Rival services take advantage of Royal Mail’s troubles
Royal Mail has announced that its service disruption is over for the moment, but for many small businesses in Bucks, the damage has already been done and confidence has been badly shaken.
With SMEs forced to make alternative arrangements for vital aspects of their day to day running, many businesses have been left wondering if they can trust the postal service anymore.
And one competing postal business has already seen a major upturn in fortune in the wake of Royal Mail's troubles.
Janine Pike, director of SRP Security Systems in Abbey Barn Business Centre in High Wycombe, explained the sort of toll the strike action had taken on an SME like hers, which relies on the postal service on a daily basis.
Claire Prosser, policy executive at the Thames Valley Chamber of Commerce Group, warned that consumer confidence was bound to be shaken by the disruption, and thought that the Royal Mail needed to tread carefully. She said: "With continued strikes, decrease in service, and increase in costs, many loyal customers may lose confidence in Royal Mail, further spurring them to adopt the services of Royal Mail's competitors."
And already one rival service, based in Iver, has been reaping the rewards of the industrial action.
DX Network Services was originally set up to serve the legal community, during the industrial action of the mid to late seventies. With so many important documents to move, such as deeds, mortgage information, invoices and cheques, the legal profession was particularly sensitive to postal disruption. But now the company provides a service to a wide range of businesses.
James Greenbury, chief executive of DX Network Services, said: "As the only end-to-end competitor to the Royal Mail, we have seen a substantial increase in new customers since the first rumblings of proposed industrial action in June – in fact we took on more customers over the summer strike period than we did in the whole of 2006.
"Over 90 per cent of our customers are SMEs which are typically the businesses most severely affected by industrial action."
He noted that delayed postal payments could easily spell cash-flow disaster for a small business. DX's core service is document exchange, where customers drop off and collect their mail from dedicated mailboxes at more than 4,500 exchanges across the country. At present, only commercial facilities can currently send mail, although residential addresses can accept deliveries.
And while the Royal Mail is the most recognised postal service in the UK, Mr Greenbury thinks the disruption will leave brand loyalty waning.
He said: "Mail is one of those areas – like telephone lines or utilities – that people often don't think about until the service is disrupted. This summer's strikes, and the current escalation of industrial action has certainly bought mail to the forefront of people's minds – and the fact that we have received record levels of sales enquiries demonstrates an increasing awareness that there is an alternative for businesses."
He added that since the strike action began, sales enquiries had been up 30 per cent, and this was expected to translate to £10 million in terms of annual sales. Mr Greenbury said: "We believe that once customers have experienced the service DX provides, they will see no need to go back."
On Wednesday, Royal Mail announced that the proposed industrial action for the end of this week will not be going ahead. In a statement it said: "We are pleased to announce that the planned strike action for the remainder of this week will not be going ahead, and that a draft agreement between Royal Mail and the Communication Workers Union (CWU) has been reached concerning the current dispute."
The company apologised for the suspension of services and reinstated its special delivery service guarantees from Wednesday. It added that the rest of the postal service would be restored as soon as possible, pending further discussions with the CWU.
