Tag: Mail Services

Royal Mail review likely to prompt call for split

Posted by | Dec 17, 2007 | |

A wide-ranging review of the effect of competition on Royal Mail is expected to be announced today amid concerns that the group’s ability to provide a core service is being damaged.

However, the review is also likely to trigger strong pressure for a major revamp of Royal Mail, including splitting it in two.

As part of its licence to operate, Royal Mail must provide a universal service, meaning that post can be sent anywhere at a flat rate.

The postal group has asked Postcomm, the industry regulator, to modify this obligation to reflect its costs.

It has been unsuccessful in its request, although it has been allowed a series of stamp price rises.

In the review, rival postal operators, such as TNT and Business Post, are likely to be asked to help to fund Royal Mail’s universal service obligation.

John Grogan, the Labour MP for Selby, who has campaigned to keep full public ownership of Royal Mail, said: “If the private sector companies are strong enough, then I think they should make a contribution to the universal service.

The rival players are likely to resist such moves because they claim that they are disadvantaged by Royal Mail charging too much for them to use its infrastructure and also that Royal Mail is exempt from VAT while they have to charge it.

Instead they are expected to use the Government’s review to demand that Royal Mail’s operations are split up to promote more competition.

They want to see Royal Mail’s letters division, with which they compete, separated from its network operations, which they have to use for the final-mile delivery.

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Royal Mail response to Government review (UK)

Posted by | Dec 17, 2007 | |

Royal Mail is committed to maintaining a high quality, financially strong and sustainable postal service with the Universal Service Obligation at its heart, in line with the Postal Services Act and the EU’s Postal Services Directives.

The last few years have seen a huge change in the way in which people and businesses connect and communicate with each other and this is clearly having a major impact on the postal market.

We therefore welcome the decision by the Government to review the impact of liberalisation on UK postal services and trends in future markets development – and its likely impact on Royal Mail, alternative carriers and, most importantly, consumers.

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UK Ministers announce postal review

Posted by | Dec 17, 2007 | |

The Royal Mail’s 350-year monopoly ended at the start of 2006 when other licensed operators were given the right to collect and deliver mail.

Strike action by postal workers this summer damaged Royal Mail’s reputation.

Business Secretary John Hutton said retaining the universal postal service remained a “top priority”.

At the same, ministers announced that Royal Mail chairman Allan Leighton would have his contract extended by a year to March 2009.

Unions criticised Mr Leighton’s handling of a bitter pay dispute earlier this year which, although now resolved, is estimated to have cost Royal Mail more than GBP 200m.

There can be no doubt that the market has evolved with new technologies such as email and text messaging having a huge effect on the way we communicate

Although it has faced increased competition for two years, Royal Mail is still the dominant postal supplier in the UK, with a market share of more than 90 pct.

But the amount of mail it handles has fallen and social changes which have seen more people using email to communicate.

This is a crucial review which will help to shape the future of the postal sector

Terms of review

– Assess impact of market liberalisation
– Look at future market trends
– Consider how to maintain universal service

The review, led by former Ofcom deputy chairman Richard Hooper, will conclude next summer.

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Postcomm welcomes Government review of postal market (UK)

Posted by | Dec 17, 2007 | |

Postcomm, the independent regulator for postal services, welcomes the Government’s review of the UK postal services market, which was announced earlier today.

Postcomm looks forward to cooperating fully with the review which comes at a time of profound change for the market. The regulator’s official submission to the review will be published in due course, but is likely to consider:

– how to put Royal Mail in the best position to increase its efficiency and its flexibility to meet the changing needs of customers and to sustain a universal service which must evolve in the light of social and technological changes;
– how to ensure that new operators are able to offer customers a choice of innovative new services, on a level playing field with Royal Mail (including the same treatment under the VAT regime); and
– the need to allow the regulatory regime to evolve with the changing market and for Postcomm to step back wherever the market is effective in ensuring value for money and choice for customers.

Postcomm chairman Nigel Stapleton said:

“We are pleased the Government’s review will cover all aspects of the market and of Royal Mail’s structure and performance. The forward looking approach can ensure the public continues to benefit from an evolving universal service it values and the market develops to provide innovative, efficient and reliable services that meet the needs of all users.”

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New Research Shows Consumers Value Direct Mail, But Misunderstand Its Environmental Impact

Posted by | Dec 17, 2007 | |

A new survey reveals that consumers value much of the direct mail they receive, but they also dramatically misperceive its true environmental impact. The findings suggest that industry efforts to educate the public will yield an improved perception of mail’s environmental footprint. The survey of 1,000 adults in the US was commissioned by Pitney Bowes and DMNews.

Consistent with other industry studies, consumers in this survey place a high value on the coupons and catalogs they receive in the mail. Mail also helps consumers start and maintain relationships with businesses and nonprofits, with 44 percent of respondents making their first purchase from a business and 33 percent making their first donation to a nonprofit because of a mail piece.

The survey found that negative perceptions of mail’s environmental impact are based on widespread public misunderstandings. For example, only 2 percent of Americans correctly guessed that mail makes up just 2 percent of the nation’s municipal waste, while an astonishing 48 percent believe that mail is half of the content in the nation’s landfills.

Americans also believe, that mail delivery is a major contributor to carbon dioxide emissions. The truth is that mail delivery falls well below many other daily activities in its carbon footprint, such as taking a shower or using household appliances.

The survey suggests that public education will enhance consumer perception of direct mail. For example, more than 70 pct of respondents said it would improve their view of mail if marketers used address correcting software to minimize undeliverable mail. “This is already a widespread practice in the industry, and is highly effective at reducing waste in the mailstream,” said Critelli. “We need to make this more visible to consumers so they understand how our interests converge with theirs.”

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