Year: 2005

UK Royal Mail ‘needs GBP2bn to fight new competition’

Royal Mail said today that it needed to invest GBP2bn in modernisation as it braces itself for an onslaught of new competition from January 1. No less than 14 companies have registered with regulator Postcomm to handle post in the UK, including German firm Deutsche Post and Dutch postal service TNT. Royal Mail said it would “fight for every letter”, but stressed the importance of new investment. “Royal Mail will fight hard for every single letter. Royal Mail is determined to compete successfully in the open market – but in order to do so we need a fair regulatory regime and the ability to invest GBP2bn in the modernisation of the business,” Royal Mail spokesman David Simpson said.

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DHL, UPS eye business opportunities in China’s Qingdao

DHL has announced that it will launch cargo flights between Qingdao, east China’s Shandong Province, and Hong Kong via Hangzhou, in eastern Zhejiang Province, in February next year. Several months ago, another express giant UPS from the United States launched direct cargo flights between Qingdao and Inchon, the Republic of Korea. Ken Rorok, UPS Asia-Pacific regional president, said Qingdao, as a major harbor city, provides broader market opportunities.

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Rivals snap at the heels of UK Royal Mail

Royal Mail expects to lose “billions” of mail items to its rivals over the next 12 months, following the opening up of the market to full competition on January 1. And in the change that will follow the New Year’s day revolution in the postal services market, it is business customers that are expected to be in the lead. Royal Mail lost its monopoly on mailings of 4,000 and more items in April 2003. Next week, the rest of the Pounds 6.5bn market, including lower volumes of mail sent by small businesses, is being opened up. Companies account for more than 80 per cent of the licensed market: mail costing less than Pounds 1 and weighing less than 350g. Royal Mail’s main competitors include TNT Mail, the UK arm of TPG, the Dutch postal group; DHL Global Mail, the UK arm of Deutsche Post, the German postal operator; and UK Mail, owned by Business Post, a quoted express delivery company. Those competitors say they intend to use the January 1 liberalisation as a catalyst to step up the pressure on the state-owned operator, using a combination of pricing and product innovation to try to woo more of its business customers.

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Minister to talk with UK Royal Mail‘s Leighton after tough efficiency targets agreed

Ministers are to open talks with Royal Mail over its demands for up to Pounds 2bn of investment after the postal operator agreed to tough new targets for improving efficiency. The negotiations, which will run well into the new year, are expected to focus on several options, all of which would involve the government, which is the state-owned postal operator’s sole shareholder, putting public money into the company. With Royal Mail’s financial position precarious, and trade unions fearful of another round of job cuts, its management is lobbying the Department of Trade and Industry for help. One option under discussion would be to provide the company with a loan repayable over a number of years. Another option, favoured by Royal Mail, could be some form of equity investment, not unlike a rights issue, under which the government would inject cash as equity in return for a bigger dividend in future. Alan Johnson, trade and industry secretary, will lead the talks with Allan Leighton, Royal Mail chairman.

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US Postal Service ends 2005 with remarkable results

The results are in – the US Postal Service ended 2005 with a record sixth consecutive year of growth in productivity, wiped out its debt and delivered fifty percent more mail to 32 million more homes and businesses than it did 20 years ago while doing it at 1985 staffing levels. These results are highlighted in the just released 2005 Annual Report of the U.S. Postal Service. “These remarkable results reflect the strong efforts throughout the entire organization to remain focused on the transformational strategies we identified in 2002,” said Postmaster General John E. Potter and Board of Governors Chairman James C. Miller III.

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