Tag: Royal Mail

Post Office Outreach Funding To Be Examined

Posted by | Aug 17, 2008 | |

Following concerns by the Business and Enterprise Committee, the National Audit Office is to begin a detailed analysis of the financial support available for UK post office outreach services. The Committee is concerned that outreach services which are already replacing many rural post offices, would ultimately fail through lack of funding.

The Committee demanded clarification on the relationship between Post Office Ltd and Royal Mail as well as Royal Mail’s service expectations from Post Office Ltd, plus a detailed breakdown of exactly how Royal Mail determines the cost of such services against the actual costs as delivered by Post Office Ltd.

Alan Cook, managing director of Post Office Ltd, told the Committee that Royal Mail paid Post Office Ltd, which then paid subpostmasters for the work they did. The arrangement is somewhat unique in that Post Office Ltd is a subsiduary of Royal Mail yet is unable to raise its prices to combat growing costs.

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Postcomm statement on Royal Mail's industry consultation on zonal access price structures (UK)

Posted by | Aug 14, 2008 | |

Postcomm welcomes Royal Mail’s industry consultation on a revised zonal access price structure. This consultation impacts on two projects which Postcomm has been undertaking over the past several months.

The first project is Postcomm’s general review of zonal access pricing (under which Royal Mail charges a zonal price for delivering mail to the “final mile” for large customers and other postal operators).

The second project concerns TNT Post UK Limited’s request to Postcomm for a direction under Condition 9 of Royal Mail’s licence for two access products, both of which it requested to be zonally priced but with a two zone pricing structure.

Postcomm hopes that Royal Mail, TNT Post and the wider industry will be able to work together to put in place appropriate terms for both zonally priced access and nationally priced access to the Royal Mail network. If agreed, these new arrangements could help to secure the provision of a strong and self financed universal service in parallel with the development and sustainability of both access and end-to-end competition.

Postcomm will aim to publish its observations on Royal Mail’s industry consultation by the end of August 2008.

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Sub-postmasters' 'morale so low' – concerned MSP (UK)

Posted by | Aug 13, 2008 | |

North east of Scotland MSP Nanette Milne has voiced fears that more Post Office branches could shut in the future after the current 2,500 closure programme consultation ends.

It follows the announcement by Post Office Ltd last week that 40 Post Office branches would close.

Dr Milne said: “I have real concern as to what the Labour Government intends to do with Post Offices in the future. Speaking to sub-postmasters the North east it is clear that morale has never been so low…”

“The Business and Enterprise Select Committee, Chairman Peter Luff MP has said there could be a further 4,000 closures, mainly if sub-postmasters retired and were not replaced, and that there could be no compulsion to replace sub-postmasters who retire.

“A recent report by the Business and Enterprise Select Committee noted that the Post Office had estimated a network of around 7,500 would meet the national criteria for access to branches, although Government funding and the company’s business case were both based on the number of outlets remaining at 11,500 after the current closure programme is completed.”

She added: “I do not think it is satisfactory simply to accept that the network may continue to shrink in an unplanned way between now and 2011. Post Office Ltd should be obliged to use its best endeavours to keep the network at a minimum of 11,500 fixed outlets.

“The future shape of the network is a matter of direct political concern and the Labour Government must take ultimate responsibility for ensuring its considerable subsidies are being used to secure a network which meets the public’s needs.”

Dr Milne also commented on the Post Office Card Account contract, which is currently up for tender, with the result of who will run the contract in future, expected this summer.

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A postal sector focused on the future

Posted by | Aug 12, 2008 | |

International postal services are moving resolutely towards the future, declared Edouard Dayan, Director General of the Universal Postal Union, at the close of the 24th Universal Postal Congress, which ended its three weeks of discussions today.

“From Bucharest to Geneva, the whole tone has changed. Four years ago, an air of pessimism hung around the future of postal services” said Dayan. “Today, our agenda includes e-commerce, technological development, intelligent mail, facilitation of international trade and exchanges, electronic money transfers, sustainable development, international cooperation, postal infrastructure at the service of development policies, and development – rather than downsizing – of the universal service”. At the closing session of Congress, the Director General also described the many faces of a sector which is active on all fronts of the global economy, in the face of burgeoning new technologies and the growth of globalization and international trade.

Aside from the elections, Congress also examined 300 proposals and resolutions relating to the structure of the UPU, its mission and finances, and to international exchanges of letters, parcels and money transfers between postal operators the world over. In terms of operations, for example, minimum security standards and processes for postal operators will be drawn up, and Posts are invited to work more closely with customs authorities to identify counterfeit or pirated articles sent through the mail.

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Royal Mail USO needs funding says Lawson

Posted by | Aug 12, 2008 | |

Steve Lawson, editor for Hellmail the postal industry news site said it was ‘highly probable’ that Royal Mail would have to consider reducing the frequency of its deliveries or cutting back on some of its services if fuel costs continue to remain high and more business was lost to rivals.

“Royal Mail is providing a very expensive service whilst continuing to lose market share” he said.

“Raising stamp prices to meet increased costs isn’t something that Royal Mail is able to do at will either, and often there’s a real lag between pricing and operating costs which puts Royal Mail at a real disadvantage. Present stamp prices are fixed until 2010 but that doesn’t take into account the sharp increase in diesel prices.”

“Royal Mail wants to provide the best service it can, as indeed do postal workers themselves, but the business is under huge pressure from Postcomm to reduce its operating costs. The six day a week service is an expensive one to provide, as is the universal service which guarantees a minimum collection and delivery service even to areas that are incredibly costly to provide. Sending a postman into the back of beyond to deliver a 34p letter isn’t exactly profitable. Add declining mail volume as well as business lost to rivals, and it becomes fairly obvious that maintaining such a high level of service is an enormous task. I doubt its sustainable unless stamp pricing becomes more flexible. It seems highly probable that some key part of its service will go.”

“There needs to be a fixed funding for the USO if Royal Mail is to be able to compete on fair terms but no decision has been made on who should pay for it in the longer term. Postcomm has already said that it isn’t keen to share that cost between operators as that would effectively undo its own efforts to help stimulate competition. Postwatch too, suggested some contribution from all postal operators but to date, it remains unresolved and it wouldn’t surprise me in the least if Royal Mail reports an even bigger loss on the USO this year. Its not an issue we can ignore.”

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