Tag: Royal Mail

UK mail volume figures continue to decline

Posted by | Mar 28, 2008 | |

According to the latest figures, this is the third consecutive year of mail volume decline in the UK and is contributing to Royal Mail’s shrinkage.

According to Royal Mail, 5.03 billion items of direct mail were sent in the UK in 2006, a decline of 2.1pct in volume on the previous year. The UK addressed mail market was worth around GBP 6.8 billion in 2006/07. Mail volumes amounted to 21.9 billion items, down 2pct on the previous year. These figures included downstream access, all regulated and non-regulated mail, but excludes door-to-door and international.

Transactional mail volume estimates range anywhere from 6bn to 10bn items per year, this volume is estimated to be declining by around 2-3pct per year. This is due largely to businesses encouraging their customers to move physical bills and statements online.

In 2006/07, mail carried via access arrangements (both operator and customer direct access) accounted for 11.8pct of total mail volumes. This is an increase from 5.6pct in 2005/06.

Royal Mail’s financial performance for the year ended 25 March 2007 was weaker than in the previous year with operating profits (before exceptional items) for Royal Mail Letters’ business falling from GBP 344m to GBP 194m, caused by increasing costs, falling mail volumes and constant revenue. For the licensed area, Royal Mail recorded operating losses of GBP 29m in 2006/07 compared with profits of GBP 168m in 2005/066.

The USO remained profitable overall though less so than the previous year (operating profit was GBP 27 million compared with GBP 54 million in 2005/06) with profits from non-licensed mail weighing over 350g continuing to offset losses on licensed mail weighing 0-350g.

Postcomm has warned Royal Mail that it’s slow reaction to competition and lack of innovative ideas for the growth in the internet and ecommerce could be damaging.

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Postcomm: Royal Mail must transform for a healthier mail market (UK)

Posted by | Mar 27, 2008 | |

Postcomm has argued that fundamental reforms are essential if Royal Mail is to have a long-term sustainable future and the needs of all users of mail are to be met.

In its first submission to the independent panel reviewing the postal services market, Postcomm has highlighted the positive impact for customers since the addressed letters market was opened fully to competition over two years ago:
* Larger customers have enjoyed lower prices and increased innovation;
* Residential mail users have experienced record levels of service quality from Royal Mail; and
* Smaller businesses and public sector customers are also now beginning to reap the benefits of choice.

During this period, there have also been significant structural changes in the mail market that are directly linked to advances in technology and the increasing use of alternative forms of communication such as email and the internet. These changes pose challenges but they also create new opportunities. Royal Mail’s performance in rising to meet these new challenges has been disappointing.

Royal Mail continues to lag significantly in terms of investment, efficiency and substantial product innovation. Their recent focus has been on forestalling new entrants to the mail market and far less on adapting to these more far-reaching structural changes. This situation is unsustainable and unless addressed will result in accelerating decline.

Postcomm believes the future health of Royal Mail, the universal service, and the addressed letters market as a whole are inextricably linked. Decisions about fundamental reform have to be taken swiftly if Royal Mail is to lead a healthier mail market and provide a strong universal service.

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Decision on Four Post Office Branches

Posted by | Mar 27, 2008 | |

Post Office Ltd announced decisions on the future of four Post Office branches in the Network Change programme for Greater Glasgow, Central Scotland and Argyll & Bute.

The decision follows a six-week public consultation, which ended on 3 March, 2008.

The closures of Pollokshaws, 193 Shawbridge Street, Glasgow; University Stirling, The McRoberts Centre, University of Stirling; Clynder , Victoria Buildings, Helensburgh, and Westmuir Street, 8 Backcauseway, Glasgow, are confirmed today and they will close at the end of April at the earliest.

The four branches replaced four others which were originally proposed for closure as part of the Greater Glasgow, Central Scotland and Argyll & Bute Network Change Area Plan: Cultenhove in Stirling, Auchenback in Barrhead, and Kelvindale and Hyndland in Glasgow. They were withdrawn as a result of feedback received during consultation, which ended on 3 December 2007.

The four closures today means that a total of 44 branches will close under the Greater Glasgow, Central Scotland and Argyll & Bute Area Plan. Post Office services in the area will be provided through a network of 265 branches, including 3 outreach services through a mobile post office. This network supports the national accessibility criteria introduced by the UK Government and ensures that 99.9% of this area’s population will either see no change to their existing branch or will remain within one mile (by road distance) of an alternative branch.

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Royal Mail to close final salary pension fund

Posted by | Mar 27, 2008 | |

The Royal Mail said on Thursday that it would close its final salary pension scheme to new members from the end of this month.

The Royal Mail’s pension scheme is the UK’s largest corporate pension scheme by membership, with 45,000 members. But longer life expectancy and a sharp rise in pension costs has forced the state-owned postal group, which lost its 350 year monopoly on postal services in 2006, to close the scheme.

The proposal to close the pension scheme, which has a 5 billion pound deficit, to new members was initially bitterly opposed by workers and prompted them to strike, but was subsequently agreed with unions as part of a wider agreement on pay and modernisation.

From April 1 the pension scheme will move to benefits based on the average earned by employees during their career, rather than their final salary.

Royal Mail will launch a new defined contribution salary scheme in April 2009.

Postal workers will continue to take their pension from the age of 60 until April 1, 2010 when the retirement age will rise to 65.

After that date it will be possible for postal workers to draw a pension at the age of 60 on benefits they accrued before April 1, 2010 while continuing to work until they reach the maximum level of benefits, Royal Mail said.

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Pension changes to take effect after approval by Trustee

Posted by | Mar 27, 2008 | |

Royal Mail today confirmed that changes to its Pension Plan would take effect on April 1 following approval to amend the Plan from the Trustee. Earlier today, Royal Mail and the Trustee signed a deed of amendment which gives effect to the changes to the Plan.

The changes, which follow extensive talks with unions and employee representatives since last April, had also been agreed last year by both the CWU and Unite as part of wider agreements with each union on pay, modernisation and pension reform. A formal consultation period with all affected members closed on 16 January this year.

The key pension changes now agreed are:
• The Plan will close to new members from 31 March 2008.
• All pensions and benefits earned before 1 April 2008 will still be linked to final salary at the time of retirement.
• From 1 April 2008, benefits building up for employee members of the Plan will be earned on a Career Salary basis.
• New recruits joining the company after 31 March 2008 will be able to begin paying contributions to the new plan after they have worked for the company for a year.
• A new defined contribution plan will be launched in April 2009.
• Employees can continue to take their pension on reaching 60 but the normal retirement age will increase to 65 for benefits earned from 1 April 2010.
• From 1 April 2010 it will be possible to draw pension earned before the change to normal retirement age at 60, and continue working while still contributing into the Pension Plan until the maximum level of benefits has been reached.

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