Hermes Logistik Group to undercut Deutsche Post by 10-15 pct if minimum wage dropped

Hermes Logistik Group, the postal-services unit of privately held mail-order retailer Otto Group, plans to undercut Deutsche Post AG.’s letter prices by 10 percent to 15 percent should German courts strike down the minimum-wage rule for the industry, Hermes Chief Executive Hanjo Schneider told Die Welt.

Schneider said the group hopes to enter the market for letter delivery — still dominated by former monopoly Deutsche Post — in January 2009 but legal uncertainties are keeping him from making a forecast.

Should the highest German court squash the minimum wage rule, Hermes will immediately start offering letter delivery from all of its 13,500 German packet receiving offices, he said.

A Berlin court ruled in March that a German law imposing a minimum wage at all companies in the letter-carrier industry is illegal.

A higher court probably will rule on the issue in July, Die Welt quoted Schneider as saying.