GLS will maintain its surcharge for home deliveries in Germany and raise prices by about 7-8% again next January as it tackles rising costs, invests in additional capacity and also moves to climate-neutral deliveries from October.
The parcel carrier already introduced a year-round surcharge for home deliveries of about €0.50 per parcel (depending on individual contracts with shippers) last year and put up prices by about 7-8% in January this year.
GLS Germany managing director Martin Seidenberg told German trade publication Eurotransport in an interview: “We plan to increase prices again next year by a similar amount.”
He explained: “We suffered from enormous cost pressure last year and the trend is continuing.” The company needs to invest significantly in capacity expansion to cope with rising volumes, faces problems finding sorting and delivery staff, will have to pay a higher minimum wage from January, and suffers from widespread congestion and traffic jams on roads in Germany, he said.
Seidenberg also emphasised that GLS Germany will continue to add a surcharge for home deliveries “because the whole delivery process there is much more expensive” than, for example, a B2C delivery to one of the company’s 6,000 parcel shops for collection by the customer. “We want home deliveries to private addresses to become a premium service,” he commented.
GLS’ head of communications and marketing, Anne Putz, confirmed the pricing measures to CEP-Research today. On capacity investments, she said: “We are investing more than €50 million in expanding capacity in 2019-20. Those are new buildings in Mannheim and Essen, modernisation of existing locations, such as new sorting systems in Neuss, and other measures.”
Meanwhile, GLS Germany will improve its sustainability by shipping all parcels ‘climate-neutral’ as of October. The company will fully compensate for the 160,000 tonnes of CO2 generated by its transportation and delivery activities, while investing in measures to reduce and avoid emissions.
Under the new ‘GLS KlimaProtect’ strategy, the company will compensate for emissions through certified forestation projects, switch to 100% sustainable electricity, expand its fleet of electric vehicles and develop emission-free deliveries in city centres.
“Our customers demand sustainable parcel logistics and are ready to jointly take on responsibility for climate protection,” Seidenberg said in a statement. “We are now setting an example and are introducing 100% climate-neutral shipping from October and will therefore compensate for about 160,000 tonnes of CO2 per year.”
He continued: “The switch to climate-neutral shipping is an important element in sustainable parcel logistics. However, delivery concepts that protect the environment require high investments and result in higher costs. Electric delivery vehicles, for example, generally have less loading capacity and a much shorter driving distance.
“Together with our customers we will develop future-oriented parcel logistics. We will share the costs of GLS KlimaProtect with our customers through a contribution of 3.5% of the parcel price on average,” he made clear. Customers have been able to make voluntary contributions to climate-neutral shipping since 2011 through the ThinkGreenService.
At present, GLS has about 100 electric vehicles in operation in 20 different projects across Germany. It is testing emission-free deliveries in Düsseldorf and aims to introduce similar projects in other German cities.
In the 2018/19 financial year, the Royal Mail Group subsidiary increased revenues in Germany, its largest single market, by 9% driven by international volumes and improved pricing but its operating profit margin dropped due to increased cost pressures and driver shortages.
