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Postcomm agrees changes to Royal Mail's retail compensation schemes

Posted by | May 21, 2008 | |

Postcomm today agreed Royal Mail’s proposed changes to its retail compensation arrangements for lost, damaged and delayed mail.

The key changes, which will come into effect on 1 August 2008, are:

For items posted with Royal Mail which have no intrinsic value (for example a 1st or 2nd class letter), or where a claimant cannot provide proof of posting, there will be compensation for loss, damage and delay of a minimum of six 1st class stamps (currently worth GBP 2.16);
For items that have an intrinsic value, with proof of posting with Royal Mail and proof of value (such as an invoice or receipt) customers will be entitled to a postage refund plus compensation for actual loss up to the value of the item, or 100 1st class stamps (currently GBP 36), whichever is the lowest;
compensation for delayed retail mail will become payable one day earlier than at present – three working days after the due delivery date instead of four;
GBP 5 and GBP 10 payments for delay and substantial delay will be discontinued, except for Special Delivery Next Day (not posted on account);
Redirected retail mail will now be eligible for compensation for delay; and
users of the Articles for the Blind service will now be able to claim compensation for loss, damage and delay.
The new compensation arrangements simplify and align the processes for making a claim, the evidence required to support a claim, and the compensation payments themselves.

Royal Mail estimates that the new arrangements will result in a slight overall increase in the total compensation payable under the retail scheme.

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Business Post wants Royal Mail segregation (UK)

Posted by | May 21, 2008 | |

Parcels to post group Business Post hit forecasts for last year with good growth in its UK mail arm and a recovery by its parcels division.

Revenues grew by 10.1% to GBP 358.6m with profit before tax at GBP 14.2m, up 44.9% on last year. This profit increase was achieved despite the termination of the Federal Express contract in April 2007 Business Post said. Adding that back, revenue rose by 16.5%.

UK mail revenues jumped by 52% to GBP 137m with profits up by 56% to GBP 10m. Business Post added it has written to the government’s review of the postal market suggesting that the selling and distribution elements of Royal Mail be segregated. “We believe this proposal will incentivise the Royal Mail network to become more efficient and profitable,” it said.

Revenues in Parcels were up 2% for the year on a like-for-like basis (excluding FedEx). Reported revenues were 7.2% lower at GBP 179.8m (2007: GBP 193.8m). Parcel’s operating profit increased by 2% to GBP 15.4m. Specialist Services operating profits reduced by 35% to GBP 1.3m as the courier business was reorganised.

The start of the new financial year has been encouraging with trading in the early weeks in line with management’s expectations. The dividend for the year is unchanged at 17.2p.

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Royal Mail to post GBP 2.6bn shortfall by 2010

Posted by | May 21, 2008 | |

Royal Mail will have made GBP 2.6 billion less than expected by the time that its price-control period ends in 2010, the company said yesterday.

The revenue shortfall from the present pricing plan, which controls the price of stamps, among other things, was attributed largely to Postcomm’s estimate in 2006 that the postal market would grow, rather than decline, as it has done.

In evidence to the government-commissioned review into the postal market, Royal Mail backed the initial findings that the “status quo is not tenable”.

Recently, Royal Mail said that it would need a new cash injection soon because of the declining market and escalating pension problems.

Its pension deficit could double to GBP 7 billion shortly and require GBP 1 billion a year in servicing. The postal group recorded a GBP 279 million pre-tax loss last year and operating profits fell 30 per cent to GBP 162 million.

Last week the regulator made a controversial call for private equity to be allowed to buy into the state-owned group — a move attacked as partial privatisation by unions. Last year Royal Mail received a GBP 3.9 billion rescue package from the Government.

The postal group’s evidence to the review said that it “fully recognises the need to accelerate its cultural and operational transformation, to become substantially more customer-focused, and to take costs out ahead of revenue declines”.

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Ecodriving equivalent to taking three million cars off the road (UK)

Posted by | May 21, 2008 | |

A carbon saving equivalent to taking three million cars off the road could be achieved by simply encouraging drivers to shift gear and adopt a more environmentally-aware approach to driving, a new study revealed today.

Despite the potential cash and carbon savings, drivers still lack awareness of environmentally-friendly driving practices, called ecodriving, according to a report by Forum for the Future and commissioned by Royal Mail.

The report, Fuelling Green Driving, reveals that there is still a long way to go to encourage consumers and employers to embrace ecodriving as nearly half the population (43 per cent) don’t know what it is. Furthermore, 32 per cent of people surveyed said they have heard of it, but have never even been tempted to try it.

Recognising the benefits, Royal Mail has launched a company wide awareness programme to help its 180,000 people switch to greener driving, whether for social or work driving. And almost 1,000 Royal Mail drivers have received in-depth classroom training to help them adopt more environmentally-friendly motoring practices with plans to train a further 2,000 in the coming months.

The report highlights that only one per cent of the population has received ecodriving training from an instructor. Moreover, a lack of information is a major barrier to ecodriving as 59 per cent of people require more information about the steps they need to take to encourage them to drive in an environmentally-friendly way. This was particularly prevalent among women where this figure rose to 72 per cent.

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Stamps.com gets USPS extension

Posted by | May 21, 2008 | |

Los Angeles-based Stamps.com, a provider of PC postage products and customized photo postage, said today that it has received an extension to offer its popular PhotoStamps product through May 16, 2009. The firm’s product allows consumers to upload any digital photograph or use a licensed image on their own, custom postage. According to Stamps.com, the extension is to the fourth phase of a market test for the postage, which is being offered with permission of the U.S. Postal Service in a pilot program. The company said that it has now sold more than 58 million of its PhotoStamps.

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US Postal Service begins e-waste recycling program

Posted by | May 21, 2008 | |

In an effort to improve electronics recycling in the United States, the US Postal Service is developing a free national collection program for small electronic items.

The program, now in a pilot stage, provides courtesy envelopes with pre-paid postage for patrons to deposit their unwanted digital cameras, printer cartridges, MP3 players, cell phones, and PDAs. International recycling company Clover Technologies Group processes the devices in its U.S. and Mexican facilities and then refurbishes and resells them if possible.

Now limited to select cities, including Chicago and Los Angeles, the program may expand nationwide in the fall, and it eventually may accept a wider range of devices. ‘It doesn’t cost us anything because [Clover] is paying for postage on the envelope,’ said Joanne Veto, a post office spokesperson. ‘For us, it’s a really smart thing to do.’

The program would be a de facto national electronic recycling program, the first for the United States. As the only industrialized nation not to ratify the 1989 Basel Convention, which requires its signatories to notify developing nations of incoming hazardous waste shipments, many environmentalists have criticized the country for its lack of action to reduce the international spread of electronic garbage, known as e-waste.

Americans discard at least 2 million tons of household electronics each year, according to the U.S. Environmental Protection Agency. Less than 20 percent of that e-waste is recycled, although state-led initiatives are beginning to improve this recycling rate. Once recycled, however, e-waste is frequently sold to brokers who ship it to the developing world, where it is often dismantled with little regard for worker safety, then burned in the open air or dumped into bodies of water.

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UPS to lay off staff and restructure in Spain

Posted by | May 20, 2008 | |

UPS is planning to restructure its operations in Spain affecting 230 employees. UPS Spain has 1,300 employees, with the main outcome expected to be the closure of its Vallecas storage centre in Madrid, according to the Spanish newspaper Expansión.

UPS made a net loss of EUR 890,000 on turnover of EUR 169 million in Spain last year, the business newspaper wrote.

The restructuring aims at bringing UPS’ operations across several sites on to its installations in the district of Coslada in Madrid, which has recently been expanded.

The Vallecas storage center to be closed down has a workforce of around 180. In view of the expected layoffs, UPS Spain offered union representatives negotiations on the issues of early retirement and transfer to the facility in Coslada.

In total, UPS’ Spanish network has 140 customer service centres, 19 distribution centres, five logistics centres and 700 vehicles, according to the newspaper.

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Royal Mail evidence to the independent review of the postal services sector

Posted by | May 20, 2008 | |

Royal Mail has now submitted its second set of evidence to the Independent Review of the UK Postal Services Sector. The company’s submission is outlined in the letter below, which was sent yesterday, along with its evidence, to Richard Hooper CBE at the Review Panel. The Management Summary is also attached.

Dear Richard

We are pleased to submit our second set of evidence for the Independent Review of the UK Postal Services sector. As you know, Royal Mail and its people believe passionately in the one-price-goes anywhere Universal Service at the heart of a vibrant UK postal market – and your review will be central in determining whether it can survive. The Universal Service connects us all together, it creates the opportunity for businesses to connect to each other and to consumers, it allows everyone to participate in the growing internet economy no matter where they are. It is literally part of the social fabric of this country and preserving it is not just an important priority but an essential one.

The Universal Service is, however, now in the red for the first time, having made an estimated loss last year of around GBP 100 million. We therefore wholeheartedly agree with the sentiment expressed in the Review Panel’s first report earlier this month “that the status quo is not tenable”. The Review Panel’s first report makes clear that a key part of the problem is the way in which the industry is regulated: the current regime was designed for a market in which volumes continue to rise yet the reality is that the overall UK postal market is declining, Royal Mail’s ability to compete with other mails operators is severely limited by regulatory constraints, and mail is increasingly competing with other communications media including broadband. It is clear that the postal services industry is not adequately responding to the fundamental market decline as the internet economy grows, and we agree with the Review Panel’s view set out in their interim report, “that the way in which the postal sector is regulated will need to change”.

Our firm belief is that a healthy, efficient and profitable Royal Mail is critically important for the future of the Universal Service and for the industry as a whole. Our Shareholder has given us support and investment over the last few years but we recognise that Royal Mail must do all it can to accelerate its transformation plan and take radical action to modernise and reduce costs in order to underpin the Universal Service in a declining market. As you have already concluded in your initial response, the overriding criterion is to “ensure that a universal service is sustainable” which is underpinned by five criteria:

• A high standard of service for customers
• An appropriate regulatory regime to protect customers where barriers to entry mean that there is limited competition and choice
• A regulatory framework which encourages fair and innovative competition where no barriers exist
• A stable financial future for Royal Mail
• The incentive for Royal Mail to modernise its operation, making it much more efficient, and change its culture

Royal Mail wants to ensure that there is a clear, deliverable and sustainable solution to the issues facing the postal industry and it is our hope that all stakeholders commit to delivering it quickly. Royal Mail believes that the solution has 13 key elements which, if implemented, would secure the Universal Service and help create a vibrant future for postal services within the wider communications market:

1. Royal Mail accelerating the pace of our cultural and operational transformation in a declining market.
2. The Universal Service confirmed as a high-quality, six-day, first and second class service which is geographically uniformly priced with existing high quality of service targets.
3. The Universal Service comprising stamp mail with product and price regulation for stamp and meter mail only to allow Royal Mail to continue to champion

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