PAP: What kind of Polish Post did you find after taking over as its president?
Sebastian Mikosz: Clinically dead.
PAP: What does this mean?
SM: The heart is beating, but the head has stopped working. The heart is people. And the head is about strategic decisions. Over the last 8 years, the company has been practically driven out of business. I have a huge regret about this. Poczta Polska is not only a State Treasury company, but also a company performing a state-building function.
The clinical death of the Post Office is that we only have debts. First of all, we have a debt that can be described as courier debt, which means we are the seventh player in this fastest-growing and attractive market of logistics services related to e-commerce. And it will be very difficult for us to expand on this market, because it requires making huge investments and a complete transformation – from a company that focuses almost exclusively on letter logistics to a courier company.
The second debt, which is probably the most dangerous, is technological debt. In recent years, especially the last eight years, the Post Office has not invested in its IT systems at all. We are an open-air IT museum, a company that operates probably on the basis of the oldest available systems. We estimate that currently getting out of technical debt will cost around half a billion zlotys. We need to buy at least 23,000. computers, install completely new servers, new software. We operate on systems that are up to 20 years old. We need to modernize the window system and the one responsible for logistics management. I think that Post Office employees have justified grievances and regret that they work with antediluvian equipment, which is why they are often embarrassed in front of customers. In addition, we have, for example, almost 250 different IT systems, although we should have significantly fewer of them. On the other hand, over the last two or three years, my predecessors spent hundreds of millions of zlotys on creating their own software, of which there is no trace.
Technical debt is particularly dangerous because it generates other debts. Financial debt is a consequence of technological debt. This is a failure of the company to adapt to the realities and market needs. The volume of letters handled by the Post Office has been constantly decreasing for years, while the costs of labor and raw materials have been increasing.
Additionally, we are a company where everything is slow, long and complicated. We have built an impressive internal bureaucracy, the maintenance of which requires enormous employment. I dare say that today more people are involved in handling the bureaucratic apparatus than those who actually have contact with customers.
And finally, there is intellectual debt. It is particularly painful for me because it involves the need to make Postmen aware that changes in our company are inevitable if the Post Office is to survive. It's a bit as if no one noticed that the market is slipping away, digital correspondence solutions will dominate private and official communication in the coming years, replacing traditional letters.
PAP: So what is the financial loss for 2023?
SM: The gross loss of the entire Poczta Polska Group is almost PLN 468 million. This is post-audit data. The gross loss of Poczta Polska itself is minus PLN 745 million, but the Group's result improves the result of Bank Pocztowy. The company has already received a refund from the State Treasury for envelope elections.
PAP: So what kind of Polish Post do you want to build?
SM: The Polish Post Office needs to be reinvented. We are no longer a monopoly and I have the impression that this is the first thing that needs to be made clear to everyone. In addition, traditional Post Office services are simply going out of business. Letter delivery is dying out and this trend will only intensify. In Europe, the letter delivery market is declining by approximately 10%. year after year, for many years now. All this strengthens the Polish phenomenon, which is undoubtedly beneficial for us, citizens, but at the same time extremely dangerous for the Post Office. What I mean is that we have some of the most digitized public services compared to other European countries, which is reflected in applications and systems used by millions of Poles, e.g. e-ZUS, e-prescription, e-PIT or mObywatel. Digitized communication means less paper and postal communication.
Additionally, the e-Delivery Act will come into force in the near future. According to its assumptions, from January 1, 2026, e-Delivery will be the dominant form of communication between public entities and citizens. Even if we assume that the Post Office will be a national digital operator, we need to re-invent what a company will be in which the current main source of income, which is paper letters, will disappear. Currently – and I say this with undisguised regret – we have four or five good players on the courier market who beat Poczta Polska in terms of quality, speed, price and availability.
We are in a situation where our two basic services are de facto disappearing (letter delivery – PAP) or are taken over by competitors (courier services – PAP). The third promising service, the mentioned e-Delivery, has not yet gained popularity. That's why we, as a management board, are already working on a transformation plan. I deliberately do not call it a restructuring plan because we will not restructure the business that exists. We simply need to create a new business for the Post Office. We will certainly not give up the courier market and we will deliver letters as long as possible. It is worth mentioning here a hybrid service, which means that, for example, the office will be able to send a letter in a digital version, and we will print it and deliver it to the addressee. This is especially important for people who are digitally excluded.
I am convinced that the Post Office has great potential in providing financial services. We have Bank Pocztowy, we have a company that distributes insurance, and these are services on which we can strongly rely. I also have an idea for using our potential in providing retail market services, especially since as much as 70 percent our branches are located in cities with up to 200,000 inhabitants. inhabitants, and approximately 46 percent branches in cities up to 50 thousand inhabitants. We are able to reach every Pole, anywhere on the map of Poland.
Quite recently, I saw a study that shows that Poczta Polska is in second place in the trust ranking among Poles, right after the State Fire Service. After all, our postmen distribute PLN 5 billion in cash in pensions every month. And this is our huge capital thanks to which we want to build a new Post Office. We certainly do not want to close down post offices, but we need to modernize them. Based on the trust of customers, I would like to build, together with local governments, such “citizen service centers”, i.e. places where interpersonal contact between the state and the citizen remains irreplaceable. And this is where the state-building component of the Post Office would also manifest itself. In many places we are the only, let's call it this way, state institution. So we can think about developing services that today seem non-standard or even surprising. We are really open to unconventional solutions. Recently, I listened to the statement of the Secretary of State in the Ministry of Family, Labor and Social Policy, Aleksandra Gajewska, who would like to acquire places for nurseries and kindergartens. Why not use the numerous Post Office properties, often vacant and unused areas, for this purpose? Today, however, we have two problems related to the image of the Post Office: one is the impression that postmen only leave notices, so the customer has to go to the Post Office and stand in a queue, and the other is the “bazaar” – the impression that you can buy anything at the post office . We will definitely change that too.
PAP: How much is the State Treasury refund for the Post Office?
SM: The refund applies to facilities attended by 5-7 people a day. The post office has PLN 7 billion in revenues, and the refund is PLN 700 million. That's 10 percent. our revenues.
PAP: What is your plan for this year?
SM: Survive. We are preparing a transformation plan. We need another month to present its first part to the supervisory board. Then we will start implementing it, which will translate into improved key results. First of all, in the first phase, we will focus on debureaucratizing the Post Office. Today, the most important for us are those employees who have direct contact with the customer. We just have to fight for quality. The second thing is to start the transformation. We need to start transforming the network from letter to courier. Postmen will gradually move more into the role of couriers. This will be included in the transformation plan. Its biggest challenge is the need to make huge investments.
PAP: Are you considering entering the stock exchange as part of this plan?
SM: Haha, that's an interesting and tricky question! It is true that there are post offices listed on stock exchanges around the world, so this solution is possible. However, this is primarily the decision of the owner, who could make such a decision when we get on track financially and become attractive to investors.
PAP: What could be the role of trade unions in the transformation of the Post Office?
SM: There are 97 trade union organizations at the Post Office, including two representative ones, and we mainly talk to them. A few days ago, we established a team for negotiating changes in the Collective Labor Agreement (PAP) and invited trade unionists to participate in its work. I will certainly try to explain to the social side the validity of the decisions made, but with such a huge number of unions, constructive dialogue to develop specific solutions is extremely difficult. Moreover, the demands of various trade unions are virtually identical and are limited to demands related to wages and staff. I believe that such a number of trade union organizations results, first of all, from the desire to maintain the so-called trade union protection by broad groups of people.
Depending on the size of a given association, it may protect a specific number of its members. In postal practice, this means that we have a group of approximately 700 people at the Post Office who cannot, for example, change their pay conditions or dismiss them – without the consent of the union.
The costs of operating trade union organizations for the Post Office are also not low and are estimated at approximately PLN 10 million per year. Unions are doing what they always do, which is focusing on forcing wage increases. In my conversations with trade union leaders, I did not hear any demands that would involve intensifying work on new IT systems or making larger investments in this area, which would improve the work of employees. What did the unions do when Orlen, which is also a State Treasury company, took over the parcel machine market? Why didn't they react 2-3 years ago? I must also admit that at the Post Office I encountered a situation that was beyond my business imagination. Many managers are also trade unionists. Thus, at one meeting, one and the same person serves as the managing director of a given area, and at another – as a trade union activist.
PAP: What are the average earnings in the company?
SM: Unfortunately, the earnings in this company are not something I can boast about today. Although postal workers can count on the 13th salary, internship allowances – up to 20 percent, bonuses and subsidies for recreation, the basic salary is not high. This is due to the enormous increase in employment. That's why I proposed job cuts and salary increases to the trade unionists, which was rejected out of hand. If today I met the unions' expectation of a gross increase of PLN 1,000, it would cost the company PLN 1 billion 200 million per year. As president, I believe that this postulate is not shocking given today's inflation and higher costs of living. Unfortunately, today the company's situation does not allow for such increases.
I agree with trade unionists when they talk about flattening wages at the Post Office due to the rapidly rising minimum wage. It is true that operational employees can earn as much as their superiors – e.g. managers. But getting out of this is a process that will take at least two years. It will be necessary to reduce employment, renegotiate the collective labor agreement and implement a transformation plan.
I know our situation isn't looking good today, but everything I'm talking about can really be done. I am determined to achieve this.
Sebastian Mikosz at the end of March this year. was appointed president of Poczta Polska. It is a State Treasury company and the largest postal operator on the domestic market. It employs approx. 62-63 thousand people. employees, and its network covers 7.6 thousand. branches, branches and postal agencies throughout Poland. (PAP)
Interviewed by Aneta Oksiuta
