Royal Mail was fined £7.5m yesterday for missing targets on two of its business services, hours before a planned 24-hour strike by postal workers.
Postcomm, the industry’s regulator, said that the company’s performance on postage-paid services had failed its customers. The fine, one of the biggest handed out by a regulator, was described as “heavy” by the Royal Mail, which is losing £750,000 a day.
Read MoreRoyal Mail chief executive Adam Crozier has warned that this week’s 24 hour postal strike in London could cost the national carrier up to £10m.
Said Crozier: “Some of the London postcode areas are among the worst performing in the country. If Royal Mail is to hit its targets this current year then it’s vital that service in London improves. It is madness, therefore, for the union to inflict further financial damage through strike action.”
Read MoreRoyal Mail has introduced new compensation arrangements for customers.
The new compensation scheme gives customers 12 times the cost of First Class postage for First Class letters that arrive more than four working days after posting and for Second Class letters that arrive more than six working days after posting. Customers will be given £3.36 worth of postage in a book of First Class stamps. Business customers will get refunds on their postage bills if Royal Mail does not meet regulatory performance targets.
Read MoreFollowing consultation, Postcomm today set out the details of how Royal Mail should compensate its customers if their letters and packets are delayed in the post. Postcomm’s determination provides separate compensation schemes for businesses that use Royal Mail for bulk mailings, and for private customers. The bulk mail compensation scheme will come into effect for this financial year, linked to Royal Mail’s quality of service from April 2003. Compensation for private customers will operate from 1 January 2004. Business customers who send out bulk mailings will be compensated at the rate of 1% of their bills for each 1% that Royal Mail fails to meet national targets. The minimum payment will be at a shortfall of 1% and will increase by 0.1% increments up to a maximum of 5%.A separate scheme is proposed for domestic users who will be able to make a claim for delays to first or second class mail, Special Delivery
and standard parcels.
Union leaders are expected to call a second pay strike by postal workers in London, threatening further disruption to mail deliveries.
The executive of the Communication Workers Union is set to announce that thousands of postmen and women in the capital will walkout on October 16 to coincide with a stoppage by council workers involved in a separate row over pay.
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