The reform of the outdated postal law is starting to make progress. The Federal Cabinet approved a proposal from the Federal Ministry of Economic Affairs on Wednesday, according to government sources. The rules, which date back to the 1990s, are to be adapted to the changing demand in the internet age. The Federal Parliament and the Federal Council are now up and in the spring of next year, the final reform could be adopted. The federal government plans to give Deutsche Post less time pressure in the transportation of letters in the future.
This allows her to reduce costs and discontinue the still usual night flight for mail transportation. For consumers, this means that they will likely have to wait longer for their letters. Currently, the postal service still has to deliver at least 80 percent of the letters thrown in during the day on the next working day. However, in the future, there will only be a minimum value of 95 percent for the third working day after throwing them in. Letters will therefore be in transit for longer, but they are supposed to arrive reliably.
The government also plans to tighten the rules for the use of subcontractors. In addition, packages weighing 10 kilograms or more should be labeled to prevent package carriers from getting injured. Packages over 20 kilograms must either be transported by two people or with a mechanical aid. This regulation is also aimed at preventing back problems.
The DHL stock temporarily lost 1.38 percent during XETRA trading and is now at 45.13 Euro.
The reform of the Postal Act is an important step towards modernizing the postal system in Germany. The old rules are no longer up to date and need to be adjusted to the advancing digitalization. Thanks to the reform, the German Post will have more leeway in delivering letters and can thus reduce its costs. However, for consumers, this means longer waiting times for their letters.
The topic of health is also considered in the reform by tightening the rules for the use of subcontractors and the transportation of heavy packages.
Now it is up to the German Bundestag and Bundesrat to implement the reform and pave the way for a modern and efficient postal delivery in Germany. The reform could be finally decided in the spring of next year and then Deutsche Post will have to adhere to the new rules. Investors have already reacted, as seen in the temporary decline of DHL shares. Nevertheless, the reform will contribute in the long term to strengthening the competitiveness of Deutsche Post and adapting the postal service to today's needs.
