Authors: Annette Hillebrand, Support: Gonzalo Zuloaga, Willem van Linden
Summary
The postal markets are undergoing a profound structural change, both nationally and internationally. Digitisation is changing the forms of communication between consumers, companies and government institutions. Digitisation has also massively expanded the range of available advertising media and intensified the competition for advertising budgets at the expense of print media and addressed advertising mail. As a result, letter volumes have been falling for years, not only in Germany but worldwide. At the same time, the strong growth in e-commerce is leading to an increase in the dispatch of goods and merchandise to consumers.
Over the last five years, the majority of the selected postal operators (Deutsche Post DHL, Österreichische Post, La Poste, PostNL, Royal Mail and PostNord with its subsidiaries Post Danmark and Swedish Posten) have adopted similar strategies to deal with the divergent trends in demand for letter post and goods (small packages and parcels). All of them have expanded sorting and delivery capacities for the consignments of goods and invested in the modernisation and optimisation of processes. Nearly all companies have opted for a nationwide combined delivery of letter post and small packages. In contrast, with the exception of Royal Mail, all selected postal companies rely on separate sorting centres for letter post (including small packages) and parcels. The majority of postal operators deliver letter post, small packages and parcels jointly outside metropolitan areas. The delivery bases serve as consolidation points and are being further developed for this purpose, e.g. as is the case with Deutsche Poste. Overall, the postal companies are also striving to exploit the advantages of an existing, nationwide letter delivery network for the delivery of merchandise and to use delivery capacities that have become available due to the decline in letter volumes. In addition, postal operators put significant efforts to organise the last mile in a more flexible and, for letter post and packages, more open way in order to better cope with the considerable fluctuations in demand for the delivery of merchandise to consumers.
Over the next five years, we expect Deutsche Post to continue to rely on the use of letter operations for the joint delivery of letter post, small packages and, in rural areas, parcels. This strategy tends to support a higher level of quality in universal service, especially in rural areas, compared to a situation without joint delivery. Nevertheless, the considerable fluctuations in demand for the delivery of goods may lead to a temporary deterioration in the quality of letter post. In order to counteract this, the quality monitoring of the Federal Network Agency should be further developed to increase transparency and thus ensure that there is no systematic discrimination against certain types of postal items or customer groups within the universal service.
Discussion paper is available for download.
