"Yellow notice": increased number of complaints about failed delivery attempts at the Post AG

The number of delivery notifications (“yellow notices”) issued by the Österreichische Post AG (Austrian Post, in the following: Post AG) increased by 67 per cent in the period of 2016 and 2019. In surveys, 17 per cent of the respondents indicated to have received such a notice even though someone had been at home at the time of the delivery. Especially in the parcel sector, the Post AG is increasingly competing with online retailers who have optimized their business model for high-volume, urban areas. In the report published today on "The Österreichische Post AG – Quality of Mail and Parcel Delivery for Universal Service", the auditors of the Austrian Court of Audit (ACA) reveal deficits as regards the long-term safeguarding and the forward-oriented approach of the basic provision of postal services. The audit spanned the period of 2016 to 2019 as well as the first half of 2020.

Failed delivery although recipients claimed to have been at home

As far as the maintaining of customer satisfaction, but also the reduction of costs is concerned, the first-time hit rate is regarded as a significant indicator for the Post AG. In the period of 2016 and 2019, the number of delivery notifications (“yellow notices”) issued by the Post AG increased by 67 per cent in the period of 2016 and 2019, which was ten percentage points higher than the increase in parcel volumes. In a customer survey in 2019, 17 per cent of the respondents indicated to have received a “yellow notice” for parcel collection even though someone had been at home at the time of the delivery. In 2016, this rate was only at eleven per cent. The ACA recommends to the Post AG to pay increased attention to the unjustified issuance of “yellow notices”.

Moreover, complaints also increased for parcel deliveries, namely by 28 per cent from 2016 to 2019. In 2019, about 100,000 complaints were made with regard to mails and more than 110,000 concerning parcels. Furthermore, the Post AG failed to monitor lost consignments, also because the existing legal framework did not require such monitoring. Based on the compensation payments made by the Post AG for lost parcel shipments, the ACA ascertained that although their number was of minor significance in relation to the total volume of shipments, their share increased over time.

The ACA positively notes the speed of delivery: according to a European standard, 95 per cent of domestic priority letters should be delivered within one working day and 90 per cent of parcels within two working days. The Post AG mostly achieved or even exceeded these delivery times in the period of 2016 to 2019.

Affordable services throughout the country

Until 2011, the liberalization of the postal markets in the EU was driven forward in a process that lasted about 20 years. Since then, former monopoly companies have had to operate on an entrepreneurial basis. However, the basic provision of postal services is still regulated by the state. Such provision would otherwise be limited to metropolitan areas and remote areas would be undersupplied due to higher delivery costs. The Post AG is obliged to provide "continuous provision of high-quality basic postal services throughout the country at affordable prices for all customers". The regulated area of the so-called universal service includes, for example, postal items up to two kilograms, postal parcels up to ten kilograms, registered mail, official documents, newspapers and addressed advertising mail. In addition to the Post AG, other postal service providers offer individual regulated services. The Post AG, in turn, is also active in the non-regulated area.

Highly competitive parcels market

With a market share of 99 per cent, the Post AG has de facto maintained its monopoly position in the liberalized mail market. Although consignment volumes have declined, the total mail revenue has remained largely constant due to fee adjustments. In the parcel segment, on the other hand, the Post AG faces strong competition, especially in urban areas. Competitors, for example, are optimizing their business model by supplying high-volume, urban areas themselves and leaving the remote regions to the Post AG. In this context, the ACA refers to its recommendation to the legislator to develop a viable financial compensation mechanism. In the period of 2016 to 2019, the Post AG’s share of the Austrian parcel market averaged 48 per cent.
Overall, an average of 4.7 billion shipments per year were recorded from 2016 to 2019.

Future-oriented further development of the basic provision of postal services

The EU Postal Services Directive defines the minimum characteristics of the universal service, which is currently also being revised in the light of the significantly changed postal markets. The Federal Ministry of Agriculture, Regions and Tourism is responsible for regulation at the national level. The specialized department of the ministry entrusted with the tasks of the postal authority has to “take account of and summarily examine all issues” that are of fundamental importance for foresighted planning.

The ACA criticizes that the postal authority failed to regularly evaluate the universal service as required by law. The annual activity report of the regulatory authority was by far too inadequate to provide a basis that would have allowed the Federal Government and the National Council – ten years after the liberalisation of the postal market – to draw conclusions on the future development and safeguarding of the universal service. A corresponding report should be prepared or commissioned by the postal authority.