Deutsche Post given green light to raise prices

German regulators have given the green light to Deutsche Post to make the first increase to domestic mail rates for 15 years. The Federal Network Agency agreed that the German national postal operator had “exhausted” its ability to improve service efficiency, and needed a price increase to sustain its service quality.

Rates for standard domestic letters (up to 20g) will rise 5% from 55 cents to 58c, while large envelopes (up to 1kg) will have rates increased 9%, from EUR 2.20 to EUR 2.40.

Prices for postcards, compact letters and large letters will remain the same as this year, respectively 45c, 90c and EUR 1.45. Domestic Registered mail and cash on delivery rates will also remain the same.

For international mail, standard letters up to 20g will remain unchanged, as will the Großbrief, the Maxibrief and postcards sent outside Germany. International compact letters (Kompaktbrief) weighing up to 50g will see prices rise from EUR 1.45 to EUR 1.50, while the per-letter rate for international mail sent at the kilo-rate will rise from 51c to 54c.

The new rates will apply for the whole of the calendar year 2013, as of 1st January.

“Exhausted”

Jochen Homann, president of the Federal Network Agency, said today that over the past decade Deutsche Post had been set a tough price cap and targets to improve its productivity by more than 20% so that postage remained stable despite inflation.

“This makes Germany about average for postal rates in Europe, but with high quality delivery services,” he said.

“However, Deutsche Post has in recent years clearly exhausted its potential for efficiency improvements, so with the latest approval we have recognised that they have demonstrated the need for cost increases.”

The Federal Network Agency said the average individual would only face a 10-cent increase for sending letters each month, an “acceptable” burden according to Homann.

Deutsche Post filed its request for postal rate increases earlier this month, stating that it had no other option in light of the “challenging” economic situation at the moment.

The company said it needed the rate increases to cope with rising staff wages and falling mail volumes.

The last postal rate increase for the standard domestic letter in Germany was seen in 1997, with rates reduced in 2003.

Deutsche Post says adjusting for inflation, Germany postal rates have fallen 17% in real terms in the 10 years up to 2011.