UK Business Post and Royal Mail sign first access agreement
Business Post and Royal Mail have signed the first agreement of its kind in Europe to enable access to Royal Mail’s local sorting and final delivery network.
From April 2004, the Business Class service run by Business Post’s subsidiary,
UK Mail, will offer large mailers (initially, businesses mailing over 4,000 and,
typically, over 10,000, pre-sorted letters a day) two day mail delivery with
track-and-trace up to the point of handover to Royal Mail, and flexibility of
collection.
For letters under 60g in weight – covering the vast majority of business mail –
the access charge to Royal Mail’s 73 Inward Mail Centres for UK Mail for 2004/05
has been agreed at 13.0p (for letters already sorted to each of Royal Mail’s
1,450 Delivery Offices) and 13.375p (for letters alreadysorted to each of Royal
Mail’s 121 postcode areas). In addition, UK Mail and Royal Mail have agreed to
work together to trial access at Delivery Offices.
Business Post’s Chief Executive, Paul Carvell, stated “Our Access Agreement
represents a highly satisfactory basis on which Business Post intends to build a
substantial, profitable business.
We believe that the combination of Business Post’s strengths in efficient,
time-critical, tracked nationwide express distribution with Royal Mail’s
strengths in local coverage and the reputation of the 80,000 local delivery
postmen and women will enable a highly reliable two day end-to-end delivery
service to be provided at an attractive price.”
Royal Mail’s Chief Executive, Adam Crozier, said: “Royal Mail and UK Mail have
worked together closely and constructively on this Access Agreement. I’m
confident we have got a deal that will work for UK Mail and its customers, and
for Royal Mail and its people.
The agreement is a landmark. It’s the first access deal of its kind in Europe
and it marks a new phase in the development of competition and choice in the UK
mail market.”
Mr Crozier added, “The contract we’ve signed today gives Royal Mail a commercial
income stream without undermining our ability to continue providing a
one-price-goes-anywhere universal service to the UK’s 27 million addresses.
Those are the key considerations. We’ve demonstrated that it’s possible to reach
a commercial agreement on access while safeguarding the universal service.
Like Royal Mail, UK Mail recognises the vital importance of a universal postal
service. The only way Royal Mail can deliver at one affordable price to 27
million addresses is if the cost of handling all mail is averaged over the
entire country. This deal does that. It will ensure that, overall, the letters
presented to Royal Mail by UK Mail resemble an ‘average’ bag of mail.”
Mr Crozier signalled Royal Mail’s willingness to enter into similar access
agreements with other companies to “wholesale” Royal Mail’s unique nationwide
delivery network.
“The key test for Royal Mail is that any access deal is a commercial one which
does not pose a threat to the universal service,” said Mr Crozier.
