GLS to raise prices next year after moderate 2012 growth

GLS Group is expecting a moderate rise in pre-Christmas volumes this year which would be about30% more than the usual volumes during the year and is planning to hike prices in Germany by 6.8%

The Royal Mail European parcels subsidiary’s earlier forecast of a moderate volume increase forthis year is being confirmed, Back said. Moreover, revenues are rising more slowly than volumes.This is due to growth being generated mainly in the B2C sector where deliveries tend to be morecomplex. This reflects the increasing shift from B2B to B2C shipments as many customers no longeronly serve retailers but also end-consumers directly.

“In 2012, we have further deepened our expertise as a B2C parcel service provider. In manycountries, GLS parcel shops play a key role as an interface between shippers and recipients in theB2C sector. Since the introduction of the FlexDelivery-Service, we have been offering a wide rangeof alternative delivery options to private customers in Germany,” Back said.

For the peak Christmas season, GLS is adjusting with additional depot workers, drivers andvehicles. During this time, it tries to avoid changes in IT and service structure and only takes onnew customers if the service for its existing customers can be maintained at the same quality, Backexplained.

In countries where weather conditions can hamper the operations, drivers and vehicles areprepared accordingly, for example with special driver trainings, winter diesel, etc. In addition,GLS introduced the FlexDelivery service well before the Christmas season to improve the efficiencyof ‘last mile’ deliveries.

Looking ahead to next year, GLS expects the volumes of the CEP industry to continue growingslightly both in Germany and Europe. “Thereby, we expect an even stronger shift of the B2B/B2Cbalance towards the B2C business. But the trend clearly shows that the prices in Germany have to goup to the benefit of the market participants in the long term,” Back said.

In response to rising costs, Back disclosed that GLS Germany plans to increase its prices by6.8% from 1 April 2013 onwards. “We are also anticipating strong volume fluctuations,” hecommented.