Competitor Watch

Several of our postal peers have recently reported their results for the quarter ending 31 March 2018.

Deutsche Post DHL overall revenues declined by 1% to €14.7bn, primarily due to fewer working days, the underperformance in DHL Supply Chain and the disposal of the Williams Lea Tag business.

In the Post–eCommerce-Parcel division, postal revenues fell 1.5% on a volume decline of 4.3%. German parcel revenues were up 6.3% and volumes rose 7.4% in the quarter, while Parcel Europe revenues rose 10%. However, a 10% decline in operating profit in the sector was attributed to higher labour costs and capital expenditure, with investments in DP-DHL’s StreetScooter and international parcels business adding to costs.

CEO Frank Appel said that DP-DHL has ‘a lot of work ahead of us during the remainder of the year,’ but was optimistic that global e-commerce growth, which he called ‘the most important growth driver for our businesses’, will bring more positive results to the company later in 2018.

Ecommerce is also becoming an increasingly important revenue factor for Post NL. Revenue derived from ecommerce logistics now accounts for 42% of the company’s total turnover, compared to 34% last year. This is due to the increase in access and end-to-end letters competition following the introduction of new regulatory measures, and acquisitions in logistics services.

During the period, overall revenues increased 1% to €875m, but underlying profits fell 44% as a result of higher operational costs and a negative price/mix effect. Addressed letter volumes fell 10%, while letters revenue declined 6%. On the other hand, parcel volumes increased 25%, with revenues up by 23%. The company said that competition was intensifying in its international markets of Germany and Italy, resulting in a 3% revenue decline and an increasing focus on parcels.

Meanwhile, PostNord said that it was still awaiting a decision from the EU on proposed state aid from the Swedish and Danish governments to fund the proposed Danish postal transformation. The delay means it cannot proceed with planned job reductions and is causing extra costs of around 30m SEK (£3m) a month.

In Sweden, new postal regulation came into force in January, abolishing the requirement for overnight delivery for stamped letters and replacing it with a two-day requirement. At the same time the quality of service was raised from 85% to 95%. The company said this enables it to transport less by air and more by rail, thereby reducing costs and CO2 emissions.

PostNord revenue fell 2% to 9.1bn SEK (£887m) in its first quarter, while operating losses were 74 SEK, compared to an operating profit of 94 SEK last year. Mail volumes declined by 12% overall, 11% in Sweden and 16% in Denmark. Parcel volumes were up 9% driven by e-commerce parcels.