Deutsche Post to use UK Royal Mail network

Deutsche Post, the German mail delivery company, has moved further into the UK business market by agreeing terms to use Royal Mail’s delivery network.

The move breaks months of deadlock and avoids the need for Postcomm, the postal regulator, to step in to set a price.

Terms of the agreement, expected to be approved formally by the Royal Mail board early this month, are the same as those announced in February between the Royal Mail and the UK Mail arm of Business Post, its private sector rival.

Royal Mail will deliver post collected and sorted by Deutsche Post. The German company will pay 13p for letters fully sorted by one of Royal Mail’s 1,450 delivery offices and 13.375p if items are only sorted by postcode.

Deutsche Post starts operating letter sorting centre in the UK (Deutsche Post baut Briefgeschaft in Grossbritannien aus)
Die WeltDie Welt 04-01-2004

Deutsche Post, the German postal service operator, has started operating a new state-of-the-art letter sorting centre in Croydon south of London. The new centre will be operated by Global Mail, Deutsche Post’s UK-based subsidiary, which was awarded a long-term licence for commercial mail forwarding services last week.

The centre can sort 7.5 million letters per month. The UK’s commercial mail sector will be gradually deregulated until 2007. Royal Mail currently has a market share of 99 per cent.

Abstracted from Die Welt

Analysts have estimated that on average door-to-door delivery accounts for half of Royal Mail’s costs and that a charge of less than 13p would be loss-making.

Michael Proffitt, Deutsche Post’s managing director for Europe and the UK, said he was “comfortable” with Royal Mail’s pricing levels.

He added that he had signed a seven-figure contract this week to handle inter-branch deliveries for a financial services company in the UK and hoped for similar deals to come.

Deutsche Post also announced it had relocated its 160 UK staff to a 74,000 sq ft facility in Croydon, south London, that would enable the company to triple its capacity to 7.5m items a month. Copyright Financial Times Limited 2004. All Rights Reserved.

Copyright © 2004 : Financial Times Information Limited.