Royal Mail presses regulator on competition
Royal Mail has urged the postal regulator to give it the freedom to compete in the business mail market with Hays, the company expected this week to be allowed to deliver some business post.
“We want to be given the flexibility to respond to this competition,” said Gillian Wilmot, managing director, yesterday. “We suspect that we will not be allowed to match Hays on price.”
Hays, which has applied for permission to collect and deliver mail overnight within the business districts of London, Manchester and Edinburgh, is expected to undercut the 27p charged by Royal Mail for first class delivery.
Ms Wilmot said Royal Mail might be able to offer a city-to-city service for as little as 15p, and would like to be able to do so. At present Royal Mail, the letters and parcels part of Consignia, is obliged to provide a same price service across the UK.
Ms Wilmot said that Royal Mail has been discussing a wide variety of ways in which to make the delivery service more responsive to its customers’ needs.
Options being considered included offering different levels of service to business customers and residential customers, and getting rid of the second daily delivery that is made in some urban areas.
Another option would be to allow customers to opt for a pick-up service or an evening delivery after they had returned from work.
She said that it would be at least a year before any changes were made as a result of this review, since extensive consultations with employees, customers and the regulator would have to take place first.
If the two-tier service were introduced, the target of delivering first class post across the country by 9.30am would probably be dropped on the basic service. Royal Mail falls short of this target with only 86.5 per cent overnight deliveries achieved in the June quarter, and significantly less in many postal areas.
Ms Wilmot said that customers would not necessarily have to pay more for the “premium” service promising early delivery of business mail. But she added that there might well be a difference between what Royal Mail could offer a substantial business receiving large volumes of mail in a city centre, and what it could offer a smaller business in an outlying area.
Ms Wilmot said that many individual customers were not that interested in getting their letters by 9.30am. “The picture of a family all eating breakfast together and waiting for the postman is outdated,” she said.
Postwatch, the body representing consumer interests, said that it had been pressing Royal Mail to consider some of the changes in question. “The second delivery accounts for about only 4 per cent of deliveries, and does not exist in most rural areas anyway,” it said.
Vehicle tender to close next month
Consignia’s tender to outsource its vehicle fleet, including post delivery vans, is to close on October 10, writes Gillian O’Connor. Gillian Wilmot, managing director of the Royal Mail, said only the vehicle financing was affected, and that the vehicles would continue to be driven by Consignia employees.
The move is part of Consignia’s attempt to act more commercially by securing best possible value from support services. When it announced the tender at the beginning of this month, Consignia said that “significant cost savings in both fleet management and maintenance are envisaged”.
