Iceland Post reports rising costs as letter volumes fall

Iceland Post says distributing unregistered letters from abroad costs it hundreds of millions of kroner a year, even as letter volumes decline. The company’s figures were reported by mbl.is.

The shipments include Christmas cards, bills and notices of speeding fines sent to Icelanders abroad. Iceland Post’s half-year accounts show a loss of 414 million kroner in the first six months of the year.

The number of foreign letters and the basis for the estimated cost have not been disclosed. State compensation to Iceland Post for its universal service obligation rose from 487 million kroner in 2023 to 757 million for 2025. A change to the company’s cost model at the start of 2024 increased the calculated compensation.

Iceland Post has requested a special state contribution to cover the foreign letters, but postal law says the company cannot seek such funding.