Obsolete equipment threat to UK mail competitiveness
The Royal Mail is using obsolete equipment to sort letters and needs to spend GBP2 billion to remain commercially viable when the postal market is opened to competition in the New Year, its chief executive warned today. Adam Crozier told MPs that rival firms, including TNT and German-owned Deutsche Post, had modernised their businesses 15-20 years ago. There had been “chronic” under-investment in Royal Mail’s network, so that it only sorted 50% of its letters mechanically, compared with 90% for competitors, the Trade and Industry Select Committee was told. The Royal Mail said in a report to the MPs: “Much of the network depends on obsolete equipment and the business has significant distance to close to achieve best practices and processes. “Royal Mail requires significant investment and substantial operational change if it is to remain not only competitive but also commercially viable in a fully liberalised marketplace.”
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