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Overnight airmail service for domestic letters scrapped by Deutsche Post

As letter mail volumes continue to fall globally, Deutsche Post has discontinued its overnight airmail network for domestic letters in Germany, marking the end of 63 years of operations.

The final flight took place on March 28 transporting letters to and from northern and southern Germany on the routes Stuttgart-Berlin, Hanover-Munich and Hanover-Stuttgart. These letter mail volumes will now be transported via road networks, enabling Deutsche Post to reduce transport-related CO2 emissions on these routes by more than 80%.

Marc Hitschfeld, chief operations officer of DHL Group’s Post & Parcel Germany division, commented, “We conclude the era of overnight letter airmail with mixed feelings. In times of climate change, airmail for domestic letters within Germany can no longer be justified – also because there is no longer the same urgency associated with letter mail as in decades past. So, on the one hand, the end of domestic airmail is good news for the environment. On the other hand, the end of overnight airmail closes a chapter of postal history which many Deutsche Post employees have identified with for decades.”

History of airmail

The transport of letters and postcards by air began on September 1, 1961 after Germany’s Federal Minister of Post and Telecommunications, Richard Stücklen, and the chairman of Deutsche Lufthansa signed a contract for the transport of airmail without a surcharge.

At the time, letters and telegrams were the only medium for quickly transmitting written communication – a function long since assumed by digital media such as email and WhatsApp.

The first partner in the overnight airmail network was Lufthansa, which serviced all routes at the time apart from the air corridor to Berlin controlled by the Western Allies, which was serviced by the American carrier PanAm until 1990.

Over the years, additional airlines were added to service the network, with Lufthansa terminating its service in 2008. Frankfurt am Main airport served as the network hub for decades but lost this role in 2005 due to the ban on night flights.

As late as 1996, Deutsche Post was still transporting some 430 metric tons of letter mail with 26 partner airline aircraft to 45 destinations every night. In the end, it was only 53 metric tons, with six aircraft servicing the routes Stuttgart-Berlin, Hanover-Munich and Hanover-Stuttgart in both directions. This amounted to some 1.5 million letters flown each night or roughly 270,000 items per aircraft on average.

Modern approach

Political and social consensus in Germany today has largely determined that ensuring speedy delivery of most domestic letter mail by the following workday is no longer a core component of universal postal service. Instead, focus is much more on the social-environmental aspects and impacts of the postal service.

Accordingly, the reforms to Germany’s Postal Act (PostModG) – currently in deliberation in Germany’s parliament and expected to take effect soon – stipulate longer transit times for letter mail, which has long been the norm in most EU countries. Nevertheless, Deutsche Post will continue to ensure fast letter mail transportation between northern and southern Germany with the deployment of Sprinter vans, among other modes. This is also made possible by reduced letter mail volumes and sorting times

Australia Post ends non-urgent daily letter deliveries

Australia Post has welcomed changes to the regulations governing the organization that mean the delivery of non-urgent letters will now take place every second business day, rather than every business day. The change will be implemented progressively across Australia through to the end of 2025.

New Delivery Model

The Prescribed Performance Standards came into effect on Monday, April 15, 2024. These changes follow the Federal government’s announcement in December 2023 regarding the first phase of reform to modernize Australia Post. The national post has conducted a nation-wide trial of its New Delivery Model, which will be rolled out gradually until the end of 2025. The New Delivery Model sees posties deliver priority mail, express letters and parcels every day, while standard letters and unaddressed mail will be delivered every second day – meaning posties can deliver more parcels, more often.

E-commerce growth in Australia

Australia Post’s Letters business has been in unstoppable decline for more than a decade, the company reports, a trend that has been playing out globally. However, e-commerce continues to grow year-on-year, with 9.5 million Australian households shopping online in 2023. The changes to the regulations establish a platform for Australia Post to build a more financially sustainable business, while still providing stable employment for thousands of team members and delivering for customers.

Paul Graham, CEO and managing director of Australia Post, said, “This is a very significant day in the modernization of Australia Post and we welcome the new regulations for letter delivery. The new regulations will enable Australia Post to focus on what Australians want most – flexible and more reliable parcel deliveries with enhanced tracking technology and more delivery options.

“Households now receive about two letters per week, and we expect this to halve in the next five years. By contrast, Australians spend about A$64bn [US$41bn] a year shopping online and want reliable parcel deliveries. Australia Post is the vital e-commerce link between those digital stores and the front door of millions of homes.

“Urgent mail, including express post, will still be delivered every business day as it always has, and our commitment to the service and support we provide across Australia continues. The regulations governing Australia Post had previously required us to focus on everyday letter delivery, even when there were no letters to deliver. This has been contributing to significant financial losses for Australia Post. With the strong support of the federal government, this is an important first step for Australia Post to address those financial losses by focusing its services on the growing parcel-delivery business and a better experience for our customers.”

For more of the top insights into the inner workings of Australia Post, read Parcel and Postal Technology International‘s exclusive interview with Paul Graham, group CEO and managing director, here.

Only a strong Swiss Post can offer our customers added value and provide the best possible services

Swiss Post has announced its financial figures for 2023 with operating profit (EBIT) of 323 million francs, 35 million francs down on the previous year’s figure.

Swiss Post CEO Roberto Cirillo explains: “We can look back on a challenging year. We have nevertheless achieved a great deal and continued strengthening our foundations for the future. We reached major strategic milestones in all units. Swiss Post is changing so that it can optimally meet its customers’ requirements for physical and digital services, both now and in the future. We want to continue providing the highest level of quality worldwide for our universal service products – in other words, our services for letters, parcels and payment transactions.”

The measures from the “Swiss Post of tomorrow” strategy are also having an impact on the financial result: pricing and efficiency measures, targeted acquisitions and network openings are counteracting the fall in letter and parcel volumes and decline in over-the-counter payments, but cannot yet fully offset them. At 323 million francs, operating profit (EBIT) is 35 million francs down on the previous year’s figure. CFO Alex Glanzmann says: “The financial result is in line with our expectations. It reflects the decline in volumes in our core business as well as the impact of inflation. This means it’s vitally important that we continue to expand where new requirements emerge, and adapt or optimize our services where demand is falling. That’s how we’ll remain relevant.”

Investing for the future in the Logistics Services unit

Swiss Post made investments, including in the Logistics Services unit. Despite a fall in parcel volumes (–4.6% compared with 2022), Swiss Post anticipates significant growth long-term. After all, Swiss Post customers send around 70 percent more parcels today than 10 years ago. To ensure it is prepared for this development, Swiss Post opened new parcel sorting facilities in 2023 – with two regional parcel centers in Wallisellen (ZH) and Pratteln (BL) and the installation of a parcel sorting machine at the Härkingen (SO) letter center. By continually developing its core business and investing in goods and construction logistics, Swiss Post is not just ensuring secure logistics for letters and parcels. It also reliably transports printed matter, newspapers and goods, and connects countries abroad with Switzerland. Besides parcel volumes, letter volumes declined year-on-year (–5.6% compared with 2022). The advertising market, which is heavily dependent on the economic climate, also suffered from negative consumer confidence. The volume of addressed promotional mailings declined by –5.3 percent last year, while unaddressed advertising fell by –6.4 percent. The efficiency measures introduced in administration in early 2023 and the continual optimization of processes in its operations enabled Logistics Services to post a very strong result in the fourth quarter. This significantly slowed the decline in the Logistics Services unit’s result compared with 2022.

Strategic partnerships in the branch network make a positive contribution to the result

PostalNetwork made a positive contribution to the result for the first time through strategic partnerships with banks, insurance companies and health insurance providers. However, the decline in volumes also had a significant effect in this unit. There was a substantial fall of over 18 percent in over-the-counter payment transactions. This means payment transactions have slumped by almost 50 percent over the past five years. Despite consistent efficiency measures, the PostalNetwork unit was unable to offset the losses.

The Communication Services unit achieves major milestones

As customer requirements are changing with digitization, Swiss Post is developing solutions for private customers, SMEs and public authorities in the digital world. A growing number of people are using digital solutions at home, at work and while on the move. Everyone should be able to decide for themselves whether and when they wish to use Swiss Post’s services physically or digitally. Major milestones were reached in 2023 with the long-term set-up of digital solutions: Swiss Post’s e-voting solution meant votes could be cast with Swiss Post’s new e-voting system for the first time at federal elections in three cantons (BS, SG, TG). By launching a digital registration process, Swiss Post has provided the Swiss population with easy access to the electronic patient record. The ePost communication platform has also made further progress: since last year, cantons, such as Bern, St. Gallen and Lucerne, have been using Swiss Post’s platform to send their information directly to residents’ digital mailboxes. The Communication Services unit is still under development. Operating income was primarily increased through strategic acquisitions in the e-government, secure customer communication and cybersecurity sectors.

Slightly lower result for Mobility Services despite higher transport income

At Mobility Services (PostBus and Post Company Cars), the result for 2023 is 6 million francs lower year-on-year. Greater transport income due to an increase in passenger numbers at PostBus could not offset rising costs – in particular higher personnel and fuel costs. Demand at PostBus has risen and is above its pre-pandemic level (+4.2 percent compared with 2019). Innovation and sustainability play a vital role in the development of Mobility Services’ solutions. For several years, Swiss Post has been increasingly deploying vehicles with alternative drive systems in its delivery fleet and at PostBus. Since 2023, only electric vehicles have been used for delivery in the cities of Zurich, Bern and Geneva, and 11 climate-friendly electric Postbuses are now on the roads in Graubünden. This shows that the technology is even suited to mountain regions − and that the quiet, comfortable vehicles have been a hit with passengers and drivers.

Turnaround in interest rates ensures better result at PostFinance

PostFinance posted a strong result despite a turbulent year on the national and global financial markets. The interest differential business is a key source of revenue for PostFinance. With the turnaround to positive policy rates, relevant factors have changed. It is clear, then, that PostFinance is making strong progress – from a solid position – towards a gradual normalization of the overall interest margin and a growth path. PostFinance customers are benefiting from the new situation as PostFinance is passing interest onto them through various products. Nevertheless, the economic and regulatory environment remains challenging for PostFinance. Despite the positive interest rate environment, it still faces the competitive disadvantage of not being able to issue loans and mortgages independently. The trend towards digitization of payment transactions is leading to a significant decline in transactions at Swiss Post branches and is increasingly weighing on PostFinance’s result in the universal service. Physical inpayments over the counter account for just 1.5 percent of the total volume. Cash withdrawals have also continued to decline. PostFinance anticipates a permanent change in customer habits regarding over-the-counter payment transactions and the use of cash.

Roberto Cirillo: “Only a relevant Swiss Post can create added value for Switzerland”

To tackle the challenges in its core business, Swiss Post is fully focused on establishing the physical and digital core business of the future. “It’s vital that we keep evolving and pursuing our chosen path consistently. Only a strong Swiss Post can offer our customers added value and provide the best possible services. And that’s exactly what we want. A relevant public service financed from our own resources and without burdening taxpayers,” says Cirillo. The forward-looking measures that have already been implemented are helping to improve services for customers, while also making them more efficient. “Swiss Post requires the right framework to adapt its services to continually changing needs,” underlines CEO Roberto Cirillo.

Posti has announced it plans to extend the alternate-day delivery of day mail to Forssa, Jokioinen, Humppila and Tammela.

The change is being planned for the following postal code areas: 30100, 30300, 30420, 31110, 31130, 31170, 31230, 31250, 31300, 31310, 31340, 31350, 31370, 31380, 31600, 31610, 31620, 31630, 31640 and 31650. If everything goes according to plan, the changes will take effect in April 2023.

In alternate-day delivery, delivery days for day mail alternate between postal code areas, which means that mail may be delivered on different days in neighbouring districts. Printed mail is delivered on weekdays in alternating two-week periods:

– on Monday, Wednesday and Friday one week

– on Tuesday and Thursday the following week.

In the first week of alternate-day delivery, the delivery days in the postal code area can be either Monday, Wednesday and Friday or Tuesday and Thursday. The following week, the days are swapped.

In alternate-day delivery, universal service items (stamped items) are delivered in accordance with the Postal Act. Alternate-day delivery does not apply to the delivery of parcels, with the exception of small parcels that fit in the mailbox or slot, which are delivered with day mail. Magazines, newspapers and advertisements are delivered according to a schedule agreed with the senders.

Morning newspapers will be delivered early in the morning on each day of the week, just as before.

We’ll be informing mail recipients in more detail about the changes to delivery with a public notification closer to their planned date.

In Finland, regional alternate-day delivery is already in use in many regions. Similar delivery models are also used across the Nordic Region. The reason for this is the dramatic decrease in the volume of printed mail.

By renewing delivery, Posti can continue to offer traditional delivery services alongside digital services.

Route optimization also makes it possible to reduce the mileage, fuel costs and CO2 emissions. Posti is committed to achieving zero emissions by 2030.

The planned changes will first be negotiated with personnel, and the possible needs for changes regarding personnel will also be specified as the negotiations proceed. The alternate-day model provides better opportunities for full-time work.

Posti’s Change Unit will provide personnel with personal support for career planning and strives to seek suitable solutions within Posti, together with the business and employees

Royal Mail presents proposal for the future Universal Service and calls for urgent action

Key points

Proposal developed after listening to thousands of customers to ensure it meets their changing needs and delivers a more efficient, more reliable and more financially sustainable service
Protects what matters most to customers with limited change – a one-price-goes-anywhere Universal Service, choice of First and Second Class services, with First Class letters still delivered six days a week
Royal Mail voices serious concerns that urgency of situation not recognised and calls for Ofcom to act swiftly to introduce reforms by April 2025 at the latest given no need for legislative change

International Distributions Services plc announces that Royal Mail has today submitted its response to Ofcom’s call for input into the Universal Service.

In their call for input Ofcom concluded that reform of the Universal Service is necessary, given letter volumes have declined from a peak of 20 billion a year in 2004/5 to seven billion in 2022/3. Volumes will likely drop to around four billion in the next five years.

Following extensive consultation, listening to a wide range of consumers, businesses and stakeholders, Royal Mail’s proposal is designed to protect what matters most to customers, with no changes to:

The one-price-goes-anywhere service to all parts of the United Kingdom
First Class letters delivered daily, six days a week (Monday to Saturday) to recognise the importance of next day and Saturday deliveries, especially for the NHS, publishers and senders of greeting cards
The option of First Class and Second Class letters, giving people the choice of price and speed
Parcels delivered up to seven days a week as currently.

The proposal includes vital changes to deliver a more efficient and more financially sustainable Universal Service:

All non-First Class letter deliveries, including Second Class, would be delivered every other weekday
The delivery speed of standard bulk business mail (used by large mail shippers for bulk mailings such as bills and statements) would be aligned to Second Class, so they arrive within three weekdays instead of two currently.

Listening to what customers have told us is important, Royal Mail is also calling on Ofcom to modernise the Universal Service for the digital age by introducing the following new features:

The introduction of new, additional reliability targets for First Class and Second Class services, alongside revised, realistic speed targets, to give customers further confidence
Tracking added to Universal Service parcels to reflect customer demand.

The proposal for reform can be achieved with regulatory change without the need for legislation. Royal Mail is urgently calling for Ofcom to act faster on implementing change, with the introduction of new regulations by April 2025 at the latest.

Martin Seidenberg, Group CEO of International Distributions Services plc, said: “The fact that letter volumes have dropped from 20 billion to seven billion a year means that the Universal Service is now unsustainable.

“If we want to save the Universal Service, we have to change the Universal Service. Reform gives us a fighting chance and will help us on the path to sustainability.

“Our proposal is based on listening to thousands of people across the United Kingdom to ensure it meets their needs. We have worked hard to come up with a proposal that is good for our customers, good for our people and would allow Royal Mail to invest in products and services that the UK wants.

“We have serious concerns that the urgency of the situation is not properly recognised by Ofcom. With no need for legislation there is no need to wait.”

The need for change

The Universal Service hasn’t changed for over 20 years, despite major changes to how people communicate. Royal Mail has been calling for reform for more than four years. Ofcom calculates that providing the current Universal Service to the UK has a net cost to Royal Mail of £325 million to £675 million every year – put another way, it costs the company £1 million to £2 million every day to provide the Universal Service to the UK.

This is in the context of Royal Mail posting losses of £419 million in 2022-23 and £319 million for the first six months of 2023-24. The combination of declining letter volumes and increasing costs means that the Universal Service faces a very real and urgent financial sustainability challenge.

A more sustainable future – with limited change for customers

Royal Mail’s proposal, if fully and swiftly implemented, would reduce the net cost of the Universal Service by up to £300 million per year. This is very dependent on how quickly reform is enacted and the rate of letter decline. These savings would allow Royal Mail to continue to invest in the modernisation and transformation of the business to provide products and services that customers want and reduce its environmental impact.

The proposal is designed to create a more financially stable future for the business and its shareholders, protecting tens of thousands of jobs and the best terms and conditions in the industry. It closely aligns to changes successfully made in comparable countries – in Europe and around the world – over recent years, with limited changes for customers.

As a result of the changes creating a more efficient network, posties would, for example, deliver to around seven out of ten addresses on every walk, compared to just four out of ten today. This would mean a net reduction in daily delivery routes of 7,000-9,000 over the course of around 18-24 months. The company expects there to be no compulsory redundancies and fewer than 1,000 voluntary redundancies. The reduction would be managed through natural turnover wherever possible.

Postal Service explores reduced mail pickups in rural areas

Daily Sentinel: The U.S. Postal Service is exploring a cost-saving measure that would involve picking up outgoing mail from some rural post offices once rather than twice a day, which a local postal workers union representative says would mean further delivery delays beyond those that could result from the proposed shift of area mail processing from Grand Junction to Denver.

The measure, part of the Postal Service’s “Delivering for America” strategic planning initiative, could put an end to afternoon trucks being sent to some rural post offices to pick up outgoing mail gathered locally over the course of the day by carriers and at collection boxes and post office windows. Instead, outgoing mail would be picked up only in the morning, when a truck also is bringing mail to a rural community for delivery.

“This means that mail accepted at a postal window in Ridgway, for example, will now sit at the post office overnight before being trucked to Grand Junction for processing the next morning. While the purported aim of saving money on trucking costs is understandable, the reality is that this measure will inevitably result in mail delays of at least one day,” said Shane McDonnell, vice president of the American Postal Workers Union Local #600 and a clerk at the Grand Junction Carrier Annex on Scarlet Drive.

“I urge the House to pass this bill that would protect the nation’s letter carriers who dutifully deliver medications, checks, ballots, packages, and other essential mail that all
Americans depend on,” President Renfroe said.

Protect Our Letter Carriers Act introduced in House

On March 13, the Protect Our Letter Carriers Act (POLCA) (H.R. 7629) was introduced in the House by Reps. Brian Fitzpatrick (R-PA) and Greg Landsman (D-OH). The bill was announced at a press event outside the Capitol in Washington, DC, where President Brian L. Renfroe, Rep. Brian Fitzpatrick, Rep. Greg Landsman, Leader Hakeem Jeffries (D-NY), Leader Steny Hoyer (D-MD), and Rep. Donald Norcross (D-NJ) spoke in support of the legislation.

AFL-CIO Secretary-Treasurer Fred Redmond, TTD President Greg Regan, and two letter carrier attack victims also spoke at the event.

This bipartisan legislation would provide $7 billion in funding for the Postal Service to secure its infrastructure, including the installation of high-security collection boxes and the replacement of items carried by letter carriers with more secure electronic versions. The funding would be appropriated over five years, $1.4 billion annually in fiscal years 2025-2029. When key infrastructure is devalued and more secure, letter carriers will be safer on their routes.

Additionally, the legislation would increase prosecution rates for these crimes by requiring the Attorney General to appoint an assistant U.S. attorney in each judicial district to prioritize any case involving an assault or crime against a letter carrier. Their principal responsibility in the district would be to coordinate and supervise the investigation and prosecution of these crimes.

The bill would also strengthen sentencing guidelines for these crimes, ensuring that they are treated in the same manner as assaults on federal law enforcement officers.

Since 2020, there have been more than 2,000 crimes committed against letter carriers on the job. Many of these attacks involve a gun or another weapon. Letter carrier robberies climbed to 643 last year, an increase of nearly 30 percent, and the number of robberies resulting in injuries doubled, according to the United States Postal Inspection Service (USPIS).

“The rise in robberies and violent assaults being committed against letter carriers in recent years is deeply concerning and Congress must act to ensure their safety,” Rep. Fitzpatrick said. “I am proud to be leading this bipartisan effort, which provides necessary resources to protect our dedicated letter carriers while making sure we are punishing criminals to the fullest extent of the law. The men and women of the postal service are often the backbone of a community, and they work hard around the clock, rain or shine, to deliver essential goods, and I will always have their back.”

“Our letter carriers are such a big part of our lives, and we have to keep them safe. This bipartisan effort will do just that,” Rep. Landsman said.

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