Tag: Royal Mail

Royal Mail cuts may end Saturday post

Posted by | May 10, 2008 | |

The proposal to reduce deliveries to five days a week will also see fewer first class letters arrive the day after they are sent.

The recommendations, to be submitted in the next 10 days as part of a review into the future of the postal sector, are included in a radical plan by the regulator Postcomm to shore up finances at the Royal Mail.

It hopes to secure the future of the “universal service”, which means the company promises to deliver letters to each of the 28 million add-resses in Britain for the same price.

Moving from a six-days-a-week delivery would mark a further reduction of services by Royal Mail, which has already been allowed to end twice-daily deliveries in an effort to restore profitability.

The average delivery time has slipped and post boxes are no longer emptied on a Sunday. Any attempt to drop the Saturday delivery would be fiercely opposed, not least because it is enshrined in law under the Postal Services Act of 2000. Politicians, consumer groups, businesses and the unions say Postcomm’s proposals would lead to a further diminution of the service.

It is the first time that the Royal Mail has ever made a loss from this service.
Postcomm’s recommendations about cutting the six-day service are included in its submission to the review, the Telegraph understands.

The regulator also suggests that the Royal Mail’s delivery targets should be lowered.

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First class war for Business Post's Guy Buswell

Posted by | May 10, 2008 | |

Tucked away in one of Guy Buswell’s depots are 12 pillar boxes. Standard Royal Mail design but painted blue. For Buswell is a private postman and the pillar boxes may one day be part of his expansion plans. For the moment, however, they confirm the conclusion of last week’s report from former Ofcom regulator Richard Hooper that the private consumer has seen no benefit from introducing competition to postal services.

Buswell is chief executive of Business Post, which collects letters from the likes of Vodafone and HSBC, sorts them and hands them to the Royal Mail for delivery. His UK Mail subsidiary handles more than 10 per cent of Britain’s post but, as yet, the public cannot give him letters for posting.

On the wall of his office, on an industrial estate outside Birmingham, above one of his 57 depots, is the very first envelope he delivered. It was from Powergen, posted on May 10 2004, and commemorates the end of the 370-year postal monopoly.

UK Mail now delivers more than 2bn letters a year. “Last week we carried 12m items in one day,” boasts Buswell, 46. It is arguably Britain’s biggest private mail service (the argument would come from TNT, the Dutch post office) and this week he will announce plans to change the quoted Business Post name to UK Mail Group.

Just 50 big customers account for 40 per cent of Britain’s post and Buswell has signed up a fair share, including Abbey, Prudential, Carphone Warehouse, Lloyds TSB and Royal Bank of Scotland. Yet sending letters is a shrinking business.

He blames Royal Mail, whose universal service last week posted its first loss in the year to March – a GBP 100m shortfall.

“We can collect mail from any customer that has 200 items per night. In the future there will be pillar boxes – or collection points,” he says. For now, however, he is working on I-mail, which will allow anyone to e-mail a letter to UK Mail for hand delivery next day.

Why not e-mail it directly to the recipient? Buswell points out that legal addresses are not electronic addresses. I-mail will be launched this summer and the consummate salesman explains: “It massively reduces the carbon footprint and reduces time. It will cost between 40p and 50p and be a next-day service.”

But its importance, he states, “is that it will be innovation in the mail industry by a competitor.”

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Royal Mail calls for end to price controls after profits collapse (UK)

Posted by | May 9, 2008 | |

An interim report from the Government-commissioned review of the deregulation of mail services in 2006 warned this week that only large businesses were benefiting from competition and that the statutory requirement on Royal Mail to offer daily deliveries to every address in the UK would cause it substantial financial problems.

Despite Mr Crozier’s warning, Postcomm, the industry regulator, pointed out that Royal Mail had already been allowed to raise the cost of stamps ahead of inflation and said it believed the current level of price controls governing the company was appropriate.

However, Royal Mail is currently most taxed about the regulation of its services to larger businesses, where it now faces significant competition from around 20 rival suppliers. While the company is free to set prices for services in this area as it sees fit, it has to offer the same price to all businesses on each of its tariffs. It is also required to offer rival services access to its delivery network, at a cost fixed in relation to the charges it makes its own customers.

Mr Crozier believes these restrictions reduce the competitiveness of the business services offered through Royal Mail Letters, undermining the company’s ability to subsidise the universal service.

The Government’s review of deregulation is due to conclude later this year but has already said the status quo should not be allowed to continue.

Nevertheless, relaxation of regulation of Royal Mail is likely to be stiffly contested by both Postcomm and the company’s commercial rivals, such as UK Post and TNT, which are facing similar market pressures. The overall size of the mail market in the UK is declining as the internet replaces both personal and business mail. More people pay bills online or by direct debit, and businesses have moved away from direct mailshot activities towards online marketing.

While Royal Mail’s rivals now collect and sort a fifth of all mail in the UK – before paying Royal Mail to deliver much of it – they insist they still need protection from the former monopoly.

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Stamps Increasing by one cent on May 12 (U.S)

Posted by | May 9, 2008 | |

The price for a one-ounce First-Class stamp will increase from 41 to 42 cents on May 12.
Prices for other mailing services, such as Standard Mail, Periodicals, Package Services (including single-piece Parcel Post), and Special Services will also change (see chart below). The average increase by class of mail is at or below the rate of inflation as measured by the Consumer Price Index.
“The Postal Service developed the Forever Stamp for consumers to ease the transition during price changes,” said Postmaster General John Potter. “We encourage Americans to buy Forever Stamps now for 41 cents, because like the name suggests, they are good forever.” The price goes up to 42 cents on May 12.
The Postal Service has sold 5 billion Forever Stamps since the launch last April and plans to have an additional 5 billion in stock to meet the expected demand before the May price change.
Consistent with a new law, prices for mailing services will be adjusted annually each May. The Postal Service plans to provide 90 days’ notice before the price changes each year.
New prices for shipping services, including Express Mail and Priority Mail, will be announced in March. Prices for all postal products and services are available at usps.com/prices.

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Royal Mail Group delivers robust financial results in the face of many challenges in the year ended 30 March 2008

Posted by | May 8, 2008 | |

• Group external revenue of GBP 9,388million, up 2.3pct

• Group operating profit before exceptionals of GBP 162million, down 30.4pct

• Royal Mail Letters recorded a loss of GBP 3million due to a sharp decline in mail volumes, the continuing impact of full competition and increased levels of investment

• The Universal Service made an estimated loss – for the first time – of around GBP 100million with the overall price controlled area of Royal Mail’s business making a loss of around GBP 200million

• GLS and Parcelforce Worldwide saw a significant rise in revenues, with profits remaining constant due to increased, volume-driven costs and competitive pressures

• Post Office Limited recorded an overall loss of GBP 34million, this was an improvement due to the full year impact of the Social Network Payment

• Landmark agreements on pay, pensions and modernisation

• Cash contribution by the Company to Pension Plan of more than GBP 800million

Commenting on these results Adam Crozier, Royal Mail Group’s Chief Executive, said:

The results are dominated by the profit fall in the Letters business where overall market volumes have declined by 3.2pct year on year in line with other major European postal markets. Royal Mail Letters is handling three million fewer letters a day than a year ago, and revenues have fallen further as customers down-trade to lower priced products and rivals handle increasing volumes. The company is also continuing to pay huge sums into the Royal Mail Pension Plan – more than GBP 800million in cash last year. A key achievement of last year, however, was to put in place and agree with a strategy to modernise and transform the Letters business with heavy investment in our people and technology that will deliver efficiencies and provide the platform for new and more flexible products for customers – alongside the agreement on major pension reform which took effect on 1 April 2008.

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