Although the launch of postal service was not easy and SmartPost concluded the first half of the year with 8.3 MEEK losses, the company is sure that this type of business will soon start growing.

“Current economic situation has been our baptism of fire, so to speak," says Indrek Oolup, chair of the board, to Päevaleht Online and asserts that number of people who use parcel terminals is growing steadily.

For instance, number of people who used the terminals in one day exceeded 1000 limit in the end of August. “Pro cent wise, we can be satisfied with how much the parcel terminals are used," he added.

Oolu told there are around 100 different web shops and catalogues that actively offer their service. “Usage rate varies – about 30-80% of customers select us as the preferred delivery method,” told Oolup.

Number of private individuals who used parcel terminals to send parcels to one another has been in average 2000 in the recent months, which according to Oolup shows that people use the terminals rather willingly. “It is true, however, that people are a bit reserved when it comes down to something new or unfamiliar,” Oolup admits.

Oolup says that one could compare red parcel terminals with ATMs. “When the ATMs first emerged, many people still preferred to get their cash from the bank assistant at the bank branch. Now it is rather rare that anyone would ever go to bank office to collect cash," explains Oolup and adds that parcel terminals will most probably face the same destiny. "Parcel terminals will soon take post offices’ place in delivering the parcels,” Oolup is sure.

Estonian Development Fund does not see a problem in initial losses.

Development Fund, that invested 13,4 MEEK into a launch of SmartPost does not believe their investment to fail despite the last year losses. Heidi Kokku, head of the Investment Division of Development Fund, explained to Päevaleht that real gains of the investment will be clear only after they exit their investment i.e. when they sell their stake in the company.

“The investment period is approximately 5 years and although it is possible to exit earlier that mark, Development Fund does not have any plans to sell their stake in SmartPost in the moment,” says Kakko.

According to Kakko it is usual and expectable that in case of the early phase investment into a growing company, there will be substantial investments, costs related to service development are high, possible gains will start to grow later, and all similar companies are in losses in accounting terms.

“The bookkeeping losses in 2008 definitely do not mean that the company or the investments in it would not have any value,” says Kakko.

Kakko admitted that planned usage levels have been achieved with some delay compared to the initial estimations, but this is not a big issue.

“We are on the position that in the conditions of the general economic downturn the team of the company has done a good job, has managed to start operating the service in the changed business conditions, and has managed to keep the costs under control,” told Kakko.

The world’s largest known parcel terminal is located in Tallinn

• SmartPost installed a probably the largest known parcel terminal in Lasnamäe Centrum shopping center in last week.
• The newest terminal has 198 lockers for parcels and is total 17 meters long. Knowingly there are no other terminal in the entire world that could rival this giant both in terms of its dimensions and its capacity.
• The company has altogether 36 parcel terminals all over Estonia, the usability of which varies according to the number of people living in the proximity of the given terminal.
• Estonia is the second country in the world after German y where such country-wide network of parcel terminals has been put to work.