Business Post sorts out mail deal
EXPRESS delivery group Business Post yesterday revealed its alternative postal service, UK Mail, will finally hit the streets in the new year.
Chief executive Paul Carvell said a long-running pricing dispute with Royal Mail has been resolved by the postal regulator, Postcomm, clearing the way for the launch of the service – originally scheduled for April this year.
The news came as Business Post notched up a 6 per cent improvement in half-year profits to £7.1 million, boosted by a new deal with the US parcels giant FedEx.
Carvell said: “It’s been a long-winded process but Postcomm is an independent regulator which has to find the best solution for everyone – and that takes time.”
He added: “In the long term, we’re still extremely excited about our prospects in this business. The total market is worth around £5.3 billion per annum. We just want 3 per cent of that – but that’s £150 million and would double our turnover.”
Business Post is coming to Scotland next week to brief its institutional investors at Aegon, Aberforth and ISIS on its progress.
The group is one of a handful of companies awarded an interim licence from Postcomm to handle bulk mail as part of the deregulation of the postal network. Under the terms of the licence, the company is permitted to pick up letters and parcels from businesses, sort the mail, and pass it on to Royal Mail for final delivery.
But Business Post fell out with Royal Mail over the charges it should pay for final delivery, sparking the need for the regulator’s involvement.
Carvell said he was unable to disclose the levies which have now been agreed upon and Postcomm will make an announcement next month.
He added that he “wouldn’t have got out of bed” for the charges rival new entrant Deutsche Post has accepted. The German giant is to pay Royal Mail 21.9p for first class letters and 16.3p for second class.
Business Post has invested only £200,000 in setting up UK mail so far but an investment of about £5 million is planned for the second year of the operation as it expands across the UK
