Walkout by postmen to cost traders up to £50m

Small businesses stand to lose up to £50 million from the wildcat postal strikes that crippled services in London, the suburbs and beyond, the Federation of Small Businesses claims.

Stephen Alambritis, of the federation, said the strike would cost companies Pounds 30 million if the backlog was cleared in the next few days, but up to Pounds 50 million if it took longer to deliver the 50 million or so items delayed by the action. Royal Mail estimates it could take up to three weeks.

The federation calculates the monetary loss on a variety of factors such as orders being delayed, staff underworked because of a lack of work, loss of interest on cheques held up in the post, potential penalties from banks and the Inland Revenue over late payments, and meetings being rescheduled because paperwork could not be posted. Companies will have to bear these costs because they have no legal redress against the strike.

Simply posting a letter does not constitute a contract with Royal Mail, although it has a duty to deliver it. There is recompense only for special delivery services because the Royal Mail has agreed to deliver an item within a specific time. It is also impossible to insure against business interruptions as a result of strikes.

It is estimated that there are one million cheques sent in the post daily. The federation believes that half of these pertain to small businesses.