Tag: Europe

Royal Mail seeks Postcomm extension

Posted by | Jun 2, 2008 | |

Royal Mail has asked Postcomm to extend the suspension of the bulk compensation scheme for another year amid fears of further industrial action in the future.

The request comes on the back of poor performance figures released last week by Royal Mail. The postal services giant failed to achieve nine of the 12 minimum service targets in its licence, but claims the poor service levels were due to industrial action last summer.

Royal Mail only achieved an 85 per cent service level on first class mail against a target of 93 per cent. Last year, it achieved 94 per cent service levels for first class mail.

Postcomm is now consulting its stakeholders on whether to extend the suspension of compensation.

Speaking about the missed performance targets, Postwatch chair Millie Banerjee says: “What the figures do not reveal is what effect the strikes have had on the posting habits of social and business customers. Many of these customers had to find other ways to communicate. This will have reduced postal volumes, which will in turn damage Royal Mail’s financial stability for years to come.”

Average mailing volumes have been severely affected as a result of last year’s strikes, with daily volumes down from 84 million items to about 80 million.

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Belgium open to postal ties to Scandinavian group

Posted by | May 31, 2008 | |

Belgium is open to the idea of its postal service becoming part of the new joint Danish-Swedish mail group, a minister told Belgian business daily De Tijd in a story published on Saturday.

Sweden and Denmark agreed in April to merge the two countries’ post offices, creating a company with annual revenues of about USD 7.5 billion that will eventually be listed.

Sweden will own 58.23 percent of the capital. The letter of intent was also signed by private equity firm CVC Capital Partners which owns a minority stake in Post Danmark, the Danish post office.

The move has led to speculation about what might happen to Belgium’s postal service, in which the Belgian state has 50 percent and one share. Post Danmark and CVC have the remaining stake of just under 50 percent.

Vervotte was open to the idea of Belgium’s La Poste/De Post, and its 37,000 workers, becoming part of the new Scandinavian group.

Belgium has similarly said it wishes to retain control over former telecom monopoly Belgacom , but might be ready to lower its stake if Belgacom found a merger partner.

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Royal Mail under more pressure (UK)

Posted by | May 31, 2008 | |

Even though the Royal Mail has been under extreme pressure for a number of years it seems that the expected end to post office closures may be delayed. A report from an influential committee of MPs will this week confirm that the management of Royal Mail were not able to give a guarantee that the number of post offices in the network would stay above 11,500.
The company recent announced the planned closure of a further 2,500 post offices taking the limit down to the government declared minimum of 11,500. The committee of MPs are seriously thinking of reporting the company to the regulator Postcomm to try to resolve the issue as quickly as possible.
However, while the number of active post offices is set to fall significantly over the next couple of years, there are some in the business who blame the government and the competition authorities. They were the people that opened up the UK postal market at a time when Royal Mail was not in shape to compete.
There have also been major problems with the company’s pension scheme and a number of strikes over the last few years which have further deteriorated any confidence left in the operation. Quite where the closures will stop is unsure, but Royal Mail is not yet a competitive operation.

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Postwatch: 2007/08: Customer expectations were not met

Posted by | May 30, 2008 | |

Royal Mail released its performance figures for 2007/08. As expected these show a substantial decline against the previous year’s record breaking performance and that the company failed to achieve 9 of the 12 minimum service targets in its licence. Royal Mail’s performance was severely affected by official and unofficial industrial action.
Millie Banerjee, Chair of Postwatch, commenting on Royal Mail’s performance said: “Royal Mail’s recovery was severely blown off course by last summer’s strikes. Figures released today confirm that customers received poor levels of service. Furthermore, the fourth quarter results show that Royal Mail’s recovery from the industrial action was in some respects disappointingly slow.

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Labour provides some balance at the Rutgers conference on postal economics

Posted by | May 30, 2008 | |

At a special session for Labour at the recent Rutgers sponsored conference taking place in Portugal on Postal and Delivery Economics, three union presenters tried to add some balance to the proceedings by giving the view of labour on liberalisation and deregulation in the postal industry.
Billy Hayes from the CWU, UK, presented a paper that showed what has happened to the UK mail market and in particular to the problems Royal Mail now have in remaining a viable provider of the Universal Postal Service since the UK postal market had been liberalised. Billy told the conference that in the current review of Royal Mail it had been shown that liberalisation had been of no benefit to small and medium sized business and ordinary consumers, it had only been to the advantage of large companies.
Geoff Bickerton of the Canadian union, CUPW, told the conference that the majority of stakeholders in Canada and the United Sates did not favour a deregulation of the postal service which was being promoted by big business and the potential competitors. He said that the response to his research had been that stakeholders were saying, “if it isn’t broken don’t try and fix it!” Jim Sauber and John Baldwin in their paper argued that the failure to resolve the issue of historical pension liabilities was putting an unjustified burden onto the operating costs of the postal operators. They said that previous failures to properly fund pension pans now meant that postal operators now had huge liabilities that threatened the reform of the postal market and the ongoing viability of the universal service.

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