La version française à venir
On 1 January 2024, Denmark overhauled its postal legislation, ending the requirement for a state-designated operator to provide a universal letter service and replacing it with a market-based model. Two years later, PostNord, the national postal operator, delivered its last letter on 30 December 2025, and exited the letter market to focus on parcel delivery.
La version française à venirThe overhaul did not happen overnight. It followed years of political discussion, a sharp decline in letter volumes, and a growing consensus that the traditional postal model and universal service obligation (USO) was no longer economically viable. Peter Hilmer Fuglsang-Damgaard, Head of the Cooperation and Preparedness Division at the Danish Ministry of Transport, is clear that the change should not be mischaracterised.
“The USO was not abolished,” he says. “We have created a new model where the USO is performed by the market forces. After the reform of the postal sector, the USO still rests with the state according to the EU Postal Services Directive and the UPU Acts. The revised Postal Act contains regulation to meet that objective.”
The case for reform
Denmark’s postal market had been under pressure for years. Letter volumes fell by around 90% from the start of the millennium – the fastest rate of decline of any country in the world – driven almost entirely by digitalization. By 2023, an estimated 95% of Danish citizens were using digital mail.
The financial consequences were significant. PostNord Denmark had been receiving state compensation to cover the net cost of performing the USO since 2020, with that figure estimated at DKK 150 million (USD 23.4 million) in 2023 alone. With a new government in place following elections in December 2022, the political discussion gained fresh momentum.
“During this process the Universal Service Provider, PostNord Denmark, declared that due to the ongoing dramatic decline in the number of letter post items, this product was no longer economically sustainable,” says Fuglsang-Damgaard.
A study published in December 2022 found that postal providers were already delivering items nationwide at uniform prices, but not because the law required it, but because it made commercial sense. Emerging competition in the letter market and growing competition in the parcel market reinforced the conclusion that the regulatory framework needed updating.
The political agreement was reached on 27 June 2023, backed by a broad majority in the Danish parliament, the Folketinget. The new Postal Act came into force on 1 January 2024. “This situation was discussed politically in the spring of 2023, the result of which led to an agreement in June the same year,” says Fuglsang-Damgaard. “The agreement is the basis of the new Postal Act.”
How postal services work now
Under the reformed framework, the requirement to designate a single operator to perform a broad set of postal products has been removed. Instead, any company wishing to provide postal services must obtain a licence from the National Regulatory Authority (NRA). Nationwide providers are required to offer at least one letter or one parcel product at uniform prices across Denmark, though prices themselves are not regulated.
Letter delivery in Denmark is now primarily handled by Dansk Avis Omdeling A/S (DAO). “DAO upholds full geographic coverage by integrating letter delivery with its existing distribution of newspapers, magazines and parcels,” explains Fuglsang-Damgaard. “This allows fixed delivery costs to be shared across multiple products and significantly improves the economic sustainability of nationwide delivery in a market with declining letter volumes.”
For international mail, a transitional arrangement is currently in place. DAO handles letters containing documents, while PostNord Denmark handles items containing goods. Both companies receive state compensation. The government has confirmed that international mail handling will be put out to tender, with any new arrangement taking effect from 1 January 2028.
Some services still require state intervention
The removal of the traditional USO was not unconditional. The new Postal Act retains specific obligations for services where commercial provision cannot be guaranteed: delivery to people who are blind or visually impaired, postal services to sparsely populated small islands, and the handling of international mail.
For services to the blind, the government has entered into an agreement with DAO. Services to sparsely populated areas are managed through a government funding pool that eligible communities may apply to. The NRA continues to conduct market surveillance and handle complaints, while the Minister for Transport retains the authority to intervene, either by appointing an operator with compensation or launching a public tender, if the market fails to provide adequate coverage.
“The Danish Transport Authority closely monitors the postal market through data, surveys, complaints, and ongoing dialogue with operators,” says Fuglsang-Damgaard. “In practice, nationwide coverage is still largely maintained on a commercial basis, supported by demand from businesses and public authorities. There has been no need to intervene since the adoption of the Postal Act.”
According to Fuglsang-Damgaard, complaints have remained stable and largely concern service quality. Prices have increased but remain uniform, he adds.
Lessons from the first two years
The reform has not been without its complications. “Most misunderstandings came from the fact that PostNord was to close its mail business at the end of 2025, and not about the fact that we changed the law in 2023,” Fuglsang-Damgaard says. “When PostNord announced that it was closing its letter business, some misunderstood that the letter service was to stop, but DAO is still delivering letters.”
Two further lessons emerged from the process: “It’s important to reinforce the surveillance of the market,” says Fuglsang-Damgaard. And regulation must include a mechanism to address market failure: “A safety net must be in place in the regulation so that market failure can be corrected,” he adds.
So far, the numbers support the approach. “The model has proved to be sustainable and the payment of compensation from the state to this sector has gone down,” he continues.
The UPU’s perspective
Paul Schoorl, Programme Manager for Policy and Regulatory Advisory at the Universal Postal Union (UPU), describes Denmark’s regulatory changes as part of a broader trend rather than an isolated case.
“The decision in relation to the Danish USO highlights an accelerating policy reappraisal driven by long-term declines in letter volumes and rising costs to sustain the USO,” he says.
“It signals that members are willing to redesign domestic postal obligations to reflect changed demand, although the responses will vary according to national economic and postal development, as well as geography, population size and density, social policy and regulatory choices.”
Despite these national differences, a general trend can be observed in which policy and regulatory measures increasingly shift away from rigid, prescriptive regulation toward more flexible measures that are market-based and outcome-focused by design, Schoorl notes.
Schoorl also stresses the fact that removing a domestic legal obligation does not mean that the universal postal service itself has been abandoned.
“The discontinuation of the specific legal obligation does not mean that a universal postal service is not provided in Denmark,” he adds.
Under the UPU framework, domestic restructuring does not remove a country’s international treaty obligations. Article 3 of the Universal Postal Convention requires members to ensure a permanent provision of basic postal services, while Articles 17 and 18 set mandatory international service elements. Denmark must continue to exchange mandatory international postal services with other member countries and comply with applicable rules such as those on terminal dues, as well as other regulatory and operational requirements.
The UPU continues to actively support members navigating similar pressures to Denmark through its Postal Reform Plan (PRP) – a structured policy advisory framework – as well as Postal Regulatory Forums and a biannual Conference on Postal Regulation.
“The International Bureau can assist with technical and comparative analysis, policy advisory guidance through the PRP, capacity building, knowledge-sharing and facilitation of policy dialogues so members can design tailored transition paths,” says Schoorl.
Advice for postal regulators
For countries monitoring Denmark’s experience and considering their own reforms, Fuglsang-Damgaard’s main message is that access to postal services and the preservation of a traditional postal operator are not necessarily the same thing.
“One of the key lessons learned from the removal of the classic USO in Denmark is that nationwide access to letter services can be preserved even when the traditional postal infrastructure is fundamentally changed,” he explains.
“The Danish experience demonstrates that full geographic coverage does not necessarily depend on maintaining a standalone universal letter network.”
His advice to other countries is to move before the economics force the issue. “Start reforms early and base them on a solid understanding of national market conditions and user needs. As volumes decline, traditional USO models may become unsustainable, making flexibility in service standards and new business models, such as integration with parcel logistics, important.”
Schoorl makes a similar point: “Any reform must balance financial sustainability with social inclusion and treaty obligations. Reforms should be evidence-based, transparent, and include measures to protect vulnerable groups and maintain mandatory international exchanges. There is a wide range of instruments and measures that can be devised to achieve those outcomes, but any intervention affecting the universal postal service should be accompanied by clear performance metrics and contingency arrangements.”
Letter volumes in Denmark are expected to keep falling. From 196 million items in 2020, they dropped to 147 million by 2023 and around 90 million by 2025. Whether other countries reach the same conclusions as Denmark will depend on their own markets, their own politics, and how quickly those numbers decline.
This article first appeared in Union Postale Spring/Summer 2026.