A 15 percent wage increase would change mail delivery

This week Deutsche Post comes out with something new. The largest mail carrier in the country is issuing a "special postage stamp series" under the name "Beliebte Pets". The first stamp in the series shows a cat. Reason: "With around 16.7 million copies, the house tiger is the undisputed number one in the popularity list in this country," writes the Post.

But maybe the letters with the cat postage will end up in the recipient's mailbox later than usual in some parts of Germany. After all, the signs in the postal group are currently pointing to a storm: in the past few days, around 42,000 employees in the parcel and letter centers and in delivery have been on an all-day warning strike.

WELT answers the most important questions for postal customers about the smoldering tariff dispute.

This possibility is not all that unrealistic. In the run-up to the collective bargaining dispute, the Verdi union asked the 160,000 employees whether they were willing to go on strike and came up with an overwhelming majority for a possible strike. According to the union's negotiator, Verdi Vice President Andrea Kocsis, the postal board has made it clear in previous rounds of negotiations that it is "not willing and not able to compensate for the real wage losses of the employees".

So the sides are far apart. The last postal strike to date was almost eight years ago. Since then, there have been moderate tariff increases. The mood among the mail carriers is now likely to be different. In the middle of next week, the collective bargaining will be continued over two days, the place of negotiation is Düsseldorf.

The union argues with the postal group's pre-tax profit for the past year of around 8.4 billion euros. However, less than 15 percent of this comes from the letter and parcel service in Germany. The main profit generators for the group are the subsidiaries DHL and the global express service there.

But with the record profit as an argument, with the burdens from the Corona period and the high inflation rate in mind, the union side has sufficient prospects of a significant wage increase. The wages of the deliverers are definitely not lavish: almost 90 percent of the employees work at the post office in the so-called pay groups one to three with a monthly basic salary between 2108 euros and 3090 euros gross.

The postal board, on the other hand, has already hinted that the nationwide postal delivery of letters in Germany could be jeopardized if a high wage agreement were reached. From a legal point of view, the corporation can hand this task back to the state. Then the post would have to get support from the federal government or it could withdraw from parts of the delivery. As a result, jobs in the company could be lost or the work could be outsourced to subcontractors.

In fact, the federal government is indirectly involved in the dispute. A new postal law is supposed to be in place by the summer, after a decade of unchanged rules. The postal board has already made demands on politicians and expects simplifications, for example in the duration of letter delivery.

So far, 80 percent of the daily letter volume has had to be delivered the day after it was put in the mailbox. The board speaks openly of relief in the delivery costs, without which the current supply could not be maintained. Higher letter postage is also on management's wish list.

The first cornerstones of the new postal law show that the responsible Federal Network Agency is planning changes. In fact, the regulations on postal delivery are as strict as in Germany in hardly any other country in the European Union. In Scandinavia or southern Europe, shipping takes significantly longer and postage is higher.

Customers can dodge, even if there are different chances of success. In the case of letter mail, the choice of providers is significantly smaller – unlike for parcels. According to a survey by the Federal Network Agency, Deutsche Post controls around 85 percent of the mail market. There are only significant competitors in a few large cities.

Even two decades after market liberalization in Germany, there is still no extensive nationwide network of private letter services. In many cases, these delivery companies themselves use the postal group for the distribution of letters across the country. Letter senders often only have to switch to digital mail and e-mail contact.

The situation is different for parcels, where the Post subsidiary DHL has a market share of around 40 percent in Germany. Competitor Hermes, for example, also offers private customers a parcel service. Competitors such as DPD, GLS or UPS focus on shipping between business customers.

This comparison of numbers makes it clear: the last tariff increase at Swiss Post in January 2022 was two percent. The agreement dates back to the Corona period. In the current bargaining round, Verdi is demanding a wage increase of 15 percent for the approximately 160,000 employees at Deutsche Post AG with a contract term of twelve months.

The demand is at the upper end compared to other economic sectors or even the public service. And another comparison: With the letter and parcel service, the postal group achieved a good one billion euros in profit before taxes last year. According to reliable industry estimates, around 750 million euros of this comes from the mail service. If Verdi's tariff of 15 percent were to be implemented, this money would be gone.

The rest of the sum would then not be enough for already planned investments in new buildings and vehicles, which are intended to reduce the emissions and environmental impact of mail delivery. In addition, according to data from the Federal Network Agency, the trend in letter delivery is downwards. Letter volumes have recently fallen by between two and four percent each year.

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