BONN (Reuters) - Deutsche Post (DPWGn.DE) is expanding its DHL parcel business in Germany, but new workers will have to accept lower wages than the group’s other employees as the postal and logistics group tries to compete in a rapidly growing industry.
The company plans to create 10,000 new jobs at the parcel business by 2020, a figure which could rise to around 20,000 by 2025, it said on Thursday.
The additional jobs will offer pay based on collective wage agreements for the logistics sector, rather than Deutsche Post’s more generous in-house agreement, putting the company on collision course with workers’ representatives.
“Parcel delivery is not sustainable under existing wage agreements, the competitive disadvantage is not viable,” management board member Juergen Gerdes told Reuters in an interview.
Deutsche Post has in the past said personnel costs at its parcel delivery business were about twice as high as those of competitors. Gerdes said attempts to achieve an agreement with union Verdi on more “market-adjusted” wages have so far failed.
“If we don’t act, the future of the division will be at risk,” he said.
Union Verdi criticised the plans as being designed to side-step existing pay agreements.
Like other former postal service monopolies in Europe, Deutsche Post is seeing its traditional letter business dwindle while deliveries of parcels are rising thanks to online retailing.
However, the parcels sector in Europe, in which UPS (UPS.N), TNT TNTE.AS and UK Mail UKM.L are also active, is seeing increased competition, with online retailer Amazon.com (AMZN.O) also carrying out more of its own deliveries.
Another former monopoly, Britain’s Royal Mail (RMG.L) has warned of slowing growth in the UK parcels market and on Thursday reported letter volumes down 3 percent in the first nine months of its financial year.
Deutsche Post is not the only company to make use of lower logistics pay deals in Germany.
Amazon has seen repeated strike action by warehouse workers in Germany as Verdi pressures the U.S. company to pay workers according to mail order and retail sector collective pay deals rather than those in the logistics sector.
Reporting by Matthias Inverardi; Writing by Maria Sheahan and Victoria Bryan, editing by Emma Thomasson and Keith Weir