Letter prices in Europe

Up-to-date international letter price survey 2021 20th edition 1 Summary

This is the twentieth time has As in previous studies, the nominal prices in the published a study comparing current letter different countries were compared for the prices in Europe. The study reviews prices for current year, i.e. 2021. The price of a domestic standard letters in all 27 member states of the standard letter has increased in 14 of the European Union, in the United Kingdom as well surveyed countries since the last study was as in the European Free Trade Area (EFTA) conducted. The average European nominal countries of Iceland, , and Switzerland. price is currently €1.16. The postage rate for letters sent within Europe increased in 16 countries, bringing the average cost for this type of letter to €1.73.

A purely nominal approach, however, does not allow for an objective assessment of the letter prices charged in the surveyed countries. Other macro-economic criteria need to be taken into account such as inflation, cost of labor and purchasing power as well as the amount of time required to earn the postage price of a letter.

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In Germany, the postage rate for a domestic standard letter has remained stable at €0.80 since 2019. The consolidated comparison of Inhalt postage rates presented here, which incorpo- Summary 2 rates differences in labor costs and purchasing 1 Comments on methodology 4 power, once again demonstrates that Deutsche 2 Review of nominal prices Post charges a very affordable price for a 3 Domestic letter mail 6 standard letter, one that is significantly below 3.1 Price developments since 2016 8 the average rates charged in all other countries 3.2 Letter mail within Europe 10 in this study. More affordable letter mail postage 3.3 Adjustment for inflation since 2011 12 rates can be found in only four, generally much 4 smaller countries, whereas more expensive 5 Work in minutes per letter price 14 prices for letter mail are paid by customers in 6 Adjustment for labor costs 16 25 nations. 7 Adjustment for purchasing power differences 18 8 Consolidated results 20

The highest consolidated postage rates can be found in Denmark and Finland. The country charging the lowest letter price is Malta. Published by Deutsche Post AG Headquarters Corporate Public Affairs Adjusted for inflation, postage rates for letters 53250 Bonn in Germany have gone up by just under 30% www.dpdhl.com since 2011. In that same time period in Europe, Editors Regine Stöldt, however, the average inflation-adjusted price Alexander Rometsch rose by nearly 80%. Design +C Kommunikationsdesign Caroline Gärtner Even when the number of working minutes Photography Deutsche Post DHL Group, Stefan Abtmeyer (letters), Bundesamt needed to cover the price of a domestic letter in für Energie BFE, ITU / R. Farrell, the countries surveyed is taken into considera- / Yseult YZ Digan / Elsa Catelin / Marion tion, German letter prices still remain extraordi- Le Bec, , Posti, Post NL, narily competitive. Only in Malta and Switzerland Post Nord, Posten Norge AS, Östrreichische Post AG / Christian Stem- are fewer working minutes needed to earn the per / Werner Streitfelder, postage rate of a standard letter. wiki commons April 2021 4 Letter prices in Europe

2 Comments on methodology

This study begins by comparing prices for domes-­ In countries where value-added tax (VAT) is tic standard letters and international letter mail levied on the letter services considered for this within Europe in the 27 member states of the comparison, the study uses the gross price, i.e., European Union, in the United Kingdom and in the letter price including VAT. Gross prices are the EFTA countries of Iceland, Norway, and significant because the most relevant factor in Switzerland. For domestic letters, it considers such a comparison are the actual prices con­ the fastest letter mail product in all countries sumers have to pay for a letter. This study under review, which according to current considers standard letters only, as this product product specifications generally carries a next- represents the lion’s share of all letters sent by day delivery target (D+1). The primary concern private customers and therefore best reflects here is comparability, i.e., services with quality actual consumer behavior on the letter market. criteria allowing for real comparison, in particular with regard to transit times. Nominal letter prices and the nominal price development in Europe over the last five years This method is also applied to countries such as will be presented first, followed by the develop- Denmark, Finland and Italy where a substitution- ment of letter prices from 2011 to 2020, related decline in demand has led them to raise adjusted for inflation. Next, the average number prices for letters with a transit time of D+1 of minutes industrial workers have to work in dramatically compared to products with lower the individual countries to earn the price of a transit times or, in some instances, to those with standard letter is examined. Finally, a comparison special services such as basic item tracking. will be made of letter prices in each country, LetterLetterBriefpreise prices prices in in Europea EuropeEuropa 5

adjusted for factors such as labor costs and consideration (i.e., postal, courier, and express differences in purchasing power. Here the services). In order to calculate the “work in relevant values for Germany and the other minutes per letter”, the study used data identi- countries are compared as required by the res-­ fied by the Cologne-based German Economic pective factors to be adjusted for. The calculated Institute (IW), namely the hourly wages of a ratios are multiplied by the nominal letter prices worker in the manufacturing industry. of the relevant countries, which results in the adjusted letter prices. In some cases, the exchange rate had an impact on letter prices shown here. For example, the This study takes into account all applicable post­ price of a domestic letter in Croatia fell after its age rates or bindingly announced price changes conversion into euros even though there was no in those countries as of April 1, 2021. The data de facto price decrease in that nation. on the individual countries was taken from both Eurostat and postal companies in the nations surveyed. To adjust the letter prices so that they reflect labor costs, statistical data was used that most closely corresponds to the sector under 6 Letter prices in Europe

3 Review of nominal prices

3.1 Domestic letter mail

The average price of a domestic standard letter annual increase that has been recorded in this in Europe is currently €1.16, which is four cents study. A considerable price increase of €0.25 higher than in the previous year’s study. Denmark was registered in Finland. The price hike in still leads the list of domestic nominal prices, with Estonia was even more substantial, rising 130% a postage rate that converts to €3.88. Germany from €0.65 to €1.50. ranks even further below the average than in 2020 thanks to Deutsche Post’s domestic Fluctuations in exchange rates sometimes standard letter price of €0.80 and, as a result, result in the nominal price, which is converted still shares last year’s position of 18th with into euros, deviating from the figure for the Luxembourg and Slovakia. previous year, even though the price in the re­­ spective national currency has remained stable. Since the 2020 study, the price of a domestic In Switzerland, for example, the converted price standard letter has increased in 14 countries. in euros for a standard letter is two cents higher Slight increases of just a few euro cents were despite no change in the nominal Swiss franc found in the Netherlands, Spain, Austria and price. The converted letter price in Croatia, in Portugal. A moderate price increase of €0.12 contrast, fell by three euro cents even though was made, for example, in France. The French the price in the local currency remained the price hike marked the eleventh consecutive same. Letter prices in Europe 7

Nominal price for a domestic standard letter

in Euro

Denmark 3.88 Finland 3.35 Italy 2.80 Greece 1.90 Belgium 1.60 Estonia 1.50 Norway 1.46 Iceland 1.35 France 1.28 1.08 Ireland 1.00 Latvia 1.00 Netherlands 0.96 Czech Republic 0.93 Switzerland 0.92 UK 0.91 Poland 0.89 Croatia 0.85 Austria 0.85 Luxembourg 0.80 Germany 0.80 Slovakia 0.80 Spain 0.70 Portugal 0.70 Romania 0.64 Bulgaria 0.56 Lithuania 0.55 Slovenia 0.55 Hungary 0.54 Cyprus 0.41 Malta 0.30 Average € 1.16

Following list-topper Denmark, Finland is in A domestic standard letter still second place with a nominal price of €3.35. costs less than €0.50 in only Italy has improved its position by one with two countries: Cyprus (€0.41) “Posta1”, the standard letter used in this com- and Malta (€0.30). Malta Post parison, which includes the option of simplified has occupied last place without shipment tracking and has a stable cost of interruption since 2008, €2.80. offering the lowest nominal domestic letter price Only a couple of significant changes can be recorded in this study. found in the remaining rankings for this year. The price increase in Estonia year-on-year led to a dramatic shift in the country’s ranking, moving it up from twentieth to sixth place. Poland’s stable letter price of 4.10 złoty caused it to drop from 13th place to 16th. Hungary is now ranked third from last, three spots lower than in 2020. 8 Letter prices in Europe

3.2 Price developments since 2016

In most European countries, the price for a Finland has led the ranking of price increases domestic standard letter has risen dramatically since 2016 with a 179% price increase, followed over the last five years. A look at the price trend by Denmark with 164% and Estonia with 131%. in terms of percentage shows this development In the Czech Republic and Belgium, the nominal quite clearly. On average, the nominal prices for letter price has doubled since 2016. The nominal the domestic letter in local currencies have price has remained unchanged over the past five increased in the last five years by nearly 53%. years in Italy, Croatia, Cyprus and Switzerland

This development is also reflected in the change At 14%, Germany’s nominal increase of the in the average nominal price, which was €0.80 standard letter price puts the country in second in 2016 and is currently €1.16 as mentioned to last place in this overview, well below the above. This corresponds to an increase of European average. Letter prices have risen approximately 45%. more sharply in 25 of the 31 surveyed European states over the last five years than they have in Germany. Letter prices in Europe 9

Price developments 2016 – 2021

in Prozent

Finland 179 Greece 164 Estonia 131 Belgium 103 Czech Republic 100 Romania 94 Latvia 75 Poland 74 Sweden 71 Norway 64 France 60 Spain 56 Slovenia 53 Denmark 53 Ireland 43 Iceland 41 Hungary 38 UK 35 Netherlands 32 Bulgaria 29 Portugal 27 Austria 25 Slovakia 23 Lithuania 22 Malta 15 Luxembourg 14 Germany 14 Italy 0 Croatia 0 Cyprus 0 Switzerland 0 Average 52.74 % 10 Letter prices in Europe

3.3 Letter mail within Europe

Since the most recent study last year, the price Estonia also stands out with this type of letter for sending a standard letter to another European thanks to a half-euro price increase to €1.90. state has risen in 16 of the countries under Considerable price rises were also seen in Bel- review. In 13 of these countries, postal service gium (+19%) and Finland (+15%). Countries like providers also raised domestic letter rates. In Austria, Portugal and France made modest Denmark and Poland, price hikes were limited to increases of ten cents (nearly ten percent) to intra-European letters and in Iceland to domestic the prices of intra-European letters. Increases in letters. In 15 countries, the postage rate for letters the Netherlands and Spain were even more sent within Europe saw no change. modest – only five cents each.

The average price for sending letters within Exchange rate fluctuations also had an impact on Europe is currently €1.73 or six cents more than letter mail within Europe. In the Czech Republic, in last year. In 14 countries the postage for for example, the intra-European letter price did Europe-wide mail dispatch is more expensive not change in the local currency, but its conver- than the average; in 16 countries it is below the sion into euros resulted in a price drop of €0.12. average; and in Poland the price matches the average. In nearly all countries, it costs more to send a let- ter within Europe than to send one domestically. The only exception is Finland, where a standard letter to another country in Europe costs €1.95 but its domestic dispatch (with proof of delivery) Stay safe & is €3.35. In fact, the average price for a Europe- connected

Accelerating digital transformation in challenging times Letter prices in Europe 11

Nominal price for letter mail within Europe

in Euro

Denmark 4.42 Italy 3.50 Portugal 2.90 Norway 2.19 Slovenia 2.19 Sweden 2.15 Greece 2.00 Finland 1.95 Hungary 1.94 Belgium 1.91 Estonia 1.90 Romania 1.85 Croatia 1.83 UK 1.83 Poland 1.73 Ireland 1.70 Netherlands 1.55 Iceland 1.51 Spain 1.50 France 1.50 Czech Republic 1.40 Switzerland 1.38 Latvia 1.35 Slovakia 1.20 Bulgaria 1.18 Germany 1.10 Luxembourg 1.05 Austria 1.00 Lithuania 0.81 Cyprus 0.64 Malta 0.59 Average € 1.73

wide letter is now 1.8 times higher than the price for a domestic standard letter. In Germany, where the price for a letter within Europe is €1.10, that same ratio is just under 1.4.

Denmark, Italy and Portugal still top the ranking list of nominal prices for intra-European letters. As a result of Estonia’s considerable price increase, the country made a considerable jump on this table as well, from 18th to tenth place. Belgium rose four spots to reach ninth place, Romania derably below average price for standard letters five to reach 17th. Croatia’s stable price of to other European countries. Only five other 14 kunas dropped it four places in the ranking countries have lower prices. The bottom group to 12th place. with the most economical prices within Europe include Latvia and Cyprus with values below one Germany has kept its very low position in the euro as well as last-place Malta, whose price is ranking (23rd) thanks to Deutsche Post’s consi- just €0.59. 12 Letter prices in Europe

4 Adjustment for inflation since 2011

By providing an account of the inflation-adjusted price trends over the last ten years in the 31 countries under review, it is possible to obtain a useful overview of the impact of the different rates.

In the period from 2011 to 2020, the average rate of inflation in all European countries surveyed was 1.32%. This ranged from -0.1% in Switzer- land and 0.57% in Greece to just under 2.57% in Romania. In Germany, the average rate of inflation over the past ten years was 1.22%, in Lithuania 1.69% and in Hungary 2.17%.

When inflation is taken into account, the price of a standard domestic letter in the countries surveyed has risen on average by 79.11% since 2011. Twelve countries had values above that average, 19 below it.

Any meaningful comparison of letter prices in Italy and Finland lead this particular ranking Europe must also take the various general price list. In both countries, the domestic letter price developments into consideration. A letter price adjusted for inflation rose by around 300%. that is nominally stable in a country, for Denmark follows with 228%, Greece with nearly instance, changes annually at the rate of infla- 196% and Estonia and the Czech Republic with tion when that price is viewed in real terms. over 100%. In France, the inflation-adjusted let- ter price nearly doubled. Switzerland is the only country where the inflation-adjusted price for letters has remained nearly stable. In Lithuania, it rose by less than five percent.

The inflation-adjusted postage rate in Germany has increased by 29.4% since 2011. This increase, though considerable at nearly 50%, is still below the average, putting Germany in the lower middle of the table (20th place). Letter prices in Europe 13

Inflation-adjusted change in letter prices 2011 – 2020

in Prozent

Italy 317.7 Finland 290.1 Denmark 228.0 Greece 195.8 Estonia 167.0 Czech Republic 125.3 France 91.9 Poland 83.2 Iceland 82.5 Belgium 82.5 Slovenia 81.6 Sweden 80.7 Ireland 76.0 Spain 74.9 Netherlands 68.2 Norway 58.8 Latvia 56.3 Romania 54.2 Portugal 33.6 malta 30.1 Germany 29.4 Hungary 23.6 Croatia 22.2 Bulgaria 18.6 Slovakia 17.0 UK 16.4 Austria 15.9 Luxembourg 14.3 Cyprus 11.7 Lithuania 4.9 Switzerland 0.2 Average 79.11 % 5 Work in minutes per letter price

According to the European Union’s Postal Services Directive, prices for universal service products must be “affordable” in the member states of the European Union. Affordability – and thus compliance – in these countries can only be assessed, however, by taking the different wage levels into account. A good indicator of afford­ ability is the amount of working time needed to earn the cash equivalent of the letter price in the individual country.

This calculation is based on the hourly wage of On average, a worker in Europe has to dedicate an industrial worker. Once again, information on 4.24 minutes of working time to earn the cash the hourly rates for workers in the manufactu- equivalent of a standard letter. This average time ring industry was provided by the German Eco- has dropped slightly compared with the prior nomic Institute and postal service providers, and year. In 2020, it took an average of 4.32 minutes has served as a consistent and reliable data base to earn the cost of a letter. for this part of the study. The country where workers have to work the longest to cover the cost of a domestic standard letter is Estonia, with nearly ten minutes. Last year’s leader in longest working time, Greece, Letter prices in Europe 15

Work in minutes per letter price

in Minuten

Estonia 9.76 Greece 9.32 Italy 8.19 Latvia 8.10 Bulgaria 7.85 Finland 6.77 Poland 6.73 Romania 6.14 Croatia 6.00 Czech Republic 5.74 Denmark 5.68 Slovakia 5.12 Portugal 4.56 Hungary 3.80 Lithuania 3.72 Belgium 3.00 France 2.90 Iceland 2.85 UK 2.44 Spain 2.42 Sweden 2.37 Norway 2.29 Cyprus 2.21 Ireland 2.19 Slovenia 2.10 Netherlands 1.90 Austria 1.75 Luxembourg 1.58 Germany 1.44 Malta 1.38 Switzerland 1.26 Average 4.24 minutes

has slipped into second with over nine minutes markedly below average time of 1.44 minutes per standard letter. Italy occupies third place per letter (2020: 1.48 minutes). The working with 8.19 minutes of work needed to cover the time criterion, in other words, also demonstrates cost of a domestic letter, which is slightly shorter the particular affordability of the Deutsche Post than last year’s time. letter price.

Once again, the least amount needed to cover these costs was the 1.26 minutes found in Swit- zerland. This is an improvement over last year’s result of 1.35 minutes. Germany continues to be third from bottom in this ranking thanks to a 16 Letter prices in Europe

6 Adjustment for labor costs

For the adjustment, ratios are calculated using the labor costs for Germany and the respective countries, which are then multiplied by the share of the letter price accounted for by staff costs. Statistics on the cost of labor in the postal, courier, and express services sector in the countries surveyed can also be used in this context.

The average European price calculated using this method is currently €1.57, making it one cent higher than in the previous year and €0.77 more than the price charged by Deutsche Post. This average value is exceeded in 12 countries, while in 19 others the letter price rate adjusted for labor costs is below the average.

Denmark, at €3.40, and Finland, with €3.36, occupy first and second place on this table. Estonia’s price increase has a considerable Mail delivery operations are particularly labor impact here as well: The Baltic country’s rate of intensive compared to other sectors. This in turn €3.19 puts it in third place following its ranking is reflected in the high percentage of staff costs of 13 in the prior year. The labor-adjusted letter to total costs. However, the cost of labor varies price in Romania has fallen considerably. greatly from country to country, so that the indi- In 2020, Poşta Română, the national postal vidual postal service providers have to shoulder company, charged €2.42 for its standard letter. differing levels of staff costs. Given the hetero- Since then, the price has dropped €0.59 cents to geneity of Europe’s wage and welfare state €1.83, putting the country in ninth place from its structures, these varying labor costs must be previous eighth. The rate for Lithuania has also taken into consideration to conduct a meaningful fallen, from €1.83 to €1.43. Lithuania now ranks comparison of letter prices in Europe. 15 following its tenth place position last year.

The first step is to recognize that staff labor only Belgium increased its price appreciably. The comprise a certain percentage of the overall letter mail rate adjusted for labor costs rose costs of mail transport. As a result, only this €0.38 to €1.55, landing Belgium in 13th place, percentage is factored into the cost adjustment, three ranks higher than in 2020. while the rest remains unaffected. At €0.80, Germany occupies a position quite low on the table (rank 25). A lower letter price is offered only in Austria, Switzerland and Malta, when labor costs are taken into consideration. Letter prices in Europe 17

Letter prices adjusted for labor costs

in Euro

Denmark 3.40 Finland 3.36 Estonia 3.19 Latvia 2.93 Italy 2.86 Greece 2.44 Bulgaria 2.24 Poland 2.18 Romania 1.83 Slovakia 1.75 Czech Republic 1.71 Croatia 1.60 Belgium 1.55 Iceland 1.52 Lithuania 1.43 France 1.20 Hungary 1.17 Norway 1.17 Sweden 1.06 Ireland 0.98 UK 0.98 Netherlands 0.96 Luxembourg 0.94 Spain 0.90 Portugal 0.86 Cyprus 0.82 Slovenia 0.82 Germany 0.80 Austria 0.76 Switzerland 0.72 Malta 0.56 Average € 1.57 18 Letter prices in Europe

7 Adjustment for purchasing power differences

Income levels and social prosperity vary in The table of letter prices adjusted for purchasing European countries. As a result purchasing power continues to be dominated by Denmark, power also varies. These variations in turn are which has a converted postage rate of €3.23. essential to answering the question of how In Italy, too, the price for a standard letter is still affordable letter prices actually are in over €3.00 when purchasing power differences each country. are considered. The price in Finland, at €2.95, is slightly lower. In this area as well Belgium By taking purchasing power into account, made a major leap in the rankings. The Belgian the macro-economic conditions in the price adjusted for purchasing power rose from countries under review are also taken into consideration. Parity in purchasing power also compensates for the differences in price levels in individual countries that emerge when currencies are converted.

To factor in this type of parity, letter prices are divided by the countries’ purchasing power relative to Germany. This means that letter prices in countries with a relatively high purchasing power compared to Germany are cheaper and vice versa. The adjustment is based on purchasing power parities published €1.16 in the past year to a €1.57, sending it by the EU statistical office, Eurostat. from 13th place to its current rank of seven. The comparative price levels are used as a The letter price adjusted for purchasing power basis and represent the actual price of the same also increased significantly in France. In 2020, representative basket of consumer goods and it was €1.14, but the current study shows that services in each country in a comparable the price has jumped by €0.16 to €1.30. As a currency unit. result France’s La Poste is up two places on this table over last year and is now ranked 12. The average price of a domestic standard let- ter in the 31 European countries surveyed, Germany, with a postage rate of €0.80, holds a adjusted for purchasing power differences, low position in this ranking. The price of Deutsche is €1.30, six cents more than in 2020. Post’s domestic standard letter is thus €0.50 In 11 countries the letter price is below below the European average when adjusted for this average; in 19 others it is above this purchasing power. Letter prices for postal cus- threshold. The letter price in France tomers continued to be particularly affordable corresponds exactly to the average. in the island nations of Cyprus and Malta, at €0.50 and €0.39 respectively. Letter prices adjusted for purchasing power differences

in Euro

Denmark 3.23 Italy 3.11 Finland 2.95 Greece 2.54 Estonia 2.04 Poland 1.60 Belgium 1.57 Latvia 1.49 Croatia 1.43 Czech Republic 1.42 Romania 1.33 France 1.30 Bulgaria 1.17 Slovakia 1.12 Norway 1.10 Iceland 0.98 Sweden 0.95 Portugal 0.92 Ireland 0.92 Hungary 0.91 Netherlands 0.91 Lithuania 0.91 UK 0.87 Spain 0.83 Austria 0.83 Germany 0.80 Slovenia 0.73 Luxembourg 0.70 Switzerland 0.66 Cyprus 0.50 Malta 0.39 Average € 1.30 20 Letter prices in Europe

8 Consolidated results

In the final step, the letter prices are adjusted for The average European letter price calculated in the macro-economic factors of both labor costs this way is now €1.43 or three cents higher than and purchasing power and then consolidated last year. Consolidated letter prices are above into an overall result to produce a performance this average value in 12 countries and below it in indicator that is particularly informative. 18 others. Slovakia’s price is exactly average.

The first two places are once again occupied by Denmark and Finland, with values over three euros. Italy, just below that mark at €2.99, now holds third. Estonia, Greece and Latvia follow on their heels with prices over two euros. In twelve countries the consolidated letter price costs less than one euro. Ireland leads this group with a price of €0.95 and a ranking of 18. The consolidated Irish letter mail price fell by €0.11 compared with last year. Letter prices in Europe 21

Consolidated overall results

in Euro

Denmark 3.32 Finland 3.15 Italy 2.99 Estonia 2.61 Greece 2.49 Latvia 2.21 Poland 1.89 Bulgaria 1.70 Romania 1.58 Czech Republic 1.56 Belgium 1.56 Croatia 1.51 Slovakia 1.43 Iceland 1.25 France 1.25 Lithuania 1.17 Norway 1.13 Hungary 1.04 Sweden 1.00 Ireland 0.95 Netherlands 0.93 UK 0.92 Portugal 0.89 Spain 0.86 Luxembourg 0.82 Germany 0.80 Austria 0.80 Slovenia 0.77 Switzerland 0.69 Cyprus 0.66 Malta 0.47 Average € 1.43

Germany, in 24th place together with Austria, The comparison of the consolidated letter mail continues to be ranked in the bottom fifth of the prices in Europe once again clearly demonstrate table. Cheaper consolidated letter prices than in that for years now Deutsche Post has offered a Germany were found in only four generally much top quality service in the form of its affordably smaller countries: Slovenia, Switzerland, Cyprus, priced domestic standard letter. and Malta. In 25 European countries, however, postage is less affordable than in Germany. Deutsche Post AG Headquarters Corporate Public Affairs 53250 Bonn www.dpdhl.com

April 2021