MEDS 2011: USO needs “fundamental reform”

Industry leaders attending today’s Mail & Express Delivery Show heard that the Universal Service Obligation (USO) is in need of “fundamental reform”. The event – which kicked-off this morning in London– also explored whether there is a developing coalition between the mail and express industries.

More than 330 delegates came through the doors at the Novotel London West in Hammersmith to hear what effect the political climate and changing market conditions could have upon mail operators.

Alex Walsh, director membership services at DMA, spoke on the survival of the USO, and whether legislation and market changes force a radical re-think.

Labelling Royal Mail’s financial problems as “severe”, Walsh said that the operator also has to contend with growing competition, and the relevance of physical mail in light of e-substitution. This in turn further reduces Royal Mail’s ability to fund the USO, which currently stands at approximately £4bn.

On top of increasing the price of stamps, which came into force on Monday in the UK, Walsh noted possible solutions, including the reduction of the USO’s scale and fewer deliveries. However, he noted that projected savings from these solutions would only be “a drop in the ocean” compared to Royal Mail’s overall financial deficit.

He said the operator needs to discover “what are the real needs for five years time”, evaluate the results, and conduct a true “root and branch review”.

“The USO is in need of fundamental reform. Can it survive? Not in its current form, it’s unaffordable,” he said.

Agreeing with Walsh, Ian Paterson, strategy and regulatory affairs, UK Mail, said that “USO has to develop, it has to evolve.”

“There is a need to consider more fundamental changes to USO specification and provision”, Paterson added. “We are in danger of turning the USO into a fossil.”

Mark Thomson, media director, Royal Mail, examined the changing outlook. Addressing delegates, he said: “Until teleportation becomes practical, mail will be the only way to send physical items to people at home. Email is saturated, mail is no longer the default channel, but is now a value channel.”

He added: “New brands are testing mail. Royal Mail is continuing to champion the value of mail as a medium.” However, he added: “Complexity is the issue Royal Mail is facing.”

Relevant Directory Listings

Listing image

SwipBox

Focus on the user experience SwipBox is focused on creating the world’s best user experience for delivering and picking up parcels using parcel lockers. Through a combination of intuitive network management software and hassle-free, app-operated parcel lockers, SwipBox delivers maximum convenience to logistics providers, retailers […]

Find out more

Other Directory Listings

Advertisement

Advertisement

Advertisement

P&P Poll

Loading

What’s the future of the postal USO?

Thank you for voting
You have already voted on this poll!
Please select an option!



MER Magazine


The Mail & Express Review (MER) Magazine is our quarterly print publication. Packed with original content and thought-provoking features, MER is a must-read for those who want the inside track on the industry.

 

News Archive

Pin It on Pinterest

Share This