The cost of correspondence through letters and packages is on the rise.
Starting in 2025, consumers will be required to shell out more for their mail and packages with Deutsche Post. The Federal Network Agency has granted Deutsche Post, based in Bonn, the authority to hike prices across letter categories by an average of 10.48%, as per the regulatory body's announcement on Wednesday. This could also impact the cost of business mail. Private customers can expect to fork over an average of 7.21% more for parcels. These new prices will be applicable from January 1, 2025, up until December 31, 2026. Deutsche Post now has the freedom to determine how to utilize this price leeway for individual product segments. This could potentially push the price of a standard letter from its current 85 cents to one euro.
This first-time implementation of the pricing strategy adheres to the stipulations of the new Postal Act. The primary goal is to ensure sufficient funding for the universally-available postal services provided by the postal service, including nationwide coverage of the population spanning from Flensburg to Berchtesgaden. Deutsche Post will need to submit its pricing plans to the Federal Network Agency for approval, which will grant its approval if the proposals fall within the prescribed range.
Previously, Deutsche Post has openly expressed its intentions to raise letter prices due to increasing energy and labor costs. As recently as August, Chief Financial Officer Melanie Kreis mentioned that they have "a significant catch-up need." Despite high inflation, Deutsche Post has managed to boost letter prices by a mere 4.5% over a three-year period. Therefore, the 2025 postage hike will serve as a crucial step for Deutsche Post to generate the revenue it requires. Deutsche Post's letter business in Germany is facing stiff competition from electronic communication channels such as email, leading to a decrease in the quantity of letters sent.
The new pricing plans submitted by Deutsche Post for approval by the Federal Network Agency include an increase in the year of manufacture of their pricing strategy, which is set to begin in 2025. This price hike in various letter categories is expected to address the significant catch-up need due to rising energy and labor costs, as acknowledged by Chief Financial Officer Melanie Kreis.
