MaltaPost has raised the price of postage rates on incoming and outgoing mail because – according to the National Postal Service itself – it spends more money than it earns.
The price of stamps has increased. Stamps for local letters increased by €0.07, bringing the price to €0.37. Meanwhile, sending a letter abroad will cost the buyer €1.25 compared to €0.86 before.
MaltaPost chief executive David Attard told The Times of Malta that the company has been hit by a myriad of factors which have heightened their struggle.
Between the less than favorable effects of the COVID-19 pandemic, supply chain issues, rising airfreight costs, Brexit and the introduction of VAT on low value purchases outside EU, the postal company has struggled to cope.
Nevertheless, Malta remains the country with the cheapest postage rates in the EU – juxtaposed with Denmark, the country with the most expensive rates.
In fact, research by Deutsche Post found that Malta has maintained the cheapest EU tariff every year since 2008.
These low fares come at a cost. MaltaPost’s profits have been declining since 2019.
The company is listed on the Malta Stock Exchange and in 2019 it made a profit of €2.98 million. Meanwhile, in 2020, turnover fell to 2.8 million euros, followed by a further drop in 2021 to 2.35 million euros.
As MaltaPost Chairman Joseph Said explained, “MaltaPost simply cannot be expected to continue to provide certain services at financial loss”.
Postage rates are so cheap due to Maltese laws that bind the business to a universal service obligation – MaltaPost must provide an affordable service to every person in the business.
This postal accessibility is calculated based on how long a person must work to earn enough money to be able to post a letter.
A worker in Malta has to work 1.38 minutes to be able to pay for a letter. A time well below the European average of 4.23 minutes.
Such a discrepancy is most likely due to a Maltese law that prohibits MaltaPost from raising mail rates without the approval of the Malta Communications Authority (MCA).
In fact, the MCA agreed to increase tariff revisions last month, but MaltaPost remains unconvinced that the company will be able to deliver its service at a profit.
To fulfill their duty, MaltaPost deploys almost 800 people six days a week to collect mail from around 600 mailboxes around the islands. Letters are processed and delivered the next day.
The company is also going green by using 80 electric vehicles to reduce its carbon footprint.
What do you think of this price increase?