The letter-transportation industry is expected to witness substantial expansion in the approaching year.
Starting in the new year, you might notice an upsurge in postage charges within Germany. The Federal Network Agency plans to authorize a rise in prices for letters by approximately 10.5%. This increase follows the last price hike in 2022 with a 4.6% surge. However, specific postage costs for various types of letters are still under consideration by the post office.
The escalating costs for the post office, as a mandatory service provider, play a significant role in this price increase. Delivering packages across Germany, including remote areas, where the delivery staff spends extended time traveling, incurs substantial expenses.
As of now, a standard letter weighing up to 20 grams costs 85 cents within Germany, a compact letter weighing up to 50 grams costs 1 euro, and a postcard costs 70 cents. Industry experts predict that the standard letter might cost up to 95 cents in the near future. However, the actual cost can vary, as the post office can adjust the postage for different letter types differently.
Parcel prices may also rise
The German government has set a cap for the postage of a standard letter at 1 euro. The overall increase in all anticipated deliveries should not exceed 10.5%. The Network Agency is set to approve the revised postage rates by the year's end, with these rates valid for two years.
The parcels handled by DHL, a leading market player operating as Deutsche Post in the local letter market, may also see a price rise. In the parcel sector, the Network Agency is likely to grant DHL a price hike of approximately 7.2%.
This price adjustment applies only to parcels shipped by private clients at the counter or through automated machines. DHL can independently set prices for parcel shipments to business clients without requiring prior approval from the Network Agency.
The exact date for increasing the parcel postage for private clients is yet to be decided. In contrast to the letter sector, DHL faces fierce competition from larger parcel companies, ensuring alternative options for postal clients.
Letters are losing their impact
In the digital age, letters are gradually losing their relevance as people resort to digital communication like chats or emails, which have resulted in a gradual decrease in the volume of letters over time. In 2022, the post office transported approximately 5.9 billion letters, a decrease of one-third compared to ten years ago (7.8 billion). Advertising mail is not included in this figure.
On the other hand, the demand for parcels is surging, especially due to the rise in e-commerce. In 2023, DHL delivered around 1.7 billion parcels in Germany, a nearly double increase compared to 2013, when the company transported one billion parcels. It appears that these trends - fewer letters and more parcels - will persist in the future.
The Federal Network Agency, responsible for regulating postal services in Germany, is set to approve a 7.2% price hike for parcel shipments by DHL, targeting private clients using counters or automated machines. This decision follows a similar authorization for letter postage, with a 10.5% increase planned by the post office starting from the new year.
