Swiss Post keeps pricing, absorbs VAT rise

Swiss Post is not planning to raise the prices of its standard service for letters and parcels in 2011. However, the operator has decided to make certain changes to some loss-making additional services and other specific services, it said.

Swiss Post will also absorb the VAT increase that will come into effect on 1 January 2011.

Most of these services are offered in competition with other providers. Measures that affect the monopoly services are subject to approval by the Federal Department of the Environment, Transport, Energy and Communications (DETEC). Swiss Post has submitted a corresponding request to DETEC and informed the price supervisory authority.

The measures are scheduled to be implemented on 1 April 2011.

Swiss Post said it regularly reviews its range of services both for the reserved services (monopoly) and for those provided in competition with other service providers. On this basis, it has adjusted its range of services each year. Some changes to letter and goods shipping services are planned for 1 April 2011. These concern loss-making niche/additional services as well as certain specific services.

A company spokesman said: “For private customers, the Registered’service will in future be an additional service for A Mail letters, and the overall price will not change for the most frequently requested registered letters. In future, returns of B Mail business customer letters, journals and magazines with an invalid address will be billed according to the ‘originator pays’ principle for business customers.

“Swiss Post, on its part, provides business customers with options to improve the quality of addresses used for mailings. This is intended to encourage business customers to keep their address databases up-to-date. The additional service Consignment tracking (Track & Trace) will be introduced for the dispatch of debt collection documents.

“Furthermore, a new paperless COD service for parcels and letters will be introduced. This will further simplify the business process for customers. Moreover, the price for the additional Manual processing service for parcels with special dimensions, which can only be processed manually, will be increased slightly.

“The service for unaddressed promotional mailings (PromoPost) will also be adjusted as of 1 January 2011. Services and prices relating to the P.O. box offering will be subject to new pricing. Services that until now had been provided free of charge will continue to be offered for free. Changes to the service range and to prices will also apply to express and bulky goods services. For the next-day Swiss-Express Moon and the Swiss-Express courier ‘Lightning’ services, the second delivery will be offered free of charge in future.”

By making these adjustments to its range of services and prices, Swiss Post aims to make adjustments to its range of services, improve its ability to cover costs on loss-making services and offset accrued inflation.

For most of the services in question, Swiss Post competes with other service providers. Measures that affect the monopoly services are subject to approval by the Federal Department of the Environment, Transport, Energy and Communications (DETEC). These are the changes to returns of B Mail business customer items, registered letters and debt collection documents which weigh less than 50g.

On 1 January 2011, the Confederation will raise VAT by 0.4 percentage points. Swiss Post will absorb this increase. For business customers entitled to claim input tax deduction, this represents a virtual price reduction of around CHF 4m. This comes after Swiss Post also refrained from passing on VAT costs amounting to around CHF 100m per year to Swiss business customers after the letter monopoly was lowered to 50g on 1 July 2009.

Prices for domestic and international letters and parcels in Swiss Post’s standard range will remain unchanged in 2011. Whereas prices were adjusted for parcels as of 1 April 2010, the prices for A and B Mail standard letters have not been increased in Switzerland since 2004. Studies show that Swiss Post’s letter and parcel prices are among the lowest in an international comparison.

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