Deutsche Post in uproar over planned market changes
Deutsche Post carriers worry they will end up unemployed out in the rain, snow, sleet and hail
At the end of this year, the remains of Germany’s postal monopoly are slated to be fully dismantled. But Deutsche Post says it faces a less-than-level playing field and unfair competition on the open market.
The EU said Germany and four other countries have to fully open up their markets to national and international competition on Jan. 1, 2008, even though the EU’s 22 other countries won’t be required to do the same until 2011.
This means that starting in 2008, Finland’s postal system, for example, can expand into Germany, where the Finnish companies can concentrate on lucrative big-city markets. While facing competition from abroad in the cities, Deutsche Post will also be left to deliver mail to German rural regions — a costlier and more difficult service to provide. If Deutsche Post wants to deliver mail in Finland, however, it will be obliged to fork over 20 percent of its turnover to the Finnish state.
It is that kind of scenario, what Deutsche Post calls a very uneven playing field, that is causing uproar at the former mail monopoly. The German mail carrier has a legal obligation to provide universal service, covering routes that are money making as well as those that are not.
Liberalization woes
Even more troublesome are competing mail services within Germany, which pay their mail carriers lower wages than Deutsche Post, that company’s CEO Klaus Zumwinkel said as he lashed out at EU rules to liberalize postal services, which he called “a true mess.”
The European postal sector was opened to competition a decade ago for the delivery of packages weighing more than 350 grams (12 ounces). In 2003, the measure was extended to items of more than 100 grams and in 2006, to letters weighing more than 50 grams. The latest plan allows competition for letters weighing less than 50 grams.
In July, European lawmakers voted in favour of deregulating the EU market for letter delivery from 2011, two years later than a proposal from the European Commission. Britain, Finland, the Netherlands and Sweden have already opened their postal markets to competition.
Lawmakers see bonus for consumers
The EU has predicted that customers will notice few of the changes. However, lawmakers believe new competitors are likely to try to distinguish themselves from existing state-controlled post offices with lower costs and special services.
Since the partial break up of the German postal monopoly in 1998, Germany’s governing post and telecommunications body has granted some 1,000 business licenses for delivering mail. Unlike employees at Deutsche Post, the mail carriers for these start-ups are often part-time or temporary workers, who don’t enjoy the job security or compensation rates of Deutsche Post employees.
Deutsche Post pays its mail carriers a basic 10.14 euros (USD 13.87) per hour, while the competition pays around 5.90 euros in the east and 7 euros per hour in the west of the country.
On top of that, more and more postal services only pay their mail carriers for mail delivered. This means that in periods of low demand, the welfare office steps in to fill the gaps.
