Royal Mail rival plans to employ its own postmen
Royal Mail’s biggest rival wants to put its own postmen and women on the streets across the country within five to ten years in the biggest assault on the state-owned postal group’s business.
TNT, which has the largest share of the competitive postal market with 1.2 billion items this year, is expected soon to begin a trial of its own delivery system in a city centre and then follow that with deliveries in the UK’s main cities.
At present the Dutch group, like Royal Mail’s other rivals, carries out its own collection and sorting of business post but then has to put it into Royal Mail’s system for final delivery.
Peter Bakker, chief executive of TNT, believes that this system is not suitable long term as it makes rivals dependent on their main competitor. He told The Times: “It is relatively easy if you put your mind to it to start a delivery system.”
He said the growth of TNT in the UK meant that it wanted to have its own delivery network “sooner rather than later” and that this could be achieved in five to ten years if growth continued at its present rate.
The opening of the postal market to full competition earlier this year has helped to trigger a 300 per cent rise in TNT’s volume of mail to its current level as it has netted large customers including government departments.
Nick Wells, head of TNT’s UK operations, said that the group wanted to move in to deliveries in order to offer a fuller service.
If TNT operated its own delivery service in cities it would be a blow to Royal Mail’s revenues and could also provide another delivery service into which smaller, niche postal groups may be able to buy. It is believed that TNT is targeting Birmingham, Manchester, Glasgow and Edinburgh first.
TNT’s 1.2 billion share of the market represents a 5.4 per cent share of the total annual market in the UK. This year, with the advent of full competition, that figure is expected to exceed three billion items. However, because there is no alternative delivery system then Royal Mail gets all those items back for the final stage.
A spokesman for Royal Mail said of TNT’s delivery plans: “It is another sign of increasing competition and Royal Mail’s resolve is to be totally focused on our quality of service which is already at very high levels.”
Meanwhile, TNT is considering a legal challenge to the £1.75 billion that the Government has said that it will make available to Royal Mail to help its pension deficit and investment requirements.
Mr Wells said that TNT needed to see the commercial details of the money, which was promised in May but hasn’t yet been delivered, and if it looked like state aid the company would challenge it in Europe.
