MaltaPost Raises Postage Tariffs Amid Period Of Concerning Inflation
MaltaPost has raised the price of postage tariffs on inbound and outbound mail because – according to the national postal service itself – it is spending more money than it makes.
The price of stamps have increased. Stamps for local letters have increased by €0.07, making the price €0.37. Meanwhile, sending a letter overseas will cost a buyer €1.25 as opposed to the previous €0.86.
Executive director of MaltaPost, David Attard, told Times of Malta that the company was hit by a myriad of factors that enhanced their struggle.
Between the less-than-favourable effects of the COVID-19 pandemic, supply chain issues, a rise in airfreight costs, Brexit, and the introduction of VAT on low-value purchases outside the EU, the postal company found itself struggling to cope.
Nevertheless, Malta remains the country with the cheapest postal rates in the EU – juxtaposed with Denmark, the country with the most expensive tariffs.
In fact, a study by Deutsche Post found that Malta has maintained the cheapest tariff in the EU every year since 2008.
These low tariffs do come with a cost. MaltaPost’s profit has been dwindling since 2019.
The company is listed on the Malta Stock Exchange and in 2019, it turned a profit of €2.98 million. Meanwhile, in 2020, the revenue went down to €2.8 million, followed by another decrease in 2021 at €2.35 million.
As MaltaPost’s chairman Joseph Said explained “MaltaPost simply cannot be expected to continue fulfilling certain services at a financial loss.”
Postage tariffs are so cheap due to Maltese laws that bind the company with a universal service obligation – MaltaPost must provide an affordable service to each person in the company.
Such postal affordability is calculated according to how long a person must work to earn enough money to afford to post a letter.
A worker in Malta must work 1.38 minutes to be able to afford a letter. A significant amount of time less than the European average of 4.23 minutes.
Such a difference is most likely due to a Maltese law that prohibits MaltaPost from raising mail tariffs 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 provide their service at a profit.
To satisfy their duty, MaltaPost deploys nearly 800 personnel six days a week to collect mail from about 600 letter boxes around the islands. The letters are processed and delivered within the next day.
The company is also going green, using 80 electric vehicles to reduce its carbon footprint.
What do you think about this rise in price?
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