Germans target Royal Mail

The German post office is likely to apply for a licence to collect business mail in the UK following the publication of plans to open the market to competition.
Deutsche Post is the largest in a group of postal and distribution companies thought to be queueing to enter previously closed parts of the UK market now that the regulator, Postcomm, is to end the postal delivery monopoly held by Consignia, formerly the Post Office. Other potential newcomers include TNT and Hays, along with UPS of the US.

Under Postcomm’s proposals, companies will be able to collect and deliver bulk mailings of 4,000 items or more for the first time from April, as the first of three stages towards full liberalisation in 2006.

Alternatively, the firms will collect mail and deliver it to regional offices of the Royal Mail, which will take it to its final destinations.

Deutsche Post, 25 per cent of which was sold off by the German government in 2000, has expanded aggressively into the commercial parcels and distribution businesses, buying stakes in DHL and Securicor and building an international business through Deutsche Global Mail.

A Deutsche source based in the UK told The Observer the firm was likely to apply for a licence to collect bulk mail from big users such as mail order companies.

‘We are looking carefully at a licence,’ he said. ‘We are looking at areas where our consumers will drive demand for these services and the areas we think it will work to start with are at larger volumes, from 25,000 upwards. We are thinking of mail order and similar companies.’

Deutsche would canvass opinion among potential customers before applying.

Industry sources indicated that TNT – which already holds special licences to deliver stock exchange certificates and internal mail for a major bank – was interested. It was waiting to see what prices Consignia would charge for delivery to the final destinations.

Hays, which also has special licences, is also thought to be interested. Neither company would make an official comment .

Meanwhile, John Keggie, deputy general secretary of the Communication Workers Union (CWU), said industrial action over at Royal Mail was now almost certain.

The CWU has been balloting its members since 23 January, and voting closes on Thursday. Keggie met officials from the union’s 10 regions along with 27 ‘field officers’ last week so that they could brief him on the mood among members.

‘The indications from our representatives are that there is going to be a positive vote for industrial action by a substantial margin.’

Keggie has been attending arbitration hearings with Consignia at the conciliation service, Acas, over the dispute. The union is demanding a 5 per cent pay rise for mail workers, to be phased in by September. Consignia has so far offered only 2 per cent.

Keggie said the management promised at a meeting on Friday that it would improve this, though it would not meet the full claim.

But he added: ‘It will not be enough to avert action.’

Keggie has been in touch with Trade and Industry Minister Douglas Alexander, although the Government is trying to stand aloof from the dispute. The CWU expects further contacts next week.

Keggie said Postcomm’s proposals to end Consignia’s monopoly would kill jobs and could cause further unrest.