Tag: Royal Mail

Nationwide post service could end as Royal Mail faces finance crisis (UK)

The Royal Mail could become incapable of maintaining its commitment to delivering a UK-wide price structure for its letter and parcel service, says a government-commissioned review.
At the same time, competition in postal services has delivered no benefits for domestic consumers and small businesses, according to the review set up to advise John Hutton, the Business Secretary.
Details of severe financial pressure facing the organisation have emerged just a year after it received a GBP 3.9 billion government rescue package. Royal Mail has a GBP 3.4 billion pension deficit and last year its profits fell by a third to GBP 223 million.
The review, which will make final recommendations later in the year, said that Royal Mail’s finances are so precarious that they could derail its obligation to the universal service, which allows stamped mail to go anywhere in the country for the same price.
The review was led by Richard Hooper, a former deputy chairman of Ofcom, the communications industry regulator. It criticises the Royal Mail for being slow to modernise and also cautions that modernisation in the future will be more difficult because of a decline in the letters market.
Domestic consumers and small businesses have failed to win any of the advantages from the liberalisation of the market that have been enjoyed by big business, the review says. While large businesses have secured better rates and service from Royal Mail and rivals, stamp price rises and fewer services have affected households and small companies.
Postcomm, the regulator, gave warning that the review that “without extensive change, the Royal Mail’s business model will become unsustainable”. If there are no significant changes at the organisation, the regulator envisaged negative cash flow of GBP 400 million a year by 2012.

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The privatisation of the Post Office was bound to fail. Like New Labour, it was a triumph of free-market dogma over common sense
Is this a red letter day for Royal Mail? The independent report commissioned by business minister John (“let’s celebrate the rich”) Hutton concluded that privatisation threatens services and brings no benefit to customers.
The creeping commercialisation of postal services is an example of free market dogma triumphing over common sense, creating disillusionment in politics and a growing sense of the loss of social fabric in our communities. It is hitting and hurting Labour in elections as the most vulnerable are left more isolated by closures. And what is more, it makes Gordon Brown’s job of establishing a clear sense of Britishness that much harder, when his policies undermine the status and standing of an institutions that goes a long way to deterring what it means to belong to this nation. So what has the last 10 years been all about?
What has happened to the Royal Mail serves as a symbol for all that is wrong with New Labour. Once you decide that economic efficiency is the means by which you deliver social justice, then the market become master of society. Blairism was built on the notion that the private sector is always more efficient than its public counterpart. To thrive in a global economy and reap the rewards required, the walls between what is private and what is public have to be knocked down. And with big business like TNT lobbying like mad to get into the profits, modernisation only meant the market.
The Tories wanted to privatise the Post Office and were stopped in their tracks for the only time by a clever union campaign that chimed with public concern. New Labour has deftly sidestepped a full-on confrontation and has instead bled the Royal Mail dry of funds while salami slicing the public ethos of this important institution.
The Post Office and our communities are now paying the price in under-investment, closures and the break-up of the service. But there is resistance and it’s not just from the good campaigning work of the post office union the CWU. Campaigns are being run across the country to save services with councils getting in on the act to prop them up. And it’s not even as if going into a post office is any fun. My local office is a misery of long queues and shelves of tatty stationery and cheap DVDs that never made it to general release. The management should be taken to task. But still we hanker for it. Because largely it works. Because it is a point of connection in our communities. Because letters and parcels are precious and we know from our experience of the like of the banks and BT that service in the private sector is often infuriatingly terrible.
Social institutions like the post office matter. They are the places in which values reside and can thrive. The Royal Mail is no bastion of socialism. But it is about universalism, equality, access and public ethos.
As such it serves a purpose to bind our society together. In these fractious and anxious times we should be celebrating such an important institution that builds society – unlike the market that weakens it.
Gordon Brown has said he is in listening mode. Perhaps we should all send him a letter calling on him to keep the Post Office public and invest in it – making its sustainability a litmus test of his ability to change.

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Royal Mail encourages e-retail best practice with delivery promise tool

Royal Mail has launched a new consultancy tool to help online retailers make sure they offer consumers the best possible experience and reduce shopping basket abandonment.

The internet based ‘Delivery Promise Tool’ can analyse any e-retail website, monitoring the quality and availability of delivery information such as cost, time, tracking, delivery options and contact details. It produces a detailed report which includes recommendations on how each website can improve its service.

Royal Mail created the tool after its Delivery Experience research revealed the importance that consumers place on having access to clear delivery information before placing an order online.

The research revealed that 19 in 20 online shoppers have abandoned a shopping basket, 37 per cent regularly, and that four in ten (42 per cent) did so because of the delivery charge.

The creation of the Delivery Promise Tool follows Royal Mail’s launch of two new services to improve the delivery experience for shoppers. Royal Mail Tracked enables retailers to provide their customers with a tracking number when the goods ordered are dispatched so that the shopper can track the progress of the delivery themselves. And the Safeplace service also gives shoppers the opportunity to specify a safe, alternative delivery point, such as a shed, porch or neighbour, should they not be at home to receive the item.

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Mail competition is 'no benefit' (UK)

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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