Legal Post bid to win share of Consignia's mail business
FIFE-based mail company Legal Post is to meet postal regulator Postcomm in an attempt to win a chunk of the lucrative business set to be exposed by the current shake up of Consignia.
Legal Post will ask for further details on the proposals, announced yesterday, to end Consignia’s postal monopoly and hand over business to rival operators, when it meets the regulator within the next fortnight .
Managing director John Yorkston said: “We’d like to think Postcomm could give us a list of clients becoming available, although it’s unlikely Consignia will be willing to provide this. The plans certainly appear to give us scope for more business.”
Royal Mail is at present the sole license-holder for deliveries of mail below 350 grams, or £1 in value. Its monopoly in this market, known as “the reserved area”, has stood for 360 years.
In the first phase of Postcomm’s plans, delivery companies will be issued licenses to handle batches of mail above 4,000 items, a market worth £1.5 billion a year.
Legal Post, which handles 28,000 items a day through its central operation at Rosyth Europarc, said it has the capacity to process the mammoth batches.
The regulator’s plans will come into effect in just eight weeks. Later phases will open up the remainder of the postal market by March 2006.
A spokesman for Postcomm said: “We see no reason to restrict the number of licenses we issue. If people come to us and say they can do it, then we’ll let them do it.”
Businesses sending bulk mail above 4,000 items include banks and building societies. Legal Post already handles internal mail for several Scottish financial institutions, including Dunfermline Building Society and Scottish Building Society. Other major clients include the Land Registry and the Legal Aid Board.
Legal Post will today announce turnover of £850,000 since operations began last January. It expects to break even in two to three months.
The opportunity to handle business bulk mail sits well with the company’s expansion plans. Set up by owners First Scottish Searching Services (FSSS) and the Law Society of Scotland to deliver documents for the legal industry, it has since taken on customers outside the profession.
The company now handles mail for around 1,000 legal firms, from a total Scottish market of around 1,800. The remainder of its 1,400 members are non-legal businesses.
Phase two of Postcomm’s plans, from April 2004, will open up a further 30 per cent of Consignia’s market by issuing licenses to deliver bulk mail above 500 items.
That will offer competitors the chance to handle mail for medium-sized businesses, schools and health authorities.
Two years later all licensing restrictions will be lifted, abolishing Royal Mail’s monopoly completely.
Yorkston said FSSS, where he is also managing director, will look at pumping more money into Legal Post to expand its operations. The company also has a facility with HBoS.
Concerns have been voiced that postal services in remote areas will suffer from the shake up. Yorkston said Legal Post plans to consolidate its business before extending services to areas such as Orkney and Shetland.
But he stressed the company’s commitment to serving Scotland’s more remote regions. “We show no favouritism in any way,” he said. “We’re committed to every area.”
