Lost Mail Costs £450M
Late and lost mail cost businesses Pounds 450million last year, a report by Postwatch revealed yesterday.
Over half of companies said delays affected them. Some 7.3 per cent said they were “dissatisfied” with Royal Mail.
But over eight out of ten were “satisfied”.
The Royal Mail said: “For the past 15 months, nine out of ten first class letters have been arriving the next working day.”
FINANCIAL TIMES UK 18th October 2002
NATIONAL NEWS: MAIL SERVICE PROBLEMS ‘COST BUSINESS POUNDS 450M’ POSTWATCH FIRST ESTIMATE OF ANNUAL FINANCIAL BURDEN PLACED ON CORPORATE USERS OF ROYAL MAIL:
Late and lost mail cost businesses more than Pounds 450m last year, according to research commissioned by Postwatch, the postal watchdog.
The report, published today, provides estimates for the first time of the financial burden that delays and service problems place on Royal Mail’s business post users. Companies send about 86 per cent of mail. Royal Mail failed to meet targets set by Postcomm, the regulator, in almost all categories of mail services last year.
National Economic Research Associates, the economic consultants in charge of the research, estimated the cost to companies of this failure at Pounds 156m in 2001-02.
Judged against the yardstick of a 100 per cent perfect service, however, the total cost of delays was Pounds 456m.
The report comes weeks after Consignia, the mail operator that owns Royal Mail, announced it would phase out second deliveries in its three-year drive to return to profitability.
Peter Carr, chairman of Postwatch, said: “The DTI and the Treasury will note that a company they own is costing UK business Pounds 450m.”
The Federation of Small Businesses said late mail could affect a company’s cash flow. “Contracts, cheques and legal documents are all still received by post. Scrapping second delivery will make it difficult for Consignia to meet targets in the future.”
Reliability was considered to be the most important aspect of the service by 43 per cent of respondents, followed by speed of delivery and then price.
Companies were concerned that delivery standards were not met and that the standards set by the regulator were not high enough. Postcomm this month suggested raising performance targets.
Royal Mail questioned Postwatch’s headline figure of Pounds 450m, saying it assumed a system that delivered 100 per cent: “That’s misleading as no postal company offers that – and never could at ordinary postage rates.”
Royal Mail said it had agreed a scheme to compensate customers for delays. “Our compensation scheme for businesses means that if we don’t reach our targets, they will receive a rebate on their postal bills. The size of any rebates will be directly related to our performance.”
There was some good news for Consignia in the survey: 83 per cent of respondents said they were either very, or quite, satisfied with Royal Mail’s services. Only 7 per cent said they were very, or quite, dissatisfied.
* Consignia has begun negotiations with Computer Sciences Corporation to outsource the supply of its IT services under a Pounds 1.5bn contract. CSC, with BT and Xansa, will provide a range of IT services as part of a 10-year deal, including maintaining 42,000 desktop computers and managing and developing Consignia’s server.
Copyright © 2002: Financial Times Group
