It’s about the future of letter delivery in Germany: the Federal Ministry of Economics wants it Revise postal law and now presented the draft for it. The cabinet is expected to approve the amendment to the legal act this year. That would bring some changes for consumers – and for Deutsche Post and its parent company DHL Group.
What changes with delivery?
The law currently stipulates that 80 percent of letters must be delivered on the next working day. But the number of letters is falling because citizens are doing more and more things via email. The trend has accelerated; the decline was six percent in the last twelve months alone. This means that Deutsche Post’s costs are spread over fewer and fewer shipments. In order to reduce costs again, Robert Habeck’s ministry wants to cancel the requirement for the next day. Instead, 95 percent of letters should reach the recipient on the third day and 99 percent on the fourth day after they are posted.
The idea behind this is that people nowadays usually send really urgent messages by email anyway. This license also allows Deutsche Post to avoid climate-damaging night flights within Germany when transporting letters.
What about postage?
The next postage increase is due at the beginning of 2025. Deutsche Post had applied for an early increase in 2024 and justified this with increased costs, but the Federal Network Agency rejected the request in August. The Bonn authority determines how much the postage volume can increase – and the postal law sets the framework for this. The proposed changes now effectively lead to a kind of price cap and prevent the postage for a standard letter from rising from 85 cents to more than one euro in 2025. In European comparison Postage in Germany is cheap anyway, and the Federal Government wants it to stay that way.
However, the elimination of the obligation to deliver the vast majority of letters within one day could create a completely new pricing model. The post office could introduce premium stamps, the purchase of which guarantees that the letter will be received by the recipient immediately on the next working day and not in three days. Such models exist in Great Britain, Austria and Switzerland.
Are branches closing?
The postal law requires a certain number of branches. So far, Deutsche Post has operated 12,000, most of which are post office counters in supermarkets or kiosks. The group is also building more and more automatic post stations. There, customers can buy stamps and pick up and drop off packages. To date, the postal law does not allow branches to be replaced by post offices. This should be possible in some cases in the future. However, the Federal Network Agency must agree to this.
Are there further reforms?
The ministry’s proposal would give the Federal Network Agency more powers. Unlike before, it should be able to impose fines if the Deutsche Post service is not up to snuff. Last year, the authority received more complaints than ever before because the company delivered shipments late due to a lack of staff. In addition, the amendment to the law provides relief for Deutsche Post’s rivals and aims to strengthen competition. The Federal Network Agency should also be able to more easily investigate allegations that the former monopolist grants unfair discounts to large customers to the detriment of other postal providers.
How important is the business for DHL?
Deutsche Post provides the so-called universal service in this country. This means that the ex-monopolist has to deliver letters and maintain branches and mailboxes nationwide – even in sparsely populated rural areas where this is more expensive. As a reward, the DHL Group does not have to pay sales tax in this division. That sounds lucrative and important, but in fact the German mail business only accounts for seven percent of the sales of the logistics group with 600,000 employees worldwide. The DHL Group earns her money especially in the international express business, in air and sea freight and in supply chain services, such as the operation of warehouses. In addition, profits in the German mail and parcel division have collapsed, also due to higher costs resulting from the collective bargaining agreement in the spring.
How does DHL react to the draft?
In a recent interview with SZ, DHL boss Tobias Meyer demanded that the new postal law must create the framework so that the universal service can continue to be carried out economically, despite declining letter volumes. However, the company’s initial reaction to the proposed law is skeptical. The Bonn-based DAX company particularly dislikes the planned relief for rivals: “Wanting to enforce competition in a shrinking mail market with a crowbar has not proven successful in any other EU country, but on the contrary has led to higher prices, poorer quality and worse working conditions.” , complains a spokesman. It is unclear “whether the draft provides the prerequisites for an economically viable universal postal service.”
Theoretically, the company could withdraw from the universal service, then the government would have to find another logistics company to do it. In reality, such an escalation is considered impossible. In the interview, DHL boss Meyer said when asked whether the company could do without letter mail in Germany: “I don’t want to imagine that.”