Tag: Domestic

Deutsche Post CFO says minimum wage to have 'no immediate effect' on costs

Posted by | Dec 21, 2007 | |

Deutsche Post World Net AG’s Chief Financial Officer John Allan said a minimum wage for postal workers recently approved by Germany’s government will have ‘no immediate effect’ on the company’s cost structure.

‘We pay at least this wage level throughout the German mail services business,’ he told a company newsletter in an interview.

The upper house of Germany’s parliament yesterday approved the introduction of a minimum wage at 8.00-9.80 eur per hour for postal workers. The minimum wage is expected to hurt primarily Deutsche Post’s smaller competitors.

And commenting on government plans to liberalize the letter mail market next year, Allan affirmed Deutsche Post’s previous statements that liberalization could lower earnings before interest and taxes by 10-20 pct.

Allan also brushed off concern that a possible abolition of Deutsche Post’s exemption from German value-added tax could hurt results.

‘There is no reason for us to speculate about any consequences as there’s no evidence whatsoever that we would lose the exemption,’ he said.

Under current rules, Deutsche Post’s basic postal services are exempt from the 19 pct VAT while comparable services provided by rivals are not, even after Deutsche Post’s monopoly on delivering letters expires at the end of the year.

Deutsche Post obtained the exemption in exchange for the guarantee that it will deliver mail to every household in Germany.

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Restriction for postal licenses lifted

Posted by | Dec 20, 2007 | |

Kurth: “The formal foundations for further competition have been laid”

On 31 December 2007 the monopoly of Deutsche Post AG for letters with a maximum weight of 50g comes to an end. In a general order published in its Official Gazette on 19 December 2007, the Federal Network Agency has therefore lifted all material restrictions of the licences, such as the obligation to provide higher quality for letters weighing less than 50g. From 1 January 2008 all licensees – including Deutsche Post AG – can then offer all mail services in their license areas and are free to decide about the configuration of their services at their own discretion.

“With this general order we are laying the formal foundations for further competition in the postal market, without much bureaucratic effort. This will prepare the way for creative business models and flexible solutions. A realistic analysis and assessment reveals that the liberalisation of this market definitely offers opportunities for a further development of competition – despite the controversial debates of recent weeks,” emphasised the president of the Federal Network Agency, Matthias Kurth.

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USPS updates its Transformation Plan to reflect new law and new technologies

Posted by | Dec 20, 2007 | |

The Strategic Transformation Plan 2006-2010, the Postal Service roadmap for the future, has been updated to reflect changes from last year’s passage of the Postal Act of 2006. The law makes a number of changes to postal oversight and regulation, but does not alter the Postal Service’s mission – providing trusted, affordable and universal service. Among the opportunities is new flexibility to customize products and prices to meet customer needs. The Postal Service now also has the ability to retain earnings and invest profits back into the business. New challenges include the Consumer Price Index-based price cap for mailing services such as First-Class Mail and Standard Mail. The update notes that cost-control strategies will be expanded beyond the aggressive efforts taken so far. The Postal Service will continue to reduce costs by at least USD 1 billion every year by expanding standardization and automation. This effort will be given a boost in the coming year as the Postal Service begins deployment of its new Flats Sequencing System. Known as FSS, this new equipment automatically sorts flat-shaped mail in the order in which it will be delivered. The update also describes how technology is being applied to add customer value. Most significant is the Postal Service’s rapid expansion of Intelligent Mail, which uses new barcodes and systems to provide end-to-end visibility of mail. Intelligent Mail will also enable an expanded service measurement. The system will be developed and tested in 2008 in tandem with implementation of modern service standards for all mailing services.

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New Royal Mail postage prices for April 2008

Posted by | Dec 20, 2007 | |

Royal Mail said today the price of a First Class stamp for a standard letter weighing up to 100g would rise 2p to 36p from April 7 2008 in line with the price controls set by the regulator, Postcomm, in 2006.

A Second Class stamp for a standard letter weighing up to 100g will rise 3p from 24p to 27p.

When the new prices take effect, Royal Mail’s stamps will still be among the very lowest priced in Europe. The average household now spends 50p a week on stamps, a fraction of the amount spent on telecoms.

Stamped mail makes an average loss of around 6p per letter and packet – and it will continue to be loss-making as the increases will not be sufficient to cover the deficit. The total loss last year on stamped mail was GBP 178 million.

Business customers who use franking machines will continue to get a discount against the price of a stamp. A franked, standard First Class letter will increase by 2p from 32p to 34p in April, while a standard Second Class franked letter will rise 2p from 22p to 24p, increasing the discount for Second Class franked mail discount from 2p to 3p.

For the first time, medium-sized businesses will get discounts on volume – the more they post, the lower the postage bill.

The full details of new prices are published on Royal Mail’s web site. Prices for bulk mail will also be changing, and in some cases will fall in real terms. Some prices for heavier weight items will also be falling to improve Royal Mail’s competitiveness in the growing home-shopping market.

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Salary negotiations for 2008 completed at Austria Post AG

Posted by | Dec 19, 2007 | |

The salary negotiations for the employees of Austria Post AG have finally been completed.

After several weeks of bargaining, the two negotiation teams agreed – pending approval by the Supervisory Board – on a 3 pct increase for 2008 for salaries based on the collective salary agreement as well as for civil servant salaries and special contract salaries.

Any supplementary remunerations and allowances will likewise be raised by 3 pct for the coming year.

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