#Lukáš Kovanda, Ph. D.

New Boss Tasked with Overhauling Struggling Czech Post

18 June 2018

Czech Post has a new director general. Freshly-installed chief Roman Knap has been tasked with cutting costs but also raising salaries at the beleaguered postal service, which has one of the world’s densest branch networks.

Listen to the news from Radio Praha in English.

The acting minister of the interior, Lubomír Metnar of ANO, dismissed the previous director general of Czech Post, Martin Elkán, in February. Explaining the move, Mr. Metnar suggested that Mr. Elkán and his team had lacked a “coherent vision” for the postal service. It employs around 30,000 people and has seen its profits fall to around a tenth of what they were in 1998. Profits last year were half those recorded in 2016.

Lukáš Kovanda, chief economist at Cyrrus, says there were grounds for making a change at the top of the organisation. “There weren’t just intangible reasons, but also genuine numerical, tangible reasons for the removal of the general director. Czech Post’s profits are constantly falling. Also, he wasn’t capable of making a smooth transition to the Post Partner system; it’s a franchise system that should take the pressure off Czech Post in terms of costs, enable considerable savings and improve its running.”

Mr. Kovanda says Czech Post has been impacted by the internet and the related decline in snail mail – but could have made more inroads with new technology, such as playing a greater role in delivering online purchases. Another problem is its number of branches, he argues.

“Its network is too dense. It has 3,200 branches, which makes it one of the world’s densest networks. In fact, 1,000 branches could be cut and it would still meet the government edict that sets the minimum number of branches. And such closures could result in major savings.”

The man hired to turn things around at Czech Post is Roman Knap, who took the reins on Monday morning.

He has been tasked by Minister Metnar with delivering a strategy for the service’s future to the cabinet by the middle of October. This will include reducing running costs and pruning management, Mr. Metnar said.

At the same time, postal workers’ incomes have not kept step with inflation and the new man has been told to raise salaries.

The Ministry of the Interior, which runs Czech Post, has also called for an acceleration of the transfer of branches to partners; the modernisation of sorting centres; improvements in the postal service’s IT infrastructure; and a reshaping of the organisation’s portfolio of services.

Lukáš Kovanda

Lukáš Kovanda, Ph.D., je český ekonom a autor ekonomické literatury. Působí jako hlavní ekonom CZECH FUND. Analyzuje a komentuje makroekonomická témata, investice i nové fenomény typu sdílené ekonomiky, kryptoměn či fintechu. Přednáší na Národohospodářské fakultě Vysoké školy ekonomické v Praze.
Je členem vědeckého grémia České bankovní asociace.

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