Deutsche Post saves Eur500m in cost-cutting program

German postal services company Deutsche Post AG has saved some 500 mln euro (USD606.9 mln) since it introduced a cost-cutting program in October 2002, aiming to reduce its costs by at least 1.4 bln euro (USD1.699 bln) by the end of 2005, the company said on July 27, 2004. Following the program, Deutsche Post aims to achieve annual savings in the three-digit millions of euro, mainly through flexible working hours and a combined delivery of letters and parcels. In a move to achieve its goal, Deutsche Post established a global procurement organisation, which helped the company reduce its expenditures for new computer technologies by a double-digit percentage. The company expects to reduce its costs only in this sphere by about 200 mln euro (USD242.7 mln) by the end of 2005. The cancellation of night flights carrying correspondence also contributed to the cost reduction. The company replaced the night flights with trucks, which according to data by the company, did not result in time delays for the shipments. Deutsche Post said it expected to save further 300 mln euro (USD364.1 mln) from the measure. The company further plans to consolidate 18 large-sized regional computer data centers, aiming to reduce the number of the globally operating data centers to between three and four. This will bring additional savings of 50 mln euro (USD60.7 mln).

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