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German parcel carriers expect postage rate increase

Wednesday, June 22nd, 2011

The price of sending a parcel in Germany is set to increase as the four largest carriers in the country look to combat rising operational costs, according to Die Welt.

DPD, GLS, Hermes and DHL could raise their prices as a result of environmental regulations, higher wages and rising energy costs, executives from each respective company told the German newspaper. Furthermore, the operators are coming under pressure on pricing from large online customers, and a growing home delivery failure rate is proving expensive, because “the modern person is rarely at home”.

As a result of this, Die Welt said that both business and private customers will have to adapt to a higher postage rate in the future.

Rico Back, CEO of GLS, told the newspaper that he expects to have to raise prices by 3-5% this year, stating that rising operational costs will be passed on to the consumer. Last year’s price increases hampered growth at GLS – with the company only recording a 2% increase in shipments. In comparison, Hermes reported a double digit increase and DPD saw 8% growth, similar to DHL. However, this move has seen GLS report a profit margin before tax of 8% – ahead of industry figures.

DHL is not planning a price hike for residential customers, but regularly adjusts the postage costs for businesses. DHL’s Andrej Busch explained that price increases are averaging 4%, “mainly driven by higher transport and energy costs”. Whilst DPD CEO Arnold Schroven also told Die Welt that rising costs will be passed on to customers.

Hermes CEO Hanjo Schneider told the newspaper: “The prices will keep rising. This is triggered by higher logistics costs, and in turn, environmental concerns. Truck tolls and diesel fuel are only two [of the challenges we face]; more stringent Euro standards for truck fleets and rising wages are [among the others].”

Die Welt reported that both DPD and GLS, the B2B specialists, do not want to primarily compete with Hermes and DHL for deliveries through Amazon, eBay and QVC. Back said: “Amazon and eBay are not our primary target group.”

Source: Die Welt / Post&Parcel

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