Tag: Domestic

Postcomm hold open meeting on postal strikes (UK)

Posted by | May 19, 2008 | |

On 14 May, Postcomm held an open meeting ‘After the Postal Strikes’ to hear evidence on Royal Mail’s application for suspension of the ‘c factor’ adjustment (restrictions on the level by which Royal Mail can raise prices if service quality is not met) and the bulk mail compensation scheme, following industrial action last year.

Postwatch presented a number of areas in the application which Postcomm should investigate further, including whether:

– the whole of quarter 3 (from 3 Sept to 2 Dec) should be included in the application.
– recovery periods, following industrial action, within the application are reasonable.
– claims for unofficial industrial action should be included.

Postcomm have invited further written evidence by any interested parties on the impact of industrial action and Royal Mail’s application to be submitted by the end of May.

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Postwatch’s evidence to the Independent Review of the Postal Market

Posted by | May 19, 2008 | |

Postwatch, the watchdog for postal services, has today submitted to the Independent Review Panel answers to forty questions principally relating to the provision of the universal postal service (UPS). Postwatch also submitted and published the research it commissioned about the value of the universal service to customers.

Millie Banerjee, CBE, Chair of Postwatch said: “Postwatch is doing all it can to help the Independent Review Panel come forward with recommendations that overtly take account of customer needs. Postwatch is a keen supporter of a sustainable universal postal service which meets the needs of senders and receivers. We are acutely aware that declining mail volumes and the recent announcement by the Royal Mail that the UPS has become loss making give customers real cause for concern about the future of the service they value.”

Postwatch’s research is wide ranging and assesses; whether the current universal service fulfils customer needs and expectations, the sustainability of the universal service in the light of market changes; and alternative mechanisms for funding the universal service.

A summary of the research into the User needs of the Universal Service is attached at the end of this release. The main points from the customer perspective being:
• Next day delivery, reliability (in terms of published performance target being met) and deliveries to the door are valued;
• The frequency of collections should be included in the UPS but no strong preference for more than 5 days a week;
• Strong support for one price goes everywhere postage and recognition that current postage prices are affordable; and
• Homes but not all businesses value 6 deliveries a week.

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Sell-off of Royal Mail 'doomed'

Posted by | May 18, 2008 | |

A plan by regulator Postcomm to partly privatise Royal Mail will fail because of the company’s huge and growing pension deficit, according to a leading independent consultant.

John Ralfe said Royal Mail was technically insolvent with a GBP 3bn pension hole. ‘No trade or equity investor would even consider taking a stake unless Royal Mail could be shorn of its pensions,’ he said in a research note for RBC Capital Markets.

Ralfe said that even if the Government, Royal Mail’s owner, could be persuaded to run the pension scheme, it would be illegal because it would be a clear breach of the EU Treaty that bans anti-competitive state aid.

Postcomm’s suggestion that Britain should follow the lead of the Danish and Swedish postal services in allowing partial privatisation was not valid because neither had to cope with such huge pension liabilities.

The Postcomm plan has run into further opposition, with the Communication Workers Union, the main postal workers’ union, suggesting that the proposals overstepped the regulator’s remit.

And the Government would face opposition from its own MPs with close links to the CWU. Royal Mail announced last week that it made a GBP 279m loss in the year to March. And the company has two new and emerging problems.

First, mail volumes are starting to decline. And second, Royal Mail has been forced to open up its business post services to competition.

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