In previous posts this year I have been strongly critical of the fact that several transport companies are subsidized with tax money, for example PostNord, which is owned by the Swedish state with 60 percent and 40 percent is owned by the Danish state.
I know that many agree with me on this issue, and now I also have some support from the national audit office of Norway; Riksrevisjonen.
Recently, Riksrevisjonen presented an investigation they had conducted of Bring / Norway Post. It appears that the company does not meet return targets, as a result of not fulfilling the owners' expectations for improved profitability in the logistics and freight transport activities.
This is also something the editor in chief Anders Karlsson noted in an article on Transportnet in November.
For Bring / Norway Post the review was about profitability and synergies for the period 2010 to 2015. It was during those years Bring / Norway Post made several major acquisitions of haulages and freight forwarding companies in Norway, Sweden and the other Nordic countries.
Riksrevisjonen stresses that both the 2008 financial crisis and the downturn in the oil industry in recent years has contributed to the poor profitability of the company. Other factors that have affected the result are a series of one-off effects, including write-downs and restructuring costs.
In Anders Karlsson's article, Tone Wille – newly appointed CEO of Bring / Norway Post – emphasizes that the acquisitions of trucking companies and freight forwarding companies in Sweden have been major contributors to the poor performance. One highlighted example is the purchase of Ekdahls Åkeri, which Bring / Norway Post failed to push forward in an optimal way and now major cutbacks are implemented.
In the report, Riksrevisjonen urges Norwegian Ministry of Transport and Communications, who are the owners of Bring / Norway Post, to follow up on Bring / Norway Post in a denser way than before. Specifically in regard to the Group's earnings trend and when it comes to setting clearer requirements for future development.
In the article on Transportnet Tone Wille also says the following: "Both we as a company alongside our owners have been very focused on profitability. However, the entire industry has had challenges after the financial crisis that includes over-capacity in the market, which in turn has weakened the profitability. "
Well, we are in total agreement on this statement. It is against this background that I continue to ask – why should state-owned companies continue to compete with low prices and poor performance on an already highly competitive market?
To be continued.