Tag: Postwatch

Concerns over Universal Postal Service

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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Mail competition is 'no benefit' (UK)

Posted by | May 6, 2008 | |

The liberalisation of the UK postal service has produced “no significant benefits” for either households or small businesses, a report has said.

That is the initial finding of an independent review of the UK postal sector commissioned by the government.

It warned there was now a threat to the Royal Mail’s financial stability.

The independent panel warned that the “substantial threat” to the Royal Mail’s financial security threatened the universal service – the collection and delivery to all UK addresses.

Maintaining the universal service is at the heart of this review – ensuring collection from pillar boxes and post offices and delivery to all addresses

As a result, the independent panel – which will produce its full report in the summer – said the continuing “status quo is not tenable”.

While the initial report said homes and small firms had not gained from the increased competition, it said large companies had “seen clear benefits from liberalisation – choice, lower prices and more assurance about the quality of the mail service”.

It says these large firms have benefited from the big growth in competition in the bulk mail sector – postal firms that collect, sort and transport bulk mail before handing it over to the Royal Mail for the final delivery.

Yet at the same time, the report found that the Royal Mail still had “virtually no competition” in the delivery of addressed letters over the “final mile” to letterboxes.

The core problem for the Royal Mail is that while it has lost business in the lucrative bulk mail collection and sorting market, it still has to uphold the universal mail delivery service, which struggles to make a profit.

The Royal Mail and regulator Postcomm have both declined to comment on the initial report.

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UK Competition in Delivery

Posted by | Apr 17, 2008 | |

Postcomm is seeking views on potential barriers to competition in delivery, the so-called ‘final mile’ in the UK postal sector.

As part of the regulator’s forward work plan it is assessing the potential benefits of delivery competition, particularly in ensuring a healthy universal service and supporting a range of reliable, innovative and efficient postal services, including a universal service reflecting the needs of users, valued by customers, and delivered through a successful Royal Mail and a sustainable competitive market.

While competition through access agreements has developed quickly since Royal Mail negotiated the first such agreement in 2004, competition in delivery has actually declined for the last two years.

Postcomm has already identified a number of possible barriers, and the regulator is seeking views on new and emerging issues affecting the growth of competition in delivery.

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Postcomm publishes final proposals on Royal Mail's compensation schemes

Posted by | Apr 1, 2008 | |

Postcomm, the independent regulator for postal services, has announced it is minded to accept Royal Mail’s proposed changes to its retail compensation arrangements for lost, damaged and delayed mail.

The regulator has conducted a public consultation and worked closely with Royal Mail and Postwatch to address concerns about the complexity of Royal Mail’s current compensation schemes for retail customers and some inconsistency in how they are applied.

The key changes to the retail compensation arrangements for loss, damage and delay are:

– if the item was posted with Royal Mail, there will be compensation for loss, damage and delay where an item has no intrinsic value or where a claimant cannot provide proof of posting;
– loss and damage to items with an intrinsic value, with proof of posting with Royal Mail and proof of value, will entitle customers to a postage refund plus compensation for actual loss;
– the GBP 5 and GBP 10 payments for delay and substantial delay will be removed, except for Special Delivery Next Day;
– compensation for delayed retail mail will become payable one day earlier than at present;
– redirected mail will be eligible for compensation for delay; and
– users of the Articles for the Blind service will be able to claim compensation for loss, damage and delay.

Postcomm will decide whether to remove the bulk compensation scheme from regulation when it makes a final decision on Royal Mail’s application for suspension of the scheme and the so-called “C-factor” in 2007-08 due to industrial action arising from its transformation plan.

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Government review – Postwatch initial response (UK)

Posted by | Mar 31, 2008 | |

Postwatch has submitted its answers to the first 19 questions posed by the independent review panel appointed by the Government.

The review panel’s terms of reference are to:

• assess the impacts to date of liberalization of the UK postal services market, including on the Royal Mail, alternative carriers and consumers;

• explore trends in future market development and the likely impact of these on Royal Mail, alternative carriers and consumers; and

• consider how to maintain the universal service obligation in the light of trends and market developments identified.

In her covering letter Millie Banerjee CBE, Chair of Postwatch, made the following points:

• The review is timely and welcome.

• Royal Mail has a dominant influence on the future of the UK’s postal industry. Postwatch is encouraged that Royal Mail acknowledges the need both for a far greater customer focus and for a fundamental change in its internal culture. Postwatch believes these to be huge tasks that will require little less than a revolution in Royal Mail’s thinking and approach.

• The needs and interests of its customers must be factored in at every point of Royal Mail’s transformation plan.

• Declining mail volumes are a major challenge but must not be used an excuse for declining customer service and lack of investment. Instead Royal Mail should be reinvigorating the mail market to make it an attractive medium for advertising and fulfilment delivery.

• A financially healthy, customer focused, efficient Royal Mail is required if the UK’s postal industry is to thrive. Postcomm, as economic regulator, must ensure that its regime provides real incentives for this to happen.

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