Deutsche Post DHL has been forced into a U-turn on its price increases for private customers in Germany following an official investigation by the country’s postal regulator.
DP DHL announced yesterday that it will reverse its price increases for parcels, small packages and additional services for private customers that were introduced on January 1, 2020. The rate reversal will be effective from May 1, 2020.
“The company's objective is to avoid a drawn-out legal dispute with Germany's Federal Network Agency (Bundesnetzagentur) and any confusion on the part of customers with regard to parcel rates,” a statement said.
On January 1, 2020, DHL raised the price for parcels and small packages for private customers by an average of 3% after three years of price stability. This was in response to significant increases in personnel and transport costs, as well as extensive investments in service and quality improvements.
The company said that it informed the Federal Network Agency in the fall of 2019 about the planned price increases and provided detailed documentation establishing compliance with German Postal Act rate regulations.
But the postal regulator responded by calling the new prices “excessive” and, on January 28, 2020, initiated an official review of the new prices. As stated in its preliminary resolution, the Federal Network Agency believes that the price increase effective January 1, 2020 would lead to significantly higher revenues than estimated by DHL.
“Though DHL does not agree with this assessment, it has decided to retract the price increase to avoid a drawn-out legal dispute and any uncertainty with regard to the outcome,” the company stated.
DP DHL said the reversal will first take effect on May 1, 2020 due to time required for IT system updates and changes to customer data at more than 24,000 parcel acceptance points. Until then, the new prices remain valid. Then, beginning on May 1, 2020, retail outlet and online prices for private customers will revert to the prices valid until the end of 2019.
Announcing the pricing investigation in late January, the Federal Network Agency president Jochen Homann said: “There are clear signs that Deutsche Post has unilaterally increased the price of parcels at the expense of private customers. We made it clear to Deutsche Post in advance that we had concerns about the price increase. We will now investigate officially whether Deutsche Post has improperly increased its parcel prices.”
Unlike with mail prices, the Germany postal regulator does not have to approve parcel prices in advance but it can investigate any potential abuses of Deutsche Post’s dominant position in the private parcels market. If it identifies any such abuse, it can then order the company to adjust prices.
