The end of free delivery? PostNL to raise its prices

The end of free delivery? PostNL to raise its prices
Credit: The Brussels Times

Post and parcel delivery company PostNL warned that it will have to raise its prices because of the high inflation and rising fuel costs, raising questions about whether the end of free package delivery is near.

Following the peak during the Covid-19 pandemic, when business was booming for e-commerce and home delivery services, the number of parcels being sent and delivered is dropping.

"We are taking extra measures to control costs and adapt to the difficult external circumstances," said PostNL CEO Herna Verhagen in a statement. However, "it is clear that these increased costs cannot only be made up for through improved efficiency and productivity; price adjustments will also be necessary in the near future."

Details about how much the new rates will be for sending parcels, for example, are not yet mentioned. However, the price hikes will likely not be introduced until next year. Verhagen also pointed out that inflation is also putting pressure on consumer spending. "This is visible in the development of package volumes and leads to unpredictability."

'Strong headwinds'

Still, PostNL's market share remained stable, even if the company is slightly lowering expectations on their operating profit for the whole of this year.

Belgian post company Bpost also presented its results for the second quarter last week, and mentioned that the rising inflation was making itself felt as well.

"​As strong headwinds from inflation, wage indexations, transportation and energy costs and consumer confidence continue globally and continue to create uncertainty in the quarters ahead, we will continue to take action at all levels to phase out and mitigate these negative effects," said Dirk Tirez, Bpost group's CEO, in a press release.

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Due to the additional indexation of wages, €24.5 million will have to be paid out instead of the €17 million previously expected. Still, the company is currently at 57% above the volume of parcels sent in the second quarter of 2019, before any Covid-related restrictions were introduced.

"That in itself is still a large increase if you compare that with that figure. During the spring of last year, we were still in a lockdown and turnover decreased by 12.9% compared to that," spokesperson Veerle Van Mierlo told De Morgen.

While there will not be a general price increase, Bpost does take into account inflation and existing contracts, she added. "For example, a price increase has been implemented for our business customers. We review the rates every year, taking into account external factors and, for example, also the volume of the customer."

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