Association hits out at £37.2m Royal Mail ruling

A postal user body has hit out at the ruling that saved Royal Mail from paying £37.2m in compensation to bulk mailers. UK regulator Postcomm announced yesterday that the postal operator will not have to recompense mailers whose businesses were affected by the UK postal strikes during 2009-10.

The UK regulator announced that it had accepted in full Royal Mail’s application for relief from the financial impact of failure to meet quality of service targets.

Alan Halfacre, chairman of the Mail Users’ Association, an independent body concerned with commercially operated postal matters, said that Postcomm should take a more “robust approach” to Royal Mail.

He told Post&Parcel: “It is difficult to see how Postcomm has acted in a fully transparent manner.”

In the ruling, Postcomm said that there was “strong evidence” to the postal operator’s claim that a prolonged period of industrial action was “a direct result of the company’s ongoing transformation of its business.

A Postcomm statement said that “this process of transformation has been identified by Royal Mail, Postcomm, the Hooper Review and Government as essential and urgent to safeguard the provision of the universal service in the UK”.

However, Halfacre responded: “There is a rather dismissive approach in the demonstration of progress of transformation (and the consequent benefit to customers).

“For example, the decision states ‘significant strides in terms of transformation’ have been made because 235 walk sorting machines have been installed – well Richard Hooper in his update report only thinks there are 100, but more significantly is quite critical of progress on modernisation suggesting that only 8% of mail is walk sorted compared to 85% by leading EU operators.”

Postcomm stated yesterday that its primary duty is to safeguard the universal service.

In response, Halfacre added: “The final paragraph of the decision document perhaps sums up Postcomm’s lack of understanding of the bulk mail industry. Bulk mail is the fundamental support for the USO. No bulk mail equals no USO. Yet Postcomm continues to take the stance that bulk mail users can stand the pain both financially and in quality, they are wrong.

“Without some recognition that mailers should receive compensation for the inadequate performance of their supplier customers will further advance their plans to use the post even less.

“Do I think Postcomm should be seen to be taking a more robust approach to Royal Mail? Absolutely. Do I feel confident it will happen? No way.”

Do you agree with Halfacre? Is the Postcomm decision right or wrong? Please comment below…