British Postal Services Commission May Allow Competition for Letter Delivery
The Royal Mail’s monopoly is to be blown away by the new postal regulator, which today forecasts a brave new world in which letters, costing less than the current first and second class rates, are delivered along with the morning milk or groceries.
Unions fear the introduction of competition could cost thousands of jobs at the Royal Mail.
With the Government having signalled the scrapping of the Royal Mail monopoly in the market for letters under UKpound 1, the Postal Services Commission — or Postcomm — has launched a consultation paper that could herald a free-for-all with the Post Office, now renamed Consignia, battling against a range of new competitors.
Postcomm envisages “a world in which letters could be collected and delivered by the local supermarket or milkmen, where independent postal operators could link up with the Royal Mail, and where customers would be able to shop around for a good deal on price and service quality”.
It sees competition to Consignia coming from existing or non-postal operators. “Businesses already engaged in a network-based industry — newspaper distributors, logistics and freight operators, milk delivery firms, supermarkets — could be licensed to convey mail as an add-on or extension of their core activities,” it says.
Freight group Hays, couriers Securicor and Business Post, and European postal operators, Deutsche Post, TNT of Holland and French State-owned La Poste have all expressed an interest.
But Postcomm admits full liberalisation could undermine Consignia’s statutory commitment to provide a universal service — a minimum standard of service to all in Britain.
Though Postcomm says international experience shows incumbent operators do not lose significant market share when there is competition, it adds:
“Consignia has argued that competition could undermine its provision of the universal service by taking away significant volumes of profitable business which, it argues, support any loss-making universal services and the common and overhead costs of its operations.” Postcomm says, however, that accountancy firm Andersen has found that the loss-making elements of Consignia’s business represent only 1.5 percent of total operating costs. It admits it could ask the Government to subsidise rural services.
—– To see more of the Evening Standard, or to subscribe to the newspaper, go to http://www.thisislondon.co.uk UKpound preceding a numeral refers to the United Kingdom’s pound sterling.
(c) 2001, Evening Standard, London. Distributed by Knight Ridder/Tribune Business News.
By Robert Lea
