The week that was: 8 October 2010
TNT Post launches Northern Ireland operations, US Senator concerned over axing Saturday deliveries, and Potter disappointed with price-increase rejection… Good afternoon news fans. Welcome to ‘the week that was’, written lovingly to keep you up-to-date with the big stories making the headlines on Planet Post.
TNT Post has commenced operations in Northern Ireland, whilst the company also outlined its desire to compete with Royal Mail in the end-to-end market. A new depot has been opened in Newtonabbey, Belfast, and 20 new positions have been created. Nick Wells, chief executive, TNT Post UK, told Post&Parcel that the company plans to “grow significantly” by winning new business in Northern Ireland. Since the liberalisation of the postal market in 2004, TNT Post is allowed to compete with Royal Mail for the collection and sortation of mail, before it is handed over to the government-run organisation for final mile delivery. Wells said that TNT Post’s ambition “is to compete in the end-to-end market (e.g. the delivery of mail in the final mile), however the anti-competitive VAT laws give Royal Mail an unfair advantage, making this an inaccessible part of the market at this stage”. Despite this obstruction, Wells said TNT Post has seen “meteoric growth in the last six years”, also highlighting the company’s aspirations to reach-out into the neighbouring Republic of Ireland.
Over in the US, the chairman of the Senate’s Federal Workforce subcommittee has spoken of his concern for the 40,000 jobs that could be lost if the USPS is allowed to cut Saturday deliveries. Senator Daniel Akaka said that cutting 17% of the USPS delivery service for a projected 5% cost savings was a “heavy trade-off”. He also cast doubt on USPS estimates that moving to a five-day delivery service would save $3bn a year. Senator Akaka said: “I am concerned about the impact on federal workers in these challenging economic times. If such a dramatic shift in delivery service is to take place, policy-makers need to see a thorough analysis of the true savings and costs of reducing mail delivery to five days.” The Senator’s comments came as the Postal Regulatory Commission continues to review the USPS request to drop Saturday deliveries in order to help stem its $7bn-a-year losses. The Commission has been reviewing the request since April, describing it as “one of the most significant changes the Postal Service has ever presented to the Commission”.
Another initiative aimed at aiding the financially-stricken company was discussed this week by the US postmaster general. John E Potter spoke of his frustration after USPS was refused permission to increase the price of a first-class US stamp. Potter said he was “disappointed” to learn of the decision, but was “encouraged by [the PRC’s] acknowledgment and understanding of the larger financial risk [USPS] face through the mandated prefunding of Retiree Health Benefits”. The postmaster general also pointed out a number of requirements USPS needs in order to become financially stable, including changes to: the pensions obligation; retail offerings; and the ability to close loss-making post offices. Potter, in an open letter, said that USPS is “a viable business”. He said that in order to maintain that status, “USPS requires the elimination of several legislatively-imposed constraints that hamper [its] ability to operate efficiently and profitably.”
And finally…
Don’t forget that World Mail & Express Americas Conference 2011 is heading to Mexico City in February. Post&Parcel will be there and we hope you are too. For more details, click here.
