Deutsche Post completes €400m investment in letter processin

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Deutsche Post completes €400m investment in letter processing

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Deutsche Post said today it has completed a EUR 400m upgrade programme for its letter processing network in Germany.

The company said its Stuttgart mail centre has become the last of 82 sites to begin operating its new Großbrief mail sorting system.

A total of 288 new sorting machines for standard and compact letters, along with 87 machines for Großbrief and Maxibrief pieces have now been installed since 2009.

Deutsche Post said the “substantially higher” automation level for its processing level means fewer sorting steps are needed, mail processing is faster and more accurate, and it even reduces carbon emissions.

The new systems use 22% less energy than older technology, with the Post forecasting a 5,000-ton annual cut in its climate change emissions.

Jürgen Gerdes, the corporate board member for Mail at Deutsche Post DHL, said: “The automated processing of 65m mail items per day is more efficient, our customers benefit from faster and more precise delivery, and we are easier on the environment thanks to fewer carbon dioxide emissions and the use of less electricity.”

Europe’s biggest postal company has around a 63.7% market share of the EUR 4.3bn German mail communication market, which declined in size by about EUR 300m from 2010 to 2011.

A continuing slow decline in letter volumes is expected, with e-substitution but also from increased competition within the market, particularly since the company was required to apply VAT to business customer revenues from July 2010. Deutsche Post’s market share was from about 64.4% in 2010.

The company sees service quality as its chief priority for competing, and while its automation level has now risen beyond 90%, service quality as measured by the Quotas agency sees 95% of letters delivered next day.
Parcels

Deutsche Post is also currently in the process of expanding its parcel network to handle a growth market.

The company said by 2014 it will have invested EUR 750m in its nationwide network of 33 parcel centres, “substantially” expanding processing capacity with new machines offering higher sorting speeds.

Parcel centres typically processing around 20,000 parcels an hour will in future be able to handle 28,000 to 50,000 parcels an hour, depending on location.

Deutsche Post said today that so far, its upgrades have already raised capabilities of the network by around 20%.

“With investments of more than a billion euros in the mail and parcel infrastructure, Deutsche Post DHL has made a clear declaration in favour of the home market,” said Gerdes.

Source: Post&Parcel/Deutsche Post DHL