Tag: Europe

Mail volume decline at Royal Mail could get worse (UK)

Posted by | May 8, 2008 | |

Falling mail volume has been blamed for a USD 707m loss in the States by US postal service, the American postal operator, and a similar problem is likely to affect mail volume at Royal Mail this year.

Increased fuel prices, a drop in bulk mail from housing and credit markets have all added to US postal serviceSlosses during its fiscal second quarter, despite cost-cutting measures and efficiency improvements.

Mail volume is decreasing year on year for many postal operators but the present ‘credit crunch’ is likely to hit postal operators across Europe particularly hard as advertisers cut back on expensive mailshots in what is becoming a tough time for economies.

The UK has reported a slow-down in the market for detached homes in the GBP 500,000+ bracket and with new mortgages more difficult to obtain, expenditure on mail-outs in the sector is likely to fall but credit houses which make up a large percentage of bulk and junk mail will see far greater decline.

A rapid drop in mail volume would be bad news for Royal Mail which is already experiencing an annual decline in mail volume of around 2 pct as well as trying to clear the GBP 3.4bn pension deficit over some 17 years. Profits fell by a third last year to GBP 223m through the cost of strike action and contracts lost to competitors.

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Royal Mail racks up GBP 200m of losses

Posted by | May 8, 2008 | |

Royal Mail called today for price controls to be lifted after admitting it is now handling 3m letters a day fewer than it was a year ago and has run up GBP 200m of losses from its regulated letters and parcels business.

The figures underline the financial crisis facing the state-owned postal operator from private sector competition and the migration of post to the internet, coupled with the downward pressure on bonds and other investments in its retirement scheme.

The scale of the problems add urgency to a review of the market after an independent inquiry commissioned by the government warned earlier this week that liberalisation of the wider postal market had provided no benefit to the average customer but put the universal service at risk.

The company delivered 80m letters a day in the 12 months to March 31 2008, compared with 83m in the year before. The GBP 200m deficit incurred by its letters and parcels business regulated by Postcomm compared with a GBP 29m loss before and a GBP 200m profit two years ago.

The universal service, which guarantees the same price and delivery date for letters throughout Britain, was in the red – for the first time – to the tune of GBP 100m while the group’s overall letters division reported a GBP 3m loss.

Royal Mail’s group operating profits before exceptionals fell 30pct to GBP 162m while overall revenues rose 2.3pct to GBP 9.8bn. Crozier said the profit figure had been helped by cost-cutting mainly through a heavy programme of redundancies.

Post Office Ltd, which has closed 600 of its branches in the face of much local opposition, saw its operating loss fall from GBP 108m to GBP 34m as the Royal Mail benefited from a GBP 150m annual subsidy for keeping parts of the network open.

The company’s plan to close a further 2,100 post offices continues as Royal Mail reported that four million fewer people a week were visiting their local branch.

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Loss making Universal Postal Service (UK)

Posted by | May 8, 2008 | |

Postwatch is, of course, concerned that the Universal Postal Service (daily deliveries and collections at uniform prices) has moved from profit to loss.

We welcome Adam Crozier confirming that the Universal Service is a huge asset to Royal Mail, part of the social fabric of the UK and vitally important to the economy. Customers will be reassured to read that Royal Mail’s vision for the future includes providing a high quality, efficient and profitable Universal Service.

It is timely that the Government’s Independent Review of the Postal Market is underway and will be reporting within the year on how the Universal Service should be financed in the future.

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Leyland postal training firm wins Postcomm licence (UK)

Posted by | May 8, 2008 | |

Leyland based training organisation PeoplePost, has joined a select list of just 20 UK companies that hold licences issued by the UK postal regulator, Postcomm at a time of profound change in the GBP 7bn postal industry.

PeoplePost will join existing licence holders Royal Mail, TNT, DHL and UK Mail in the recently liberalised marketplace.

Postal licences are valid for a period of ten years.

PeoplePost’s founder is David McBride, the former Managing Director of Preston company Responsible Mailing.

David recently helped TNT Post to establish its first UK postal delivery operation in Liverpool as part of their plans to establish their own delivery network.

PeoplePost is offering a number of free training places on its summer training workshops for postal staff this summer in Leyland, Hemel Hempstead and Birmingham.

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Cologne/Bonn airport expects a loss

Posted by | May 8, 2008 | |

Cologne/Bonn airport expects to post a loss of EUR 6.9 million for the current year. The chairman of the board, Michael Garvens recently said in Cologne that the shortfall was due to the withdrawal of DHL and Lufthansa Cargo. He expects that the airport will only handle around 570,000 t of freight this year, which equates to 21 pct less than in 2007. After five successful years, 2008 will be one with challenged, Garvens stated. The airport hopes the situation will improve in the long term by its new customer FedEx, which wants to massively expand its activities from 2010. The airport boosted its turnover to EUR 271.1 million in 2007, a 5.8 pct increase compared to 2006. Earnings before tax rose by 10 pct to EUR 5.5 million.

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