Post Office rivals free to seek bulk work
PRIVATE sector and foreign postal organisations will today be free to apply for a long-term licence to deliver bulk mail in the UK, despite efforts by the Post Office to hold on to its monopoly.
The sweeping liberalisation of the postal market begins just days after the postal regulator, Postcomm, bowed to pressure from ministers, cross-party MPs and unions to postpone for a year its original plan to open postal services to full competition from April 2006.
Hays DX, UK Mail, a subsidiary of Business Post, TPG, operator of the Dutch postal service, and Deutsche Post, the German national postal group, yesterday confirmed that they would seek licences to deliver bulk mail from January next year.
The licences will be issued by the regulator for an indefinite period of at least four years and will allow private companies to deliver bulk orders consisting of more than 4,000 items per mailing. The move represents the opening up of 30 per cent of the letter market and is estimated to be worth Pounds 1.4 billion.
Postcomm will assess the applications from today before putting them out to public consultation later this year, so that the companies can begin delivering mail from January 1 2003.
The move allows Consignia’s would-be rivals to start wooing long-term business customers from the former Post Office.
Figures released yesterday showed that the Royal Mail is still missing its target for delivering first-class letters, although it has made substantial improvements. Nine out of ten first-class letters were delivered on time in the past few months, slightly below the target set for the Royal Mail.
Reliability in February and March was 91.6 per cent, the highest since August 2000, against a licence target of 92.1per cent.
Currently Postcomm has awarded eight interim licences, and almost all the holders plan to seek long-term licences that would let them deliver bulk mail for organisations such as government departments, utility companies and banks.
Paul Carvell, chief executive of Business Post, said: “We will submit our application immediately and will apply for a nationwide service, collecting from all our sites and delivering to all destinations.”
Business Post is planning to invest between Pounds 5 million and Pounds 10 million in its UK Mail subsidiary in the next three years and claims a waiting list of “hundreds” of customers looking to test its service.
David Sibbick, a spokesman for Hays DX, confirmed that it too would act quickly to apply for long-term licences. He said: “Customers are interested in our service, but don’t like the fact that we don’t have tenure in the market. This changes all that.”
TPG, the Dutch postal operator, also confirmed it would act quickly to secure a key presence in Britain’s mail market.
However, the awarding of full licences may be held up by the conflict brewing between Consignia and the regulator over the price Royal Mail can charge competitors for delivering mail over the “final mile”. Consignia is expected to fight fiercely in negotiations over this charge, enlisting all the political pressure that caused Postcomm to delay the opening of full competition for a year.
Consignia has already failed to reach agreement on access charges or tariffs with Business Post, whose plan to deliver business mail under 350 grammes to London, Birmingham and other cities has been delayed for several months as a result.
