Parcel operators DHL, DPD, GLS and Hermes are planning to hike prices in Germany to compensatefor environmental regulations, higher wages and rising energy costs, the national newspaper Die
Welt reported.Executives of the four companies told the newspaper that prices will rise due to these factorsand others such as higher home delivery costs since recipients are often not at home during the dayas well as pressure on prices from large customers.
For GLS customers, this will result in price increases of 3-5%, CEO Rico Back told Die Welt. “Like we did this year, we will continue to pass on the rising costs to our customers.”
The drawback of these price increases is that GLS is growing at a slower pace than itscompetitors, according to Die Welt. During the last year, its shipping volumes rose only 2%,compared to a double-digit increase at Hermes and 8% at DPD, along with solid DHL growth. With apre-tax profit margin of 8%, however, GLS has clearly ahead of its rivals.
While DHL does not plan any price increases at post offices for private customers this year, itregularly adjusts its individual contracts with business customers. Andrej Busch, head of DHLParcel Germany, explained: “With these adjustments, we target price increases of 4% on average, dueto increased production costs driven essentially by higher transport and energy costs.”
DPD CEO Arnold Schroven also indicated his company would pass the increased costs on tocustomers via price adjustments, Die Welt wrote. Schroven acknowledged that the online shoppingboom is boosting parcel volumes but highlighted fierce competition in this market segment. “Hermesand Deutsche Post are already fighting for orders from Amazon, Ebay or QVC. We don’t want to be thethird one.”
Back also remained cautious saying that Amazon and Ebay were not the main GLS target groups andthat Hermes is not its direct competitor due to its focus on private customers.
Hermes chief Hanjo Schneider confirmed the overall price trend. “Prices will increase further.This is caused by higher logistics costs which are driven by environmental regulations.”
The managerial comments in Die Welt contrast with a recent study by the German InternationalExpress Association (BIEK) in May. This predicted that the German CEP market would grow this yearby 4.8% to volumes of 2.44 billion and by 4.4% to revenues of €14.6 billion. This implies thatindustry managers expect stable prices rather than price increases in 2011.
