. Over 90 percent of the total volume of letters and parcels is sent by business customers. And many of these firms position themselves as sustainable companies. With our climate-friendly products and services, we are their preferred logistics partner. And thanks to our networked and environmentally-friendly solutions, we are also a pioneer in sustainable mobility. In 2021, we have already fully electrified deliveries in some areas of Switzerland. By 2030, we want to have converted to alternative drive systems throughout Switzerland. Swiss Post plans to be carbon neutral from 2040. We want to set an example and make a substantial contribution to achieving Switzerland’s climate goals. Like all other companies, it is our responsibility to leave behind a liveable planet for future generations by taking bold and committed steps.

We want to set an example and make a substantial contribution to achieving Switzerland’s climate goals.

Roberto CirilloCEO

Swiss Post is the third largest employer in Switzerland. In rural regions, it is in fact the largest. What role do the employees play?

Roberto Cirillo: Our employees are our greatest asset. They approach and carry out their various responsibilities with a very high level of identification with Swiss Post. But the roles and job profiles at Swiss Post are not rigid – employees need to show flexibility and be willing to evolve. Due to the digitization and automation of new products and services, the expectations placed on employees are also changing. New knowledge and skills are required. As an employer, we support our employees on this path and provide training and development opportunities where necessary. But we are also competing in the “war for talent” to attract the best young workers to Swiss Post. Many of our colleagues are close to retirement. This means that we have a high demand for new employees, especially in the growing IT sector. We offer a wide range of exciting roles and projects, outstanding employment conditions and, above all, good prospects for the future. Swiss Post is a top employer.

Why Swiss Post adjusted its prices

Swiss Post wants to continue to provide a high-quality public service for future generations and to finance this from its own resources. One of four strategic thrusts aimed at achieving this goal is the adjustment of prices, which will ensure a long-term continuation of the service quality valued by customers, in all regions of Switzerland, in the cities and in the countryside, at the same price for everyone. In 2021, Swiss Post and the price regulator signed a new amicable settlement covering modifications to prices and product ranges for letters and parcels. It has been in force since 1 January 2022.

Letter prices had remained unchanged for 18 years. While the number of letters processed has seen a massive 40-percent decrease since 2002, the structural costs for the universal postal service have risen sharply, as a result of general inflation and the increase in the number of households – and hence letter boxes – in Switzerland. By way of comparison, wages in Switzerland have risen by around 17 percent since 2004, while health insurance premiums have leaped by 45 percent.