Germany to end monopoly in letter delivery-media
Germany does not plan to extend Deutsche Post’s (DPWGn.DE: Quote, Profile, Research) monopoly for delivering standard letters beyond the monopoly’s current expiration date in 2007, a magazine reported on Sunday.
The government does not think it is necessary to extend the monopoly, which keeps Post’s rivals including United Parcel Service (UPS.N: Quote, Profile, Research) , FedEx (FDX.N: Quote, Profile, Research) and its European peers from collecting and sorting letters of up to 50 grams, German newsweekly Focus reported.
The magazine cited as its source a statement drafted by the government in reply to the German postal service regulator’s annual report. Neither document has yet been made public.
The postal regulator is set to publish its report in the next few days, the newsweekly said.
About 70 percent of Germany’s letter delivery market, worth 6.8 billion euros ($9.2 billion), remains a monopoly for Deutsche Post — a former state agency in which the government still owns 56 percent through direct and indirect holdings.
Memphis Business Journal 27 Dec 04
FedEx rival to lose monopoly
FedEx got some potentially good news Sunday from an unexpected overseas source, when a German news magazine reported that the government will not extend Deutsche Post’s monopoly for delivering standard letters beyond 2007.
About 70% of Germany’s letter delivery market, worth $9.2 billion, remains a monopoly for Deutsche Post — a former state agency in which the government still owns 56% through direct and indirect holdings.
The monopoly keeps FedEx (NYSE: FDX) and its rivals, including United Parcel Service (NYSE: UPS), from collecting and sorting letters of up to 50 grams.
Among its 20 peers in the Dow Jones Transportation Index, FedEx ranks No. 8 in earnings growth, with a 35% increase in the past year.
UPS ranks No. 10 on the Transportation Index, with growth of 18% over the past year.
It’s not the first time FedEx, which is based in Memphis, has gone up against Deutsche Post.
In 2001 and 2002, FedEx and UPS tried to block the entry of DHL and DHL Airways into U.S. markets, claiming that they were owned by Deutsche Post and thus were government-subsidized. The U.S. Department of Transportation ruled in favor of DHL.
FedEx Corp., which employs 30,000 people in Memphis, offers services through a network of subsidiaries operating independently. Those companies include FedEx Ground; FedEx Express; FedEx Freight; FedEx Kinko’s; FedEx Custom Critical; FedEx Trade Networks; and FedEx Services.
The government of Germany now believes it unnecessary to extend the Deutsche Post monopoly, according to Focus magazine.
The magazine cites as its source a statement drafted by the government in reply to the German postal service regulator’s annual report, according to Reuters. Neither document has been made public yet.
The postal regulator is set to publish its report in the next few days, according to Focus.
Reuters reported the story in the U.S. on Sunday.
