UK Royal Mail calls for competition
Royal Mail’s Chief Executive, Adam Crozier, today encouraged the early opening of the mail market provided the regulations which stop Royal Mail competing are removed.
“Customers should have a proper choice. Royal Mail believes the market should be opened faster than originally planned as long as restrictions on Royal Mail are removed,” he said.
“I am very confident that Royal Mail’s people can succeed in a competitive market. They are more than capable of delivering high quality service to customers.
“But the handcuffs have got to come off. Royal Mail wants to see simple, light-touch regulation allowing the company to make an acceptable rate of return on its turnover. Some of our biggest rivals, including the German and Dutch postal businesses, are making returns of more than 20% compared to Royal Mail’s 2.5% return on its day-to-day operations from the turnover in its letters business in the last financial year.
“Unlike every other company in the market, Royal Mail has a rock-solid commitment to maintaining its one-price-goes-anywhere universal service to the UK’s 27 million addresses.
“That’s the bedrock of the postal service and it gives every customer an assurance that they can continue posting a letter for the price of a stamp to any UK address. Royal Mail’s prices are among the very lowest in Europe and we are determined to keep providing that universal service.
“But we are also saying to the regulator that business bulk mail services should not be part of the universal service obligation. These are among the most profitable postal services and it’s where major competitors will be focused.
“Royal Mail believes in open market competition provided it has the same pricing flexibility as its big competitors,” said Mr Crozier.
He said the current quality of service was now showing a very big improvement on the performance in the spring.
In August, 92.4% of First Class letters had been delivered the day after posting – the best performance for a year and just a fraction below the target level of 92.5%. The Second Class performance in August was 99.0% – above the 98.5% target level.
“We are confident the July-to-September quality of service results will be substantially better than the figures for the first three months of the financial year covering April to June,” said Mr Crozier.
“We are now 98% of the way to completing the modernisation programme to make Royal Mail more efficient and to equip the company to deliver high quality service, profitable performance on a long-term basis,” said Mr Crozier.
“The service has been delivered by our people and I know they have a fantastic commitment to ensuring the company succeeds in delivering a consistent, high performance to our customers.”
Commenting on the regulator’s proposals for a market opening, Mr Crozier added: “Customers deserve real choice in an open market not postal chaos.
“There has to be careful licensing of new entrants to ensure customers’ interests are protected to avoid a free-for-all with customers left to find their way among potentially dozens of rivals with varying quality of service.”
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