One letter in four comes via Royal Mail rival (UK)

Rivals to Royal Mail now handle one in every four letters and are poised to increase volumes further, The Times has learnt.
It is understood that Royal Mail now carries out the full process of collection, sorting and deliver of three out of every four letters posted, as against four out of five last year. This follows an exodus of blue-chip bulk mailing customers to rival operators such as TNT and Business Post.
More customers may have been pushed to quit Royal Mail after last year’s industrial action despite competitors still having to use Royal Mail’s infrastructure and postal staff for the “final mile” delivery.
Royal Mail’s business could shrink further if rivals continue to grow. TNT, one of its two main competitors, expects to handle 2.4billion items of mail this year. Business Post, which does not make specific forecasts, said it expected to exceed that amount. Last year TNT handled 1.8billion items out of a total annual postbag of 20billion and Business Post
TNT’s prediction of a 33 per cent increase in mail volumes comes as the company is building up local business as well as targeting large national customers such as utilities and banks. Nick Wells, Managing Director of TNT’s UK mail business, said the business was putting resources into five regional centres.
Royal Mail is paid by rivals for the “last mile” delivery. It claims it is paid too little although its competitors say that its prices are too high.
The loss of business to rivals comes as a review commissioned by the Government looks into the future of the state-owned group. There are growing worries from Royal Mail, Postcomm, the industry regulator, and the main postal union, that Royal Mail is facing dire financial problems.
The Hooper review into Royal Mail is scheduled to set out recommendations to the Government. The regulator has said that Royal Mail needs an injection of private equity. But even if stakeholders backed such a move, it is not clear what interest there would be from private equity because of Royal Mail’s huge pension deficit. It currently stands at GBP 3.4billion but could double after an actuarial review. Rivals to Royal Mail now handle one in every four letters and are poised to increase volumes further, The Times has learnt.
It is understood that Royal Mail now carries out the full process of collection, sorting and deliver of three out of every four letters posted, as against four out of five last year. This follows an exodus of blue-chip bulk mailing customers to rival operators such as TNT and Business Post.
More customers may have been pushed to quit Royal Mail after last year's industrial action despite competitors still having to use Royal Mail's infrastructure and postal staff for the “final mile” delivery.
Royal Mail's business could shrink further if rivals continue to grow. TNT, one of its two main competitors, expects to handle 2.4billion items of mail this year. Business Post, which does not make specific forecasts, said it expected to exceed that amount. Last year TNT handled 1.8billion items out of a total annual postbag of 20billion and Business Post
TNT's prediction of a 33 per cent increase in mail volumes comes as the company is building up local business as well as targeting large national customers such as utilities and banks. Nick Wells, managing director of TNT's UK mail business, said the business was putting resources into five regional centres. “It's entrepreneurial if they are going out and getting business. We now have healthcare trusts and councils as customers.”
Royal Mail is paid by rivals for the “last mile” delivery. It claims it is paid too little although its competitors say that its prices are too high.
The loss of business to rivals comes as a review commissioned by the Government looks into the future of the state-owned group. There are growing worries from Royal Mail, Postcomm, the industry regulator, and the main postal union, that Royal Mail is facing dire financial problems.
The Hooper review into Royal Mail is scheduled to set out recommendations to the Government. The regulator has said that Royal Mail needs an injection of private equity. But even if stakeholders backed such a move, it is not clear what interest there would be from private equity because of Royal Mail's huge pension deficit. It currently stands at GBP 3.4billion but could double after an actuarial review.
Millie Banerjee, chairman of Postwatch, the consumers' watchdog, said: “We are, of course, pleased that business customers in these difficult economic times are continuing to find ways to reduce postage costs by switching to alternative suppliers or by using Royal Mail's access product.

“The good news for Royal Mail is that they continue to deliver 99 per cent of letters. If and when Royal Mail modernises, it should win some of the business back.”
But a spokesman for the Communication Workers Union said: “It is no surprise that Royal Mail is losing market share. The current competition arrangements are a cherry picker's charter because they allow rivals to take lucrative business without having to handle all mail.”
A Royal Mail spokesman said: “Royal Mail is forced to keep a set margin between the prices we charge retail customers and the amount we charge rivals to use to our network. This means we can never be competitive no matter how efficient we become.”
Last year Royal Mail received a GBP 3.9billion bailout package from the Government to help with its pension shortfall and to fund new investment. But in May, when it announced a GBP 279million loss, it said it would need more money.