Post Denmark - Steep Rise in Postal Costs

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After an agreement was reached between the government and opposition parties, not only are Danish postal rates set to rise dramatically but the level of service consumers can expect from Post Danmark will be reduced.

Post Danmark, who have experienced a massive drop in the amount of mail being sent, will bump up the price of standard letters from 5.50 kroner to 8 kroner. At the same time, about a million Danish house owners will be forced to move their mailboxes from their main doors to the nearest pavement or property boundary line in order to shorten postal routes.

It is predicted that the price hike which will also affect second class mail – known as B-economique – and packages will boost Post Danmark’s budget by over 100 million kroner, while the company can save a similar amount by cutting back on its service commitments. One proposal to cut costs involves the laying off of hundreds of postmen and women.

Martin Salaman of the Danish Consumer Council criticized the decision and stated that the rise will hit consumers hard: ‘Politicians shouldn’t get into a panic because of last year’s financial crisis and then send the bill to consumers by significantly raising postal rates and reducing the level of service. Instead, they’ve got to remember that the economy will eventually turn around,’ he said.

The Director of the Danish Chamber of Commerce, Katja Østergaard is also critical of the decision. ‘A postal rate rise is not exactly what the business world needs rights now,’ she said. ‘But this is of course the logical result of a falling volume of mail – and Post Danmark has no competitors so customers have no alternative.’

According to a parliamentary committee, the postal service which has normally reported healthy profits will be faced with a deficit of 1.4 billion kroner by 2014 unless action is taken. The statistics regarding mail volume explain this dramatic fall in profitability. While 272 letters were sent per person in 1999, only 181 were sent ten years later. By 2019 this figure will have fallen to about 70 letters per citizen.