Austrian Post to raise rates for first time in four years
Austrian Post is raising its rates from the beginning of March 2015, to cope with the long-term decline of the letters business and rising labour costs. The company is raising its Premium (next day) domestic letter rate by 6.4% to 68c and the Economy option for business letters will rise 8.8% to 62c.
Other price increases for letter formats will be along these lines.
The Large Letter format, which is often used for e-commerce items, will see rates rise by a slightly lower 5.3%, to EUR 4.00 per item, as the Post continues to court the fast-growing online shopping market.
The company said the rate increase was related to inflation, which has climbed by 10% since the last Austrian postage rate increase in 2011.
Some “slight” adjustments are set to come into force in January 2015 for parcels, for example a 2.9% increase to the rate for domestic parcels under 2kg in weight, to EUR 4.60.
The rate increases have been approved by national regulators, Austrian Post said, adding that it will put Austrian postage rates “mid-table” in the international rankings.
Georg Pölzl, the Austrian Post chief executive, said: “This inflation adjustment secures the sustainable development and innovative strength of Austrian Post in spite of rising costs and declining letter mail volumes.”
Pölzl said his company had been investing in the expansion and improvement of its retail network, and that in future it needs to invest in the upgrade of its logistics infrastructure and service quality.
“We are fighting for every letter through broad-based sales initiatives, product innovations and the steady increase in availability of the postal network,” he said. “In future, we will prioritise our investments designed to enhance customer convenience. For example, one of our goals is to increase the number of Post Pick-up Boxes to 10,000 units.”
Austrian Post said it believed that on average, its rate increases would result in an extra cost of one euro for each Austrian citizen based on average mailing habits.
But, it said sustaining a high level of postal services in the medium to long term would only be possible if inflationary costs were factored into pricing policy, maintaining a profit margin (EBITDA) of around 12%.
As a result, the company is seeing reforms that would see postal rates continually keeping pace with inflation.
Austrian Post had a stable revenue in the first half of 2014, but a slight drop in mail revenue thanks to its declining mail volumes. The parcel business continued to achieve “solid” growth thanks to e-commerce.
The company generated EUR 2.37bn in revenue in the full year 2013 (up 0.8% year-on-year), with pre-tax earnings at EUR 186m (up 2.2% on the previous year).
