SMEs in danger of postal strikes (UK)

VARs are feeling the bite of the postal strike as the Federation of Small Businesses (FSB) warns further strikes could force small companies out of business.

The strike in October is believed to have cost the London economy alone more than GBP 300m after several thousand postal workers took part in the dispute, causing a backlog of 12 million letters and parcels in UK sorting offices.

Simon Briault, representative for the FSB, said: “It is not just about sending a few letters or parcels, it is about the whole economy. Research conducted by the FSB found that 94 per cent of SMEs use Royal Mail exclusively and 89 per cent of them use the company every day.

“SMEs do not really have an alternative to Royal Mail. Due to privatisation, alternative services have cherry picked the larger organisations, for example government bodies, and do not see SMEs as a business opportunity,” added Briault.

He continued, saying that SMEs are under severe pressure and the strike could cause businesses to close due to financial difficulties: “The FSB is trying to raise awareness of the issue and attempting to get Royal Mail to realise the position SMEs now occupy within the economy and the market. If SMEs are not receiving the cheques they need to stay buoyant, then they have to borrow money from banks and pay interest rates.”

Mike Gammie, IT services development manager at online VAR Misco, said: “Many businesses post us cheques – if we do not receive them then we cannot bank them.
“Royal Mail has not done itself any favours. Misco was looking at alternatives to Royal Mail before the strike and we are now opting for these,” added Gammie.