Extraordinary price adjustment
PostNord is implementing an extraordinary price adjustment on the 1. June 2022. The price adjustment is due to several causes. The most important factors are:
• Increasing cost of capital
• Growth in the general cost level in the market
• Diminishing capacity in the transportation sector
• The implementation of the EU Mobility policy package
Increased price levels
The inflation greatly impacts our industry. The increasing inflation rate of 3.5-4%, and the increasing cost of capital of approximately 10-15% both in 2021 and the current year, affects the sustainability of the transportation industry. Costs of vehicles, parts, and containers, increase beyond the general inflation rate. The price of a truck has increased by approximately 30% since 2020, and the price on tire has increased by up to 50%. The increases in price levels and cost of capital impact the growth in wages, which is expected to be around 3,5-4% within the transportation sector this year.
Governmental taxes and fees
Several subcontractors are exposed to large governmental invoices due to postponed taxes and fees during the pandemic, such as GST payments. The combination of the increasing cost levels and the large governmental invoices jeopardizes the security of supply, due to increased threat of bankruptcy among subcontractors. The negative pressure on capacity produces upward pressure on prices in the market.
Low availability of materials and foreign drivers
The war in the Ukraine contributed immediately to a drop in the availability of
materials, products, and foreign drivers in Europe. This situation will likely continue for the foreseeable future, and the lower transportation capacity in Europe elevate transportations prices in the while region, Norway included.
Stricker industry rules
The implementation of the last parts of the EU Mobility policy package positively promotes terms and working conditions for foreign drivers. It strengthens the regulation surrounding cabotage driving and wages. The EU Mobility policies elevates the general price level for transportation services. This in combination with higher wage growth in other EU countries compared to Norway over the last few years, lowers the attractiveness of Norway as a destination for foreign drivers. This negatively impacts both transportation capacity and the raise prices on domestic and imported transportation services further.
PostNord is actively reducing costs where possible, as well as implementing several measures to help our subcontractors, such as the energy surcharge since the 1. Mars 2022 and supplying advances payments. We to this to safeguard delivery services for us and for our customers and promote the sustainability of the transportation sector. We are dedicated to continuing these measures for as long as it is necessary.
With all measures we have and will implement, it is necessary to undertake an extraordinary price adjustment of 4,7% as of 1. June 2022 on all products and services.
For any questions regarding the price adjustment, please contact your PostNord sales representative.