SHARE
COPY LINK

POSTAL SERVICE

Will changes to PostNord mean more expensive post in Denmark?

A new deal announced by politicians this week will result in postal services in Denmark costing more, company PostNord has said in response to the announcement.

Will changes to PostNord mean more expensive post in Denmark?
PostNord says it will become more expensive to send letters in Denmark as a result of a new post law, but a rival company says increased competition will benefit post services. File photo: Mads Claus Rasmussen/Ritzau Scanpix

The new postal law, agreed between the government and four opposition parties, means that PostNord faces losing millions of kroner in state support, and will no longer be obliged to fully offer postal coverage to every address in Denmark.

READ ALSO: PostNord loses state support and obligation to deliver to all of Denmark

“The coverage guarantee [Danish: befordringspligt, ed.] which we at PostNord have provided for the state has ensured a guarantee of uniform service and prices for post distribution for all Danes whether you love in Copenhagen, Thyborøn or Rudkøbing,” PostNord’s CEO Peter Kjær Jensen told news wire Ritzau in a written comment.

“With the new deal, payment for identical services and prices in Denmark lapses, and with it disappears the guarantee and security Danes have had up to now.

“That will probably make the postal service in Denmark more expensive – both for the public and for the state,” he said.

The obligation to distribute post to the entirety of Denmark has given PostNord repeated annual losses in recent years, with the state supporting the company to the tune of hundreds of millions of kroner. Both the obligation and the state support are ended by the political agreement, which will take effect in January 2024.

PostNord is not a monopoly in Denmark, but has around a 90 percent market share when it comes to letters, delivering around 180 million a year according to Jensen.

Due to its coverage obligation, PostNord has also been VAT (moms) exempt, meaning it could charge lower prices for letter delivery than competitors like DAO, GLS and Bring.

DAO, which currently delivers around 10-11 million letters annually in addition to its parcel and newspaper services, argues that the new post law will not necessarily mean higher prices.

“We hope it can give a better market share to us and that the competition situation will make for competition at lower prices,” the CEO of DAO, Hans Peter Nissen, said in a comment.

“We have had to add VAT and that means we’ve been 25 percent [the rate of Denmark’s VAT or moms, ed.] more expensive on letters. And that’s been the most significant anchor we’ve had the entire time in relation to sending letters,” Nissen said.

GLS and Bring, which currently only offer parcel delivery, both told Ritzau they have no plans to enter letter distribution. Both companies said the move would not be profitable and they do not have the necessary setup.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

POSTAL SERVICE

UPDATE: Danish PostNord service resumes work after strike

Staff at the Taastrup terminal of Danish postal service PostNord have resumed work after a strike which the company said could affect deliveries.

UPDATE: Danish PostNord service resumes work after strike

Staff at PostNord’s Taastrup terminal resumed work on Thursday afternoon, after striking from Wednesday evening.

The company confirmed the strike in a statement earlier on Thursday, saying it could result in delayed deliveries in the coming days. Following the resumption of work by sorting staff, PostNord said that, as of Friday, it was working to remove the backlog. Letter deliveries could be delayed by a single day, the company said.

“I can confirm that a strike began yesterday, in breach of the collective bargaining agreement, at our post terminal at Taastrup,” PostNord director of communications Andreas Brethvad said in Thursday’s statement.

READ ALSO: EXPLAINED: What is a Danish collective bargaining agreement?

“The strike in question is among staff who handle letters,” he said.

The company was unable to comment on the reason for staff taking the action, saying that was a matter for their trade union, 3F.

Any delays to deliveries may be relevant news for British residents in Denmark who plan to vote by post in the upcoming UK General Election.

READ ALSO: The key deadlines Brits in Europe need to know to vote in the UK election

When voting by post, you will be sent a ballot paper which will need to reach the polls by polling day, July 4th, or ask for a proxy vote, where a UK-based voter you trust can vote on your behalf.

You can also travel back to the UK on election day and vote in person in the constituemncy where you’re registered, but unless you just happened to be planning a visit home at that time anyway, it’s probably more convenient to apply for one of the two above options.

If you apply for a proxy vote online you’ve got a bit more time, but you’ll need to submit your application for this by 5pm on June 26th.

SHOW COMMENTS