Tag: Europe

Postcomm welcomes progress on VAT for postal services

Posted by | Mar 23, 2007 | |

Postcomm has welcomed the announcement earlier this week of a new type of access arrangement, designed to allow VAT-exempt organisations, including financial institutions and some charities, to take better advantage of the choices available in the newly-competitive mail market.

Under the new arrangements, mail operators offering access will no longer be required to charge VAT on the whole cost of their access schemes. Instead, VAT is only required to be charged on the ‘upstream’ element of these arrangements – that is, the collection and sorting services offered by Royal Mail’s competitors.

The ‘downstream’ element – delivery – is provided on competitors’ behalf by Royal Mail, which is itself exempt from charging VAT on the services it supplies to customers.

Until now, VAT was required to be charged on the full cost of access arrangements with licensed operators. Non-exempt organisations have been able to offset that cost against their own VAT payments. But VAT-exempt organisations have not, making access arrangements – and the services offered by Royal Mail’s competitors – more expensive, in practice, for them.

Although Postcomm has welcomed today’s announcement, it remains concerned that there is not a ‘level playing field’ for licensed postal operators: Royal Mail is exempt from charging VAT, while other operators are required to charge the full 17.5%, making it harder for them to compete on cost for the business of VAT-exempt mailers. This is a significant barrier to postal market entry for new operators, particularly end-to-end operators, who make their own deliveries, and whose VAT liability remains unchanged.

Postcomm’s preferred solution would be a reduced, uniform rate of VAT, to be applied to all postal operators, including Royal Mail. For example, a 5% rate applied across the board would create a level playing field without resulting in significant price rises for customers.

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Postcomm launches review of Royal Mail's charges for 'final-mile' delivery

Posted by | Mar 23, 2007 | |

Postcomm, the UK postal services regulator, has launched a review of the charges Royal Mail imposes on other operators for access to its network and the delivery of mail over the so-called ‘final mile’.

Royal Mail and its biggest private competitor, TNT Post, have both requested changes to the margin between the price Royal Mail charges its customers for bulk mail deliveries and the amount it charges other operators for end delivery.

The former monopoly provider wants the margin narrowed, saying the 13 pence per item it is allowed to charge its competitors for providing final-mile delivery to homes and businesses is not enough to cover its costs.

It added it cannot compete fairly in the business mail market under the current price controls because any cut in its prices must be matched by a reduction in the amount it charges its rivals to use its network.

Competition is developing at a much faster pace than originally predicted, according to Royal Mail, with new entrants such as TNT Post and DHL securing about 25 pct of the bulk business mail market since it was opened on 1 January 2006.

TNT Post, however, said Royal Mail was attempting to ‘squeeze its competitors out of the market’ by requesting a reduction in the margin.

TNT Post said the limited margin protection currently in place made it difficult to invest in the infrastructure required to compete with Royal Mail.

Royal Mail has also called for an end of the cross-subsidy of stamped letters by business mail.

Stamp prices need to rise by 6 pence to a level that can realistically fund the Universal Service, which lost more than 200 mln stg in the last financial year, it said.

‘Because stamped mail is subsidised by business mail our business mail prices remain artificially high, which makes it easier for rivals to ‘cherry pick’ business customers,’ it said.

The review of Royal Mail’s pricing and service quality levels until 2010 will be completed within six months, Postcomm said.

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Online MBT comes to Palletforce

Posted by | Mar 23, 2007 | |

Online MBT, previously Mike Beer Transport, has joined the PalletFORCE palletised distribution network, as part of the Online Group’s commitment to providing its customers with the best possible service.

The Online Group added Mike Beer Transport to its network of transport centres just over a year ago and the recent change in name to Online MBT is designed to reinforce the Group’s identity as a provider of the most comprehensive range of products and services available in the industry. To complete the company’s integration into the Online Group, Online MBT has moved from Pall-Ex to the Group’s preferred pallet network, PalletFORCE.

Founded as Mike Beer Transport, Online MBT has over 25 years of experience in the haulage industry, and is ideally located within the Port Zone in Dover. The company’s expertise was most recently recognised at the 2005 Motor Transport Awards, when it won the coveted title of Haulier of the Year.

Palletised distribution has been a major growth area in road haulage over the last decade, offering a cost-effective solution to the quick delivery of small palletised consignments.

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Royal Mail and Remploy pilot scheme for disabled workers

Posted by | Mar 23, 2007 | |

A partnership between Royal Mail and Remploy – the provider of employment services for disabled people – is set for a national roll-out following a successful pilot programme in the South East.

Over the past year, 32 Remploy candidates with disabilities or health conditions have been employed as postal workers. Eleven are based at the Jubilee Mail Centre in Hounslow, while candidates have also been placed into administration, sorting office and delivery roles.

The scheme is now being extended to Essex, Chelmsford, Chiswick and Guildford, prior to a national roll-out in April.

Mike O’Donovan, mail centre manager at the Jubilee Mail Centre, said: “Many people’s perceptions of disability have been turned around by working with Remploy and it’s great to know that the partnership will now be rolled out nationally.”

This year, Remploy aims to find 5,600 jobs for people with disabilities and health conditions in mainstream employment.

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