German Post must reposition itself in the digital age as more and more people switch to electronic communication. For this reason, the Federal Ministry of Economics presented a reform proposal for the Postal Act on Friday, which allows the conglomerate more flexibility in the delivery of letters. Until now, the post had to deliver 80% of letters by the next working day, but this requirement is now to be lifted. Instead, it is expected that 95% of letters will reach their recipients by the third working day at the latest, and 99% by the fourth working day. In doing so, the ministry is accommodating the postal service, which can thus reduce costs and save its fleet of night flyers used for transporting letters across Germany and emitting CO2.

This reform is urgently needed as the volume of mail has been declining for years, while the costs of delivery remain the same. The reason for this is that Deutsche Post is obligated as a universal service provider to deliver mail to all locations in Germany and to provide the corresponding infrastructure such as vehicles, mailboxes, and branches. Other companies do not have this obligation and can therefore offer cheaper prices.

The last comprehensive reform of the Postal Law took place in 1999, at a time when the internet did not yet play a significant role in communication. Nowadays, most birthday greetings and invitations have shifted to digital means. For this reason, the mandatory presence requirement, which so far dictates that there must be at least 12,000 postal branches, is to be somewhat relaxed. However, machines for buying stamps and dropping off packages still need to be approved by the Federal Network Agency.

This agency should also have the power in the future to impose fines and compulsory penalties against Deutsche Post in order to address potential quality deficiencies in delivery. Last year, more citizens complained than ever before about late or incorrectly delivered parcels. Consumer protection laws are also to be strengthened to better represent consumer interests.

The German Post has been reserved in its comments on the ministry's reform plans while emphasizing that the volume of mail continues to decline and that people's communication habits have changed. However, suggestions such as capping postage for standard letters at 1€ and labeling heavy packages to prevent back problems for couriers are welcomed.

The draft proposal from the Federal Ministry for Economic Affairs is expected to pass through the Federal Cabinet before Christmas and be completed by spring. The stock of DHL Group has already responded positively to the reform proposals, trading successfully on the XETRA market. The stock also gained an additional 1.57 percent in after-hours trading on Tradegate. However, an economically viable solution for the universal service of Deutsche Post remains to be seen.