As digitalization progresses, almost every postal operator faces a shift in demand for its services: letter volumes are declining sharply, while parcel volumes are growing given the rising popularity of e‑commerce. For postal operators, this presents the dual challenge of remaining profitable despite falling letter volumes, while handling increasing parcel traffic efficiently. To maintain reliable and efficient delivery services in the face of these challenges, Posti, the Finnish postal operator, has partnered with the Escher Group, a UPU Consultative Committee member, to enhance its use of optical character recognition (OCR) and advance its automation processes.
Through Escher’s AI-powered OCR technology, Posti has been able to automate the reading and sorting of mail and parcels. Even handwritten addresses and notes on packages can now be read digitally. A fuzzy matching address lookup engine enhances automatic sequencing and reduces the volume of mail requiring manual intervention owing to low-quality or incomplete addressee information. If an item cannot be processed automatically, Escher’s video coding system comes into play. This system complements the OCR and address-matching processes and improves over time using deep-learning technology. Sorting efficiency is further increased through round-stop ordering, meaning that over 90% of mail is automatically sorted into the order of delivery routes. This eliminates the need for downstream manual sorting in local delivery units. These technologies were integrated into Posti’s existing infrastructure, so the transition was quick and seamless, with no disruption to operations.
The implementation of OCR technology at Posti has had a major impact on operational efficiency and profitability. Automating the processing of letter mail significantly reduces the need for manual data entry and sorting, leading to faster processing times and greater accuracy. All these factors contribute to cost savings, including by reducing errors such as misrouted mail. The solution also gives Posti greater control over its physical infrastructure – as existing spaces in its network can now be repurposed – and helps improve workforce management by allowing Posti to strategically reallocate staff to meet business and customer demands more effectively. Another key benefit is the scalability of Escher’s solution: it can adapt to changing workload demands without requiring changes to infrastructure or staffing.
These technological advancements enable Posti to respond effectively to both the economic and logistical challenges posed by declining letter volumes and growing parcel traffic. At the same time, they allow Posti to offer greater transparency to customers, thanks to more accurate and real-time delivery data made available through automation.