Maltapost has raised the price of inbound and outbound mail, saying that its role as the national postal service is costing it more money than it makes.
The price of a stamp to send a letter locally has increased from €0.30 to €0.37 and sending a letter overseas will set you back €1.25, an increase of €0.39 over the previous tariff of €0.86.
Rates had also increased in 2021.
Maltapost executive director David Attard told Times of Malta that the company was struggling to cope with the adverse effects of the virus pandemic, supply chain issues, rising airfreight costs, Brexit and the introduction of VAT on low-value purchases made from outside the EU, all of which had a negative effect on postal volumes.
He noted, however, that sending a physical letter from literally any place to any other place in the country remains one of the cheapest economic activities in people’s modern lives.
Even with the new tariffs, Malta is still the country with the cheapest postal rates in the EU. Denmark has the most expensive tariffs. Domestic mail in Denmark costs €3.88, in Finland it costs €3.35 and in Italy it costs €2.80.
A study by Deutsche Post found that Malta has sustained the cheapest tariff in the EU every year since 2008.
Maltapost, which is listed on the Malta Stock Exchange, turned a €2.35 million profit in 2021, down from €2.8 million in 2020 and €2.98 million in 2019.
In the company's annual report for 2021, chairman Joseph Said highlighted concerns about profitability, writing that "Malta Post simply cannot be expected to continue fulfilling certain services at a financial loss."
Maltapost's service obligation
Maltese law binds Maltapost with a universal service obligation. This means that the company must provide an affordable service to each person in the country, no matter where they live or where they wish to send their mail.
To fulfil this obligation, Maltapost deploys nearly 800 personnel six days a week to collect mail from about 600 letter boxes around the country.
They process all the letters and deliver them within the next day. It does not matter whether the letter box in Għarb has just one letter because Maltapost must send someone to collect it. And if it is addressed to someone in Birżebbuġa, Maltapost is obliged to deliver it the next day at the same rate, those few cents.
The EU Postal Services Directive determines postal affordability by calculating how long a worker must work to earn enough cash to afford to post a letter.
On average, a worker in Europe has to work 4.24 minutes to be able to afford a letter.
A worker in Malta must work just 1.38 minutes before they are able to afford it. And only Swiss workers have it better than the Maltese.
Attard explained that, as for the overseas mail, Maltapost not only must collect the letters from local letter boxes, process them, screen them for security purposes and send them to the airport, it must also pay the bulk of the tariff to the postal company in the other country to deliver the mail.
Furthermore, the law also prohibits Maltapost from raising mail tariffs without the approval of the Malta Communications Authority (MCA).
Consequently, earlier this year, Maltapost asked the MCA to approve a revision of tariffs on its postal services, arguing that it is operating its universal service obligation at a loss.
Last month, the MCA agreed to a select number of upward tariff revisions but Maltapost remains concerned.
“While these are, of course, welcome, they still do not fully address the core issue; namely that the company continues to deliver a number of universal service obligation services at a loss,” it said in a statement.
Attard said that Maltapost has managed to keep all of its 41 post offices open, despite the rising costs. He also said that, contrary to popular belief, the company has no monopoly over postal services in Malta. It must compete with other mail delivery companies.
He said the company is also going green, deploying over 80 electric vehicles to reduce its carbon footprint.