BIEK sees competitive imbalance in the parcel market not resolved

The Federal Association of Parcel and Express Logistics (BIEK) expresses dissatisfaction with the amendments to the Postal Act passed by the German Bundestag. Although the market power of Deutsche Post is limited, the competitive distortions in the parcel market are not eliminated.

(Berlin) The Bundestag today passed amendments to the Postal Act that limit the market power of Deutsche Post, but do not eliminate the competitive imbalance in the parcel market. Deutsche Post can still – now even legally enshrined – refinance its costs in the highly competitive parcel market through the state-regulated letter postage. This is not possible for its competitors. Through the inflated letter postage, it receives an additional profit margin that it can invest in the parcel sector without having to earn these investments through parcel prices. The opportunity for a clean separation between the regulated letter sector and the competitive parcel market is missed this time.

No real changes

The amendments passed do not offer any real improvement in the competitive conditions in the parcel market:

1. The approval practice of the Federal Network Agency, which enabled the letter postage increases of Deutsche Post in 2015 and 2019, is now retroactively legalized. Both the Federal Administrative Court and the Administrative Court in Cologne have classified this practice as unlawful in their rulings. Deutsche Post is thus granted more than three times the average return on equity of the DAX-30 companies in the regulated letter sector.
2. The intended separation of the letter and parcel markets is unfortunately not implemented consistently. Through combined delivery, Deutsche Post can still cover costs in the parcel sector through letter postage. In the vast majority of letter delivery districts, Deutsche Post delivers letters, parcels, and packages together, which is fundamentally sensible. However, the costs in the letter and parcel sectors must be clearly separated, which the new regulation does not achieve.
3. Since parcel service providers do not make use of any advance services from Deutsche Post, the new regulation on the price-cost gap is of no significance to them.

Unbalanced and detrimental to competition

“The amendments to the Postal Act are too unbalanced against competition in the parcel market and are not in line with the objectives set out in the coalition agreement,” explains Marten Bosselmann, Chairman of the Federal Association of Parcel and Express Logistics. They undermine the efficiency requirement of the Postal Act and also central EU legal requirements.

“All parcel services together already ensure the comprehensive supply of the population with parcel services – from the Hallig to the alpine pastures, in rural areas and in cities. They are investing massively in future topics,” says Marten Bosselmann. These include good workforce, optimization of working conditions, digitalization processes, alternative drive technologies, increasingly sustainable and efficient urban logistics, and much more.

These necessary investments are only possible if they can be refinanced in the market. “The conditions must therefore be the same for all market participants – for the benefit of consumers and the innovative strength of companies. The announced major amendment to the Postal Act in the next legislative period is therefore all the more essential.”

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