End of post monopoly will be slow to deliver
The removal of Royal Mail’s monopoly would not signal the introduction of blue post boxes and rival postmen, the regulator said on Thursday. For most people, there would be no change to the way they posted and received mail in the near future.
Postcomm, the independent regulator for postal services, said: “The Royal Mail’s post boxes are safe and there are unlikely to be rival post boxes next to them in the foreseeable future, although it is a possibility after full competition is opened up. The universal service collecting and delivering mail, six days a week, at a common tariff, is staying.”
It is businesses posting bulk mail of 4,000 letters or more that will see the changes, as rival operators will now be allowed to compete for the work.
Business mail accounts for almost half of all letters posted. Other deliveries will be opened to competition over the next four years.
Postcomm predicts that these businesses will be approached in the coming months by the rival operators and offered reduced rates for delivering their post. The rival operator would collect the post and sort it, before a Consignia postman delivered it.
“Although the rival operators could employ their own postmen, we anticipate at least at the beginning, they will take advantage of Consignia’s extensive delivery network and use Consignia’s postmen,” said Postcomm.
It said it could not put a figure on how many operators would respond to the proposals in the consultation period ending next month.
Postcomm expects to produce a decision document in April on promoting postal competition and operators will then be able to make approaches for licences.
Companies involved in recent trials, such as Hays and TNT, are expected to take advantage of the changes to expand into the market for bulk mail deliveries.
However, Postcomm added that it might not be until the autumn or the end of the year that new operators would have built up the expertise to start offering the services.
The one change that most people may see as a result of the opening up of the business mail market is a better service from Consignia, according to the regulator.
Postcomm said: “Losing its monopoly will sharpen it up and make it more efficient.”
Talks on compensation for urban sub-postmasters
Negotiations are under way between Consignia and the government over compensation for sub-postmasters whose urban post offices face closure from declining revenue, writes Sarah Laitner.
Consignia does not know how many sub-postmasters may close their businesses, but there is speculation that 3,000 of the country’s 9,000 urban post offices could close. Most of them are owned by the people that run them.
Many urban and rural post offices are becoming unprofitable as they are used less for distributing benefit payments, which go directly to bank accounts.
Last year 547 post offices closed, of which 112 were urban. Consignia stressed that there were no plans to close more rural post offices. It is consulting the National Federation of Sub-Postmasters over the compensation packages, but said it could take several months before the package received regulatory approval.
“We are committed to making sure that 95 per cent of the urban population will not have to go any further than a mile to their nearest post office,” it added.
