Slowing Down Mail Delivery for the Better?
The German government is looking to update the Postal Act for the first time in 25 years. The change aims to adjust the current system, which is outdated due to the digital revolution, and better align it with consumer behavior and modern communication methods.
Why Change the Postal Act?
Germany's Postal Act was last amended in 1998, a time when the Internet was not as prominent and the prevalence of online shopping was minimal. However, times have significantly changed. Emails and chats have become the norm for written communication, while letters have become less popular, and parcel delivery has become more common. With these shifts in consumer behavior, legislators want to reform the postal sector laws. The necessity for change is widely acknowledged within the political sphere.
Why Keep a Postal Act at All?
Deutsche Post was privatized in the 1990s, but as a "universal service provider" it is bound by strict regulations. It provides basic postal services to the population, and in return, it gets tax relief. Despite a 85% market share in the letter segment and over 40% in the parcel segment, competition within the postal sector has failed to thrive. Deutsche Post's primary competitors include DPD, Hermes, GLS, UPS, and Amazon's delivery service.
Changes to the Law
The updated Postal Act aims to reduce the pressure on Deutsche Post when delivering letters. In the future, they will only need to deliver 95% of all letters on the third working day after posting, and 99% on the fourth working day. This time-pressure reduction will allow Deutsche Post to cut costs and adapt to the changing demands of the market.
Consumers might notice other impacts as well. Deutsche Post has around 13,000 post offices nationwide, but many suburban areas and even some larger villages do not have one, despite regulation requirements. Vending machines could potentially provide a solution, but they are not currently recognized as part of the branch network obligation.
What about Postage Prices?
Postage prices will likely increase in the future. The current rate, which expires at the end of 2024, will be replaced with a price increase corridor that Swiss Post can use. However, the new law aims to prevent excessive price hikes, ensuring a standard letter doesn't cost more than one euro.
Controversy and Critiques
The use of subcontractors in the parcel sector has caused concern and disappointment several times in the past. Subcontractors have reportedly been found to be involved in undeclared work and illegal employment. The trade union Verdi is calling for a ban on subcontractors, which the Federal Ministry of Economics' proposal does not currently support.
The Future of Deutsche Post
Potential improvements to working conditions include labeling heavy parcels and mandating two-person transport or technical aids for parcels weighing over 20 kilos. The Federal Network Agency will also acquire the power to impose hefty fines on Deutsche Post in case of quality deficiencies, a move that could significantly impact the mail service.
In Summary
Germany's new Postal Act aims to modernize the postal sector, better aligning it with consumer behavior and technology trends. This could mean longer delivery times, increased postage prices, and potential disruptions from strikes, but it could also lead to better working conditions and stricter regulations on subcontractors. All these changes will shape the future of Deutsche Post and its impact on the German population.
