Liberalisation of the German mail market
Liberalisation of the German mail market started at the beginning of the 90s and proceeded in stages thereafter. This development was a follow-up to liberalisation in the telecommunications sector, itself closely linked to the post sector at that time. EU mail policy also proved to be a determining factor for further changes in the German mail market.
Adoption of the German Postal Reform Act in 1997 proved to be an important milestone in the liberalisation process. The Act effectively replaced the previous monopoly situation with a new framework based on competition, at the same time successively limiting the exclusive licence held by Deutsche Post. The objective of the Postal Reform Act was to ensure basic country-wide postal services for the population within a fully functioning system of free competition. This was achieved in a series of liberalising moves, ending with the reduction of weight limits on which Deutsche Post’s exclusive licence depended. As a result, the market became completely liberalised at the start of 2008.
The goals behind liberalisation are:
- Innovative, customer-orientated services
- Greater quality of service
- Lower prices
- Higher productivity
Liberalisation especially relevant to higher quality services and mass mailing
Due to licensing policy, liberalisation in Germany started in the higher quality services and mass mailing (advertising) segments. The market share held by private delivery services two years after liberalisation accounts for around 10% of the licensed mail market.
Apart from its effects on mail delivery, liberalisation has resulted in considerable changes in the mail processing value chain. Supported by new technological developments and increasing digitalisation, an increasing number of specialised market participants and numerous product and service options have arisen. This gives customers more choice, as well as providing them with specially tailored solutions.
Germany is at the forefront in Europe with regard to liberalisation. EU mail policy demands that all member states achieve full liberalisation in the final instance, but leaves structures and time-frames open to allow for different models (cut-off date for full liberalisation is 2011 and 2013).
Great Britain has also liberalised its mail market in stages from 2003 to full opening of the market in 2006. However, due to its regulatory framework competition does not include delivery to final destination (the “last mile”), but is directed more at “downstream access” for the higher end of the mail chain. As a result, competitors participating in the final delivery stage of the mail chain account for less than 1% of the market, but over 30% of mail is now consolidated by private competitors before handover to the Royal Mail for delivery.
In the Netherlands, liberalisation has also taken place in stages starting in 2003, with full opening of the market achieved in 2009. Here, competition with low-cost offers has become predominant. Competitors to TNT deliver pre-sorted mass mailings with precisely scheduled delivery on two days of the week. The share of the market held by private competitors currently stands at around 12%.
