How do you foresee the challenges and opportunities for the Croatian Post in 2024, especially considering the experiences of previous years?

The last three years have taught us to be prepared for the unexpected. We must be flexible and adaptable because this is the only way the company can prosper and grow despite global challenges. I am proud that Croatian Post and its workers showed their strength and resilience when it was most difficult. Despite challenges such as the pandemic, the earthquakes in Zagreb and Banovina, and the war in Ukraine, we ended each year successfully. Even after a big wave of investments, digitization, automation and building logistics, we are showing our strength on the market with a large increase in revenue and volumes. In other words, crises did not prevent us from realizing our vision of an innovative company tailored to the needs of workers and customers.

In 2024, we expect a continuation of the growth of the package business, where every year we break new records in terms of the package volumes and numbers. In the past period, through significant investments in infrastructure, technology, and people, we expanded our capacities and transformed Croatian Post into a modern logistics company. This enabled numerous collaborations with domestic and international e-commerce companies, and we will continue to expand our partner network next year as well. At the same time our commitment to sustainability will drive us towards becoming a “green” post, and we will maintain our focus on advancing the customer experience through digital tools.

Could you tell us about the key trends in the postal services sector that will shape the market in the coming year and how the Croatian Post plans to adapt to these trends?

The postal sector is in a specific situation because we must carefully balance between the large and continuous growth of parcel business and the reduction of negative impacts on the environment. It is a challenge that will determine the direction of the entire economy in the coming years. Croatian Post has already taken several big steps in the direction of sustainable business. We have the largest fleet of electric vehicles in Croatia, we are developing our own network of charging stations for electric vehicles, and we invested in energy-efficient business facilities. Our customers can participate in the process of reducing CO2 emissions by using our network of 300 parcel machines.

The results of our investments are measurable, and thanks to electric vehicles, we will reduce C02 emissions by more than 1,300 tons this year. Sustainable business is one of the foundations of our new strategy with direction until 2030, and we confirmed our dedication by joining international initiatives with concrete and measurable goals.

The other trend which shapes, not only the logistics sector, but entire global economy is the labor shortage. To retain quality workers and attract new ones, the Management of Croatian Post, in cooperation with the social partners, agreed, in July, on a 25% salary increase for all employees of Croatian Post. This is a big investment in our workers in the amount of around 30 million euros per year. We are aware that increasing wages is the only real answer to employee turnover, and the stability of the postal system depends on postmen, delivery workers, drivers, and workers in post offices. I also must mention that we already raised salaries by 20% for 8,000 workers in operational workplaces in 2022.
 

The Croatian Post has experienced significant growth in recent years. How do you plan to sustain or even accelerate this growth in 2024? Do you have specific strategies in place for this?

Parcel business is the future of the postal sector. In the last five years, the structure of shipments has changed a lot. Five years ago, package business amounted to seven or eight percent of revenue, and today we are at 24 percent. The amount of mail is reducing and the transformation towards parcel business is very strong because today the market is global, and it was never easier to order goods online.

We owe our growth primarily to investments in infrastructure and a EUR 200 million investment cycle, as part of which we already built a large sorting center in Velika Gorica and a business facility in Kukuljanovo. By building modern infrastructure, we have met the main prerequisite for business development, but this does not mean that we are done with capacity expansion. Last Black Friday we passed the magic number of 100,000 parcels in one day and the daily average is around 60,000. To grow even further, we will expand our automation system to keep up with the pace of the market and new trends.

Breaking package records would not be possible without our postmen and Paket24 couriers, a modern sorting office, but also new delivery channels such as parcel lockers that offer customers new ways to pick up and send packages at the most convenient time for them personally.

Digitalization and environmental consciousness are becoming increasingly important aspects of business. How does the Croatian Post plan to leverage digital tools and practices and contribute to sustainable operations in the upcoming year?

Our business complexes are built in a green and sustainable way, which saves energy as much as possible. We reduce the carbon footprint with alternative-powered vehicles, while alternative delivery channels such as parcel machines and the possibility of customer management of parcels further contribute to the reduction of CO2 emissions, as delivery vehicles thus visit fewer locations. In order to achieve ambitious long- term goals you need to introduce a green way of doing business wherever possible.

Our efforts and focus have been recognized at the national level. I am proud that Croatian Post received prestigious award for sustainable business at the beginning of November - the Croatian Sustainability Index Award. This means our efforts are already recognized and gives us motivation to continue our path to become net neutral by 2040.

Could you share some of the most significant initiatives and plans of the Croatian Post for the year 2024? What are your primary goals and priorities for that period?

In 2024, we will continue to increase wages for our workers. In March, we will implement the last phase of the salary increase, and the average salary of postmen will be higher than 1,000 euros. We continue to optimize operations and expand capacity because we see our additional development in logistics. Soon we will launch a project to build a fully automated high-bay warehouse, which is one of the examples of our expansion into logistics business. We also have many other projects that are at an advanced stage of implementation, and we will complete them in the next two years.

Digitalization will continue, and this will be felt by the customers for whom we are preparing an application and then everything will be on the mobile phone and in one place. Our customers will have full control and be able to choose when and where each parcel will be delivered.