What would the director of the Institute for Competition Economics at Heinrich Heine University (HHU) do if he unexpectedly received one million euros? “Found a pub on the HHU campus,” is the answer from Justus Haucap, the same director at the Düsseldorf University. At least that’s what he says in a short interview that hangs on a pin board in the entrance hall of the university.
One can easily imagine the 53-year-old economist in a bar having intensive debates with his students. On the way to his office for the agreed interview with WELT, Haucap stops several times, speaks loudly and amusedly with students. In the subsequent conversation, his affable and direct manner is immediately noticeable.
In the interview, Haucap talks about Deutsche Post, the disputed wage dispute, the wrangling over a postal law and the low level of competition in the mail market. The former head of the federal government’s monopolies commission has a clear position on this.
WORLD: In the current collective bargaining dispute, Swiss Post is threatening to cut jobs and end nationwide letter delivery via its own employees. The dispute is about high wage demands from the Ver.di union. Do you feel threatened by the Post?
Justus Haucap: I wonder what kind of threats are supposed to be? Given the current situation on the job market, postmen or parcel drivers should quickly find other jobs. The potential threat of job cuts is rather manageable. And as for the end of universal service and the unified provision of postal services in the country, the Post has played with this card many times before, though not as aggressively as it is right now.
WORLD: How do you look at the collective bargaining round at the post office?
Haucap: I’m ambivalent about it. On the one hand, Swiss Post has a labor shortage and therefore needs attractive wages for young professionals. On the other hand, the Post is a monopoly company. With such a high wage demand, it is not clear to me why the postal group should be significantly more generous with wages than other companies in other sectors.
After all, the postal company can then pass the costs on to consumers. This does not serve consumer protection. Rather, when it comes to wages, Swiss Post should be based on other logistics services.
WORLD: Isn’t the pay too low?
Haucap: Ultimately, the postman is a job in which many people have a chance. The parcel driver is not an apprenticeship. In areas where not much money is invested in training, wages often remain low.
WORLD: In order to reduce personnel costs, Swiss Post wants to implement changes in the new postal law. Will there ever be an amendment to the law?
Haucap: The chances of a new postal service law in Germany are greater than ever before. Time is overdue, since 1998 there hasn’t been any real improvement to the Postal Act. The Post has always successfully blocked it. Now the situation is different.
The political will for reform is evident in the SPD. When in doubt, the Greens and the FDP are in favor of more competition in the postal market and thus of an amendment to the law. Economics Minister Robert Habeck seems to want it. For example, higher ecological standards in postal delivery can also be enforced through competition in the mail market.
WORLD: What are important changes that you expect in the new postal law?
Haucap: Above all, it is about transparency in the business figures of the Post in the letter service and in parcel delivery. The accusation of anti-competitive behavior by Swiss Post keeps coming up, because it is supposed to make letter mail artificially expensive and the parcel service artificially cheap.
The postal group must ensure that the areas are unbundled in terms of accounting. There is no other way to increase competition. The state has imposed a much greater separation of business on the railways and also on Telekom than is the case with the post office. The British control authority Ofcom, for example, shows how this works with its strict regulations for the Royal Mail.
WORLD: What does all of this mean for Swiss Post customers – does it benefit them?
Haucap: In Germany, parcel prices tend to be low and letter prices tend to be high. The suspicion is that the post office is cross-subsidizing the packages with the letters. In such a monopoly business, this must be viewed critically because it impedes competition in letter delivery and makes it more difficult in the parcel service.
And finally, the letter service is exempt from VAT. Swiss Post’s competitors have to be 19 percent cheaper for many customers in order to be able to compete at all. This is non-transparent compensation by the state.
WORLD: Swiss Post wants to enforce slower letter delivery through the Postal Act. Isn’t that a disadvantage for customers?
Haucap: I’m relatively relaxed when it comes to running times. When it comes to time-critical shipments, there are all sorts of courier services in Germany that can take care of it. Customers have to pay more for that. A standard letter does not have to arrive as quickly and has the highest delivery quality.
Quality assurance and control are particularly important for postal customers. To do this, we need the Federal Network Agency to have the right to intervene, including effective fines.
WORLD: The Post believes that German postage is far too low compared to other European countries.
Haucap: We’ve had a series of very drastic postage increases from 52 cents to 85 cents now. Some of these increases were considerably higher than the inflation rate in the respective year. Certain reserves could be slumbering there. The problem is that we don’t even know how profitable the mail service is.
For this we need transparent accounting. You shouldn’t believe the claims for that long, even if the costs of delivery have recently increased. In addition, Swiss Post grants its major shipping customers huge discounts. One has the impression that the company works with predatory prices.
In the collective bargaining dispute at Deutsche Post, the fronts remain hardened. On Monday, the Verdi union began a ballot that will run until March 8 to decide on an indefinite strike. A labor dispute is likely to have significant consequences for letter and parcel shipping.
Source: WORLD
WORLD: Do you see the previously prescribed six-day delivery at risk?
Haucap: No, I don’t see that. But I personally wouldn’t stick to six-day postal delivery either. For example, I could do without Monday as the delivery day. In Scandinavia, for example, people don’t care about getting mail every day. Sometimes this only happens once a week.
WORLD: Is the letter no longer dear and important to the Germans?
Haucap: The role of the letter is no longer the same as it was 20 years ago. Today there are hardly any people who do not have an e-mail service. I don’t need Swiss Post for time-critical shipments. However, in the future, postage for letters should no longer generally cost 85 cents, for example, as it does today. The prices will vary depending on the service and quality.
WORLD: Is the Post still a monopoly company with its high level of state participation?
Haucap: Swiss Post has an estimated 98 percent market share for private letters and around 85 percent for business customers. This is clear market dominance. The more demanding and with more regulations letter delivery is designed in the postal law, the harder the work for the competitors. That’s why Swiss Post has this market position.
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