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Collective bargaining dispute: Concerns despite record figures: Swiss Post is on the brink of a strike

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Deutsche Post DHL is rushing from one peak to the next, and has repeatedly raised its forecast in recent years. But in the German core business there is a risk of a protracted labor dispute.

For Swiss Post it is a day with two sides: on Thursday morning the announcement of record results is on the agenda – for company boss Frank Appel this is reason to be happy. But just a few hours later, the manager could get a damper: Then the Verdi union wants to announce the result of its ballot at the Bonn logistics company – and could then call an indefinite strike if three quarters of the Post employees surveyed have rejected their employer’s collective bargaining offer.

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Why is there a strike now?

In collective bargaining, Verdi wanted to push through a wage increase of 15 percent in a one-year contract and justified this with the high inflation, among other things. The Post rejected the claim as economically unsustainable. She offered a two-year contract that provides for a wage increase in two stages from 2024. According to their calculations, the pay of employees would improve by an average of 11.5 percent. Separately, starting this year, employees are to gradually receive 3,000 euros net, which will flow as an inflation compensation premium.

When was the last time there was a strike at the post office?

There have always been warning strikes, most recently in February. Such work stoppages are temporary and localized. The last time there was an indefinite strike after negotiations were broken off was in 2015 at the post office, when the spin-off of parcel subsidiaries with lower pay caused resentment. Strike is a rarity for the yellow giant and a serious step that Verdi would take.

What would be the consequences of a strike for consumers?

During the most recent warning strikes in January and February, millions of letters and packages were left lying around. In relation to the total amounts, however, these were only small percentages. Some recipients were unlucky and had to wait two or three days, others didn’t even notice the consequences of the warning strike. In all probability, it would be different with a strike: there should be considerable delays. According to Verdi, of the 200,000 employees in the core business, more than 100,000 are Verdi members – so roughly every second employee would be entitled to strike. In fact, participation is likely to fluctuate and differ from region to region.

How badly would a possible strike affect Swiss Post?

The post office would have to shoulder extra costs to keep up the flow of shipments. Roughly speaking: Due to a lack of staff, large quantities of parcels and letters are likely to pile up at the locations. The company would have to rent external warehouses and employ staff from external service providers. An expensive thing. During the strike in 2015, Swiss Post estimated the costs at 100 million euros.

How long would a possible strike last?

In 2015, it took four weeks for the indefinite strike to end – warning strikes had been intermittent for several months previously. How long a possible strike could last is unclear. Both sides emphasize that the other has to move. It will probably take some time before the willingness to compromise matures.

How is business at Deutsche Post?

All in all brilliant. The freight and express lines of business are booming, and international parcel shipping and supply chain services are also doing well. According to a company forecast from October 2022, the logistics company expects operating profits of up to 8.4 billion euros for the past year, which is more than five percent more than in 2021. Since the company has not changed this estimate since then, it should have roughly met the target.

How has the post changed?

The originally German company has developed into a major global corporation with a broad portfolio. When Frank Appel became CEO in 2008, letter and parcel shipping in Germany accounted for around 85 percent of operating profit (EBIT), with the rest only accounting for 15 percent. Since then, the group has experienced enormous growth and the situation has reversed: the core business only accounts for roughly 15 percent of the operating profit and the rest for 85 percent. This makes it clear: the music plays abroad.

How is the situation inland?

Around a third of the workforce works in the Post & Parcel Germany division – around 200,000 people. This is where the structural change is noticeable: the volume of letters is falling because people are increasingly relying on digital communication. On the other hand, the parcel volumes are increasing, in the Corona years there was an extra boost here due to the mail order boom. In the meantime, the growth in packages has normalized. Compared to other parts of the group, Post & Paket Deutschland is only moderately profitable. As a “universal service provider”, the company has to fulfill state obligations. The company is hoping for relaxation in the forthcoming reform of the outdated postal law.

What happens on the board?

Former McKinsey consultant Frank Appel has been at the helm of the group for 15 years. It will be over in two months: Then the 61-year-old will vacate his top position and the 47-year-old colleague Tobias Meyer will take over. In the future, Appel will concentrate on his work as Chairman of the Telekom Supervisory Board. This means that it remains in another part of the former Bundespost. His successor Meyer knows the Post well, from 2019 to 2022 he managed the core business of the logistician, the Post & Parcel Germany division. Meyer also used to work at McKinsey, and has been with the Bonn-based group since 2013.

Source: Stern

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