DPD, the German-based B2B parcel operator, plans to increase prices by up to 3.5% this year, asenior manager told the annual German CEP congress yesterday. This follows the recent announcement
by rival GLS of a similar price rise.“Our intention is for an increase of 3.5%,” Arnold Schroven, joint CEO, told some 100conference participants. “Costs are increasing and we cannot avoid price increases.”
The increase was “inevitable” due to rising operational costs, including higher salaries fordrivers and more expensive fuel, he said.
Due to a large number of long-term customers with contractually fixed prices covering severalyears, however, DPD would be satisfied to achieve a 2.5% increase across all its volumes, Schrovenadded.
Hermes Logistik, number two behind DHL in the consumer parcels market, was also looking at aprice increase of 2-2.5% this year as a result of the VAT increase from 16% to 19% at the start ofJanuary, managing director Hanjo Schneider told the conference.
GLS announced in mid-February that it would increase prices in Germany by 3.5% from April 1,also citing higher operational costs, including capacity shortages and new legal restrictions suchas changed driver hours. According to CEP-Research information, UPS introduced a small priceincrease in Germany at the start of the year, while FedEx is expected to announce new prices inApril.
Asked about DPD’s new arrangements for international parcels following the end of the FedExagreement and the new deal with TNT Express, Schroven said that five countries (France, Spain,Netherlands, Belgium and Luxembourg) are now using TNT Express for outbound intercontinentalparcels. Other DPD franchisees were free to choose their preferred carrier, which could also beFedEx.
In response to a question about the option of air express following GLS’ decision to launchits own flights, Schroven said that DPD would observe the market “very carefully” but did not seeany need to take action in the immediate future. If DPD did ever decide to move into air express,it would not necessarily have to use one of the four integrators for uplift but could use anothernetwork with daily flights, he pointed out.
On DPD’s plans for the postal market following full liberalisation in January 2008, Schrovensaid that he only saw potential if Deutsche Post’s exemption from having to charge VAT on lettersand small parcels was scrapped, and all operators were liable to VAT.
