UK milkmen set to deliver business post to households alongside daily pints
Letters and parcels will soon become a regular feature of the morning milk delivery. Express Dairies, which runs 3,500 milk rounds across the country, has won a long-term licence to compete with Royal Mail, delivering business post to households.
The new licence, which will have a minimum life of seven years, will allow Express to deliver up to 46m postal items each year. It replaces an interim licence, granted by regulator Postcomm last summer, which allowed Express to deliver up to 4.6m packets and letters from businesses to households.
The first licence was hailed as “a major development” in the company’s service and consumer response was positive. Tim Smith, executive director, said Express had proved the concept of milkmen delivering parcels and packets from businesses to households could work, and that it provided competitive pricing.
The licences are part of Postcomm’s plan to open the mail market to competition. They cover bulk mail, consolidation and enhanced document exchange services – which are among the more lucrative areas of the mail business.
TPG, the Dutch operator, and Hays Commercial Services were awarded seven-year licences earlier this year, which they said gave them additional stability in contracts with their business customers. Nine other companies hold interim licences, including German operator Deutsche Post.
Express uses its 100-strong depot network and milk round staff to deliver the post over the critical last few miles. It is already delivering 20,000 items each week and expects the number to grow rapidly thanks to the new licence.
The licence may help keep the traditional milk round alive. In 1980, nearly 90 per cent of homes had a regular morning milk delivery. That has fallen to about 25 per cent and is predicted to fall to 12 per cent by 2010.
But the licence will be an additional commercial challenge to Royal Mail, which is struggling to stem losses of Pounds 1m a day.
Royal Mail had accused the regulator of giving an unfair advantage to its foreign competitors after it published the terms and conditions for its long-term licences last year. It said Postcomm was opening the market much quicker in Britain than in the rest of the European Union.
Royal Mail has been calling for the regulator to establish a code determining the price rival operators will have to pay to use its delivery network. Such a code, it said, was needed to clarify the relationship between it and its rivals.
Peter Carr, chairman of the watchdog Postwatch, said the appearance of more entrants into the postal market would “lead to more customer choice and innovation”.
Copyright © 2003: Financial Times Group
