BIEK criticizes Verdi’s demand for a ban on subcontractors

The report submitted by Verdi last Friday, which reiterates the demand for a ban on contractors in parcel delivery, is largely based on incorrect, incomplete, and one-sided assumptions about working conditions in the parcel industry.

(Berlin) It disregards the actual circumstances and arrives at legally untenable results with its demand for a professional ban on medium-sized parcel companies. Numerous allegations are simply wrong in their generality and discredit an entire industry without any solid basis. Furthermore, the report commissioned by the union-owned Hans-Böckler-Stiftung is based solely on interviews with employees of Verdi and the DGB’s “Consulting Network for Fair Mobility.” The companies in the parcel industry were not consulted.

We explicitly contradict the following allegations:

1. Allegation:Precarious working conditions prevail in the parcel industry, which can only be eliminated by banning contractors in delivery.

Clarification: In the courier, express, and parcel industry (KEP), responsible companies fundamentally operate. The contractors of KEP service providers are the real middle class in Germany and not sole proprietors. There is no justification for special regulations in the parcel industry. The results of nationwide focus inspections by the General Customs Directorate show that the KEP industry does not exhibit systematic irregularities. The Parliamentary State Secretary in the Federal Ministry of Economics, Stefan Wenzel, commented on this in the Bundestag in January of this year: “The available experiences demonstrate that the courier, express, and parcel service industry is relevant for the activities of the Financial Control of Illegal Employment. However, ‘systematic legal violations’ could not be identified in the industry.”

For employees in service contracts who are employed by contractors in parcel delivery, the Protection Against Dismissal Act, the Fixed-Term Employment Act, and the Works Constitution Act apply, among others. Service contracts are therefore by no means a means to circumvent labor law protection standards.

1. Allegation:Parcel service providers should be required to organize work and operations in accordance with labor and occupational safety regulations. This is currently not the case.

Clarification: The applicable rules and laws, including the Minimum Wage Act, the Parcel Delivery Protection Act, and the Supply Chain Due Diligence Act, are of course complied with and are sufficient. Furthermore, the KEP industry has voluntarily agreed on further standards: The contractors in delivery demonstrate compliance with legal requirements with the state-accredited quality seal PQ KEP. The parcel service providers also use their own auditing systems to monitor compliance with regulations among contractors. For years, efforts have been made within Health & Safety programs to further improve working conditions. The relief of employees through digital tools and the use of protective and assistance equipment is enforced. Motivated and healthy people are the key to success.

1. Allegation:The contractors are almost exclusively either micro-enterprises or sole self-employed parcel deliverers.

Clarification: The large parcel service providers have around 4,000 contractors who handle the transport of KEP shipments. Most of these contractors are medium-sized companies. 44% of the contractors employ between 10 and 19 people. In the overall economy, this figure is only 11%, and 85% employ 1 to 9 people (in the KEP industry, this figure is only 42%). The share of micro-enterprises in the KEP industry is therefore significantly smaller than in the overall economy (see KEP Study 2023). The involvement of sole proprietors is not in the interest of parcel services, as they need contractors who provide them with long-term planning security. Only in this way is the high performance level of the industry possible.

1. Allegation:The health burden from heavy packages is too great.

Clarification: The average weight of a shipment is 4.8 kg. It is continuously decreasing. The number of heavy packages is low (2.5% to 3.5% of shipments weigh over 20 kg) and is concentrated in the B2B sector, where transport aids are standard equipment. The handling of heavy packages cannot be considered characteristic of parcel delivery.

1. Allegation:Deliverers must deliver up to 300 shipments per day.

Clarification: The average number of shipments in a conventional delivery vehicle is 160.

1. Allegation:The profits of the large parcel service providers are enormous and continue to rise.

Clarification: Here, profits are confused with revenues. Revenues are increasing because demand and thus shipment volumes are rising. The average revenue per shipment rose nominally to 6.26 euros in 2022. This value is nominally about 20 cents above the value from ten years ago. However, adjusted for inflation, the value for 2022 is only 5.57 euros, which is below the value from ten years ago (see KEP Study 2023). This shows that the nominal increase has not been sufficient to offset the price increases of recent years.

Nevertheless, parcel services are investing massively in future topics. This includes investments in workforce acquisition, optimization of working conditions, digitalization processes, alternative drive technologies, and particularly in increasingly sustainable, lower-emission, and more efficient urban logistics. It is important that the announced amendment to the Postal Act eliminates a significant competitive imbalance: Through state-regulated excessive postal rates, Deutsche Post currently receives an additional profit margin that it can invest in the parcel sector without having to earn these investments through parcel prices. This is not possible for competitors.

Deep intrusion into professional freedom

The report fails to recognize the legal standard of review. A ban on contractors in parcel delivery deeply infringes on the professional freedom (Art. 12 GG) of partner companies, as their professional activity is prohibited. Such a serious objective restriction of the choice of profession cannot be justified according to the jurisprudence of the Federal Constitutional Court.

The fact that the Parcel Delivery Protection Act introduced a liability for social security contributions is hardly mentioned in the report. Nor is it mentioned that the parcel industry has established a pre-qualification option for contractors that is controlled by state accreditation. However, this demonstrates that parcel service providers do not relinquish their legal responsibility by commissioning contractors in parcel delivery.

A ban on contractors in parcel delivery makes no qualitative difference to the legal situation of employees. Regardless of whether they work for a large, medium, or small company – what matters is that the companies behave in compliance with the law towards the employees.

If labor law requirements are violated, they must of course be consistently punished. For this purpose, the members of the Federal Association of Parcel and Express Logistics have been fully supporting the customs and the Federal Network Agency for years.

Why are contractors used in parcel delivery

All parcel service providers that deliver throughout the country conclude service contracts with contractors in parcel delivery. The main reason is that they can utilize the advantages of a division of labor in the economy. In the parcel industry, it can be advantageous to deploy small vehicle fleets very efficiently in a decentralized manner or to manage small numbers of employees more efficiently than large workforces. Small companies can thus participate in the global parcel market without having to build a nationwide network. Many employees also find it more pleasant to work in a small family business than in a large corporation. Contractors can also take on additional tasks besides parcel delivery to better utilize their vehicles. These can be tasks that require regional specialization and would therefore not be accepted by large companies.

Freedom of contract guaranteed by the Basic Law

The Basic Law guarantees freedom of contract. Every company is free to choose with whom it enters into contracts and what the contents of the contracts are. The entrepreneurial creativity of thousands of contractors contributes to job creation and enables the KEP industry to make a significant contribution to society with its value creation. In short: KEP strengthens and needs the solid German middle class.

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