Author: Archive

As the Royal Mail faces up to its worst industrial crisis for years and the very real prospect of a damaging strike, rival companies such as TNT, DHL and Business Post will be aware of an opportunity.

Such companies have increasingly “cherry picked” the Royal Mail’s business – a trend that was given a fillip on 1 January when the Royal Mail’s letters monopoly was finally removed.

The state company’s competitors had already been creaming off the bulk mailing business used by large financial companies, utilities and government departments. Under a gradual deregulation process, rivals had been allowed to handle batches of 4,000 items and more since 2002. Under a so-called “access” agreement, private sector competitors collect the post from the organisations concerned, then distribute it to regional centres where it is then handed over to Royal Mail offices to be taken “the final mile”. The state-owned organisation receives 13p per item it delivers under the access arrangement, whereas the figure goes up to an average 17p if it supplies the full service.

Since 1 January and “full liberalisation”, Royal Mail’s competitors have been introducing services for smaller batches of mail, eating further into the Royal Mail’s bread-and-butter operations. Business Post’s UK Mail division has recently launched a service for volumes as low as 250 letters a day.