Tag: Europe

Royal Mail loses bid to bring in zonal pricing

Posted by | Jul 24, 2007 | |

Royal Mail’s hopes of boosting flagging profits by shaking up its charging structure were dealt a blow yesterday, when the regulator threw out its plans for zonal pricing.

Postcomm said it would reject Royal Mail’s proposal to charge according to the costs of delivering in certain areas because it would be “discriminatory”.

Rivals to the postal group complained that the plan would enable it to price them out of the market because it could lead prices down in lucrative, city centre locations. Consumers also feared that services to rural areas would suffer as Royal Mail charged more for going there.

Only business customers would have been affected by a switch to zonal pricing.

This was the cornerstone of its moves to increase competitiveness as it faces more rivals and a declining postal market. The group has also asked for rises in the price of stamps for domestic mail.

Nigel Stapleton, Postcomm chairman, said: “We are proposing to reject Royal Mail’s application mainly because it has put forward a pricing structure that appears to have a number of discriminatory features and would have been introduced in a way that would lead to unreasonable changes for customers.”

A Royal Mail spokesman said: “We are disappointed at the decision. This was a proposal that only affected large business users.”

Postcomm will next month publish a report setting out its objections to zonal pricing, after which there has to be a two-month consultation. But the rejection will be backed by Royal Mail’s customers so is unlikely to be reversed.

The regulator will also soon adjudicate in a row between Royal Mail and its rivals over the amount the state operator can charge competitors to use its infrastructure for the last mile delivery. Rivals say it is charging too much so they cannot make a sufficient margin, while it says it does not make enough profit on the arrangement.

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UK postal workers fury over pensions stitch up

Posted by | Jul 24, 2007 | |

Unions have accused the Royal Mail of a “stitch up” over leaked proposals to cut workers’ pensions.

The Daily Mirror reports it has seen a 24-page document on plans to tackle a GBP 6 billion shortfall in the pension fund.

Under the shake-up the final salary pension scheme could be closed to new members from next year and the age at which staff can retire with a full pension will be raised from 60 to 65 in 2010.

Union leaders vowed to fight the proposals, which would affect workers at Royal Mail, Post Office and Parcelforce Worldwide.

Dave Ward, deputy general secretary of the Communication Workers Union, told the Mirror the plan was a “stitch up”.

He said: “This is a savage attack on pay and conditions. Our members aren’t going to roll over and accept this.

“It will only galvanise support for strike action. It’s a stitch up. They may say they’re consulting but that’s a charade.

“It’s clear from the work in producing these plans that they’re determined to drive them through.”

The leaked document stresses no formal decision has been made and the proposals are designed to form a consultation basis.

According to the newspaper, the document says: “These changes would gradually reduce the Royal Mail’s overall pension costs and therefore reduce the future risk to our business, jobs and existing pensions.”

Future rises in pensionable pay for the company’s 167,000 workers would be capped at the inflation rate and lump sum payments on retirement would also be hit.

A Royal Mail spokesman said no decision has been made on the future of the pension scheme.

He said: “Royal Mail said very clearly earlier this year that it would be consulting on the future of the pension scheme for both new recruits and existing members but no decisions have yet been taken as we have not even begun the formal consultation.”

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Royal Mail may have to pay GBP 1bn for the redundancies it needs, says consumer chief

Posted by | Jul 24, 2007 | |

The government may need to come up with an extra GBP 1bn to fund a massive redundancy programme to help the Royal Mail out of its crisis, a consumer chief warned before strike action by the Communication Workers Union.

David Bland, a regional chairman of Postwatch, believes the Royal Mail has no alternative to automating its letter systems and slimming down its workforce if it wants to survive private-sector competition. He said no one in the industry would win from industrial action at a time when many users were turning to email and other alternatives to the state postal service.

Without a clear look at the Royal Mail books it was impossible to know how much money was needed, added Mr Bland, but he believed it would be hundreds of millions of pounds if not a billion.

The department of trade and industry – now business, enterprise and regulatory reform (BERR) – has already agreed to allow Royal Mail to borrow GBP 1.2 bn to help it fund modernization of its systems. It has also allowed Royal Mail to put some GBP 800 m in a special account as part of a programme to bolster its pension scheme as it fights off companies such as TNT and UK Mail that are winning more and more of its business customers.

Mr. Bland believes that Royal Mail is giving an over-gloomy picture of its pension requirements, but the company accepts revenues are falling along with an overall 2 pct annual decline in post volumes and it is not in a position to fund a large wave of redundancies.

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German mail operator PIN Group buys regional delivery firms

Posted by | Jul 24, 2007 | |

IN Group Privately-owned German mail company PIN Group has extended its geographical network with two acquisitions of regional delivery companies.

PIN Group, now majority-owned by publishing group Axel Springer, has bought the Ostsee-Post in Rostock, north-east Germany, and LN Briefkurier in northern Germany. Both companies were owned by regional newspaper companies which used them to diversify into mail deliveries.

“The mail companies of regional publishers with their expertise and delivery experience form the core of our company,” commented CEO Günter Thiel. With the acquisition of the Ostsee-Post and LN Briefkurier we are strengthening our network in the North-East.”

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UPS results: Export revenue rises 14 pct ; LTL shipments climb 12 pct

Posted by | Jul 24, 2007 | |

UPS today reported a solid 7.2 pct increase in diluted earnings per share for the second quarter to USD 1.04 on a 3.9 pct gain in revenue. Strong performance by the international package segment and encouraging trends in supply chain and freight overcame a challenging U.S. small package market.
International export revenues jumped 14 pct on double-digit volume growth. UPS Freight less-than-truckload (LTL) revenue climbed 10.5 pct on a 12 pctincrease in shipments.
“Strong gains in our international package segment offset a lack of growth in the U.S. business. We’re also executing well in our supply chain and freight business and are pleased with the profit improvements in this segment. We remain confident in the long-term growth prospects that the dynamic global marketplace offers UPS” said Mike Eskew, UPS’s chairman and CEO.
UPS expects diluted earnings per share for the third quarter to fall within a range of USD 0.99 to USD 1.04 compared to the USD 0.96 reported for the prior-year period.

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