Author: Archive

UK Royal Mail seeks aid on pension gap

Posted by | Nov 18, 2005 | |

Royal Mail chairman Allan Leighton warned yesterday that the company could face bankruptcy without a solution to the mounting problems at its pension fund, one of the largest in the UK. The fund is already pounds 4.25bn in deficit but that could rise to about pounds 6bn under new calculations to cover the costs of people living longer, the company said yesterday. It could face an even bigger drain on its cash resources under proposals which would give companies less time to get their schemes back into the black. This year Royal Mail expects to pay about pounds 450m into its pension fund but it calculates that on a worst-case basis it could subsequently need to pump in almost pounds 1bn a year – which it says is well above the amount of cash it could be expected to generate. “We are dealing with a legacy from the past. If we could wipe that clear we could get on with running a profitable company. We are generating pounds 500m cash a year and may have to put twice that into the pension fund,” Mr Leighton said. Asked if the problem could push Royal Mail into bankruptcy he said “Of course it could; if you run out of cash you’re dead.”

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UPS Announces Rates For 2006

Posted by | Nov 18, 2005 | |

UPS today announced new 2006 rates for most US small package services, including a 3.9 percent increase in commercial ground services and a 5.5 percent rise in UPS air and international services. The company also will reduce by 2 percent the index used to determine its air fuel surcharge, a move that will directly benefit customers as fuel prices moderate and the index pushes the air fuel surcharge below the current 12.5 percent cap. UPS is maintaining this cap despite dramatic jet fuel price increases.

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UK Royal Mail seeks letters and Post Office chiefs

Posted by | Nov 18, 2005 | |

Royal Mail has axed the role of Post Office chief executive David Mills and is restructuring its management in an attempt to fend off competition from rival postal operators. The company said that it will shortly announce the appointment of two new managing directors – for the Post Office and Royal Mail Letters. While the Post Office was overseen by Mills, Royal Mail Letters fell under the jurisdiction of Adam Crozier, the group chief executive. Crozier will hand over control of the division to the new appointee, while Mills plans to leave the business at the end of this year. Royal Mail explained that the changes were part of its strategy to “streamline its group structure to give its four businesses the best platform to meet the growing competitive challenges in their markets”.

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Three out of four Belgians prefer paper mail

Posted by | Nov 18, 2005 | |

Three out of fours Belgians still prefer paper mail to email, a survey of the Belgian research bureau M.A.S, ordered by the Belgian postal service company De Post/La Poste, showed on November 18, 2005. The results of the survey showed that paper mail has a future, CEO of the Belgian postal company, Johnny Thijs, said. According to the survey, only 61 pct of the Belgians under 34 years preferred paper mail, while 84 pct of the surveyed aged over 55 years admitted they preferred paper mail. Eight of ten Belgians said they preferred to receive their bills and administrative documents on paper. Two of three surveyed said they hurried to open their mail box and experience the reading of the mail as a pleasant moment.

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La Poste receives 1m Euro fine

Posted by | Nov 17, 2005 | |

La Poste, the French postal service operator, has been fined 1m euros by the competition authorities. The reason for this is that the company had charged prices that benefited certain customers and its subsidiary Datapost, which specialises in sorting and mailing.

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Business Post rivals say they are growing

Posted by | Nov 17, 2005 | |

Business Post and chief executive Paul Carvell were in the eye of a parcels sector storm this week. At issue is the degree to which its high-profile problems are specific to the company and how much they reflect a downturn in the sector. The group has been under intense scrutiny as the only pure parcels firm to be publicly traded, and stock market sentiment is clear; the share price has plummeted from a steady 690p to just 320p as the group rushed out earlier-than-expected interim results and with them a second warning on profits in seven weeks. Carvell says year-on-year volumes are falling for the first time in the firm’s 34-year history. The decline reflects the market, he says, and rivals are said to have emailed him messages to that effect when he had to issue a profits warning on September 21.

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US postage rates going up again

Posted by | Nov 17, 2005 | |

Yesterday the Postal Service announced that it would raise rates by 5.4% on January 8th, 2006. The cost to mail a letter will increase by 2 cents to 39 cents. In their announcement, postal officials blamed Congress and the 2003 CSRS pension law for the rate hike, stating, “This rate increase – the first since 2002 – is needed to fulfill the requirement of a federal law passed in 2003. That law requires the Postal Service to establish a USD3.1 billion escrow account, with use of the funds to be determined by Congress at a later date. Without this federal mandate, it would not have been necessary to raise rates in 2006.”

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UK regulator set to reject Royal Mail plea over efficiency

Posted by | Nov 17, 2005 | |

The postal regulator is expected to reject Royal Mail’s plea for an easier regime on efficiency improvements when a final plan for price controls is produced this month. Nigel Stapleton, chairman of Postcomm, said that some of Royal Mail’s claims were “almost impossible to believe”. He criticised its initial business plan, submitted as part of the regulatory review of prices, as lacking coherence. In an interview with The Times, Mr Stapleton said that, although Postcomm might accept changes to its initial plans for stamp prices, it was unlikely to give ground on its demands for efficiency gains of 3 per cent. Royal Mail has said that it can manage only 1.5 per cent. Mr Stapleton said: “They achieved savings of 1 per cent in the 1990s with very little investment in the business and what was perceived as being poor management. Now they are intending greater investment and have what is regarded as a good management…It is almost impossible to believe their numbers.”

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