Tag: Royal Mail

Splitting of Royal Mail operations proposed (UK)

Posted by | Jan 17, 2008 | |

Royal Mail’s postal operation could be split in two under proposals put forward by the postal regulator to increase competition and reduce the burden of regulation.

Postcomm has written to all postal operators, organisations representing mail users and Postwatch, the consumer watchdog, asking them for their views on five options for regulating the industry from 2010.

Two of the options involve the principle of “wholesale equivalence”, which would split Royal Mail’s collection arm from its delivery arm by creating separate business units. That would make it easier to eliminate cross-subsidies; ensuring competitors had equal access to Royal Mail’s network, which they rely on for final delivery to homes and businesses.

At present, equal access is ensured by regulating a range of Royal Mail prices, including what it charges competitors for final delivery. This means 77 per cent of the state-owned operator’s revenues are controlled by Postcomm – a split, it says, could reduce the proportion to as little as 15 per cent.

This would be similar to the approach adopted by Ofcom, the media regulator, to reduce the regulatory burden on BT by requiring it to separate its retail operation from Openreach, the wholesale arm that handles calls for other telecom companies.

Postcomm said a split was unlikely to be effective in creating a level playing field for competitors unless the two organisations were physically separated. The businesses would need different management incentives, for example, so that the delivery arm was encouraged to offer equal service to Royal Mail and competitors.

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The Slimming Down Of Royal Mail

Posted by | Jan 17, 2008 | |

As Postcomm examines the way in which deregulation of postal services in the UK is progressing, one proposal being considered is the splitting of Royal Mail’s collection and delivery service. All those involved in the postal business are being asked for their opinion in order that Postcomm can put together a workable plan for the next phase of deregulation.

Royal Mail still holds the monopoly on postal delivery in the UK and it seems likely that this will remain so in the future, but Postcomm is trying to ensure that competitors have equal access to Royal Mail’s delivery network wand at the same time reduce the amount of red tape which Royal Mail is currently governed by.

Certainly the postal market will continue to evolve – and not without problems either. Last year saw a bitter dispute between Royal Mail and its workforce over plans to restructure working hours, pay and conditions to enable it to compete and whilst some degree of victory was heralded by both sides, the changes at Royal Mail, like the entire postal market, are probably the tip of the iceberg.

Perhaps the concept of splitting Royal Mail would push it further towards privatisation but for the moment, there seems little appetite for a complete sell-off and all previous attempts to do so have been scuppered by back benchers and the unions. It would just upset too many people.

That said, the gradual changes are being seen by many as a stealth approach to a sell-off, gradually bringing Royal Mail to a position where there is no other way forward. At the moment, Royal Mail is a state owned postal service chaired by a man with commercial experience and radical ideas, but so far, Allan Leighton’s ideas to modernise the business are to some extent, being held back by regulation and a union-entrenched workforce. However, the gradual erosion of Royal Mail’s monopoly and with Postcomm now lowering the licence fee for smaller operators to a mere fifty quid, the CWU will find itself with less and less to hang on to.

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Postcomm consults on complaint handling and redress schemes for licensed postal operators (UK)

Posted by | Jan 17, 2008 | |

Postcomm has today launched consultations on:
– Complaint handling: Complaint handling standards for licensed postal operators. A consultation document and
– Redress schemes for licensed postal operators: Criteria for the approval of redress schemes in postal services
Under the Consumers, Estate Agents and Redress Act (“the CEAR Act”, given Royal Assent on 19 July 2007), Postcomm has a statutory duty to make regulations on complaint handling standards that would apply to all licensed operators. The act also allows for the Secretary of State for Business, Enterprise and Regulatory Reform to require regulated postal operators to belong to a Postcomm-approved redress scheme.
Today’s documents seek views on Postcomm’s proposals:
– for complaint handling standards, and
– on criteria for approval of redress schemes in postal services.

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Businesses failing to use their customer data could lose up to GBP 1.7 million each year (UK)

Posted by | Jan 17, 2008 | |

Businesses that fail to make effective use of their customer data could be losing out on up to GBP 1.7 million each year, a new study has concluded.

Research carried out by the Royal Mail found that around 70 per cent of direct marketing companies could expand their operations by as much as 30 per cent simply by investing in data quality systems.

Furthermore, around 90 per cent of the companies surveyed as part of the study feel that the majority of organisations fail to make best use of the data they possess when carrying out direct mail marketing campaigns.

Just 15 per cent of businesses currently have their customer data organised on orderly balance sheet, the Royal Mail research also revealed.

Earlier this week, the chief executive of Proximity, Amanda Phillips, told PrecisionMarketing.com that direct mail marketing growth was at its strongest level for a number of years, with many businesses now seeing the advantages of high data quality.

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Business Post says UK Mail Q3 revenues up 60 pct (UK)

Posted by | Jan 16, 2008 | |

Parcel carrier Business Post Group PLC said third-quarter revenues in its growing mail business lifted 60 pct over a year earlier as it announced group trading in line with expectations.

Business Post, which is challenging state-owned postal carrier Royal Mail, said its mail operation, UK Mail, won significant contracts with new customers including MBNA and Norwich Union in the period.

“With these new contracts, we now handle some 10 pct of all mail collected in the UK,” the group said in a trading statement.

Business Post said group revenues between Oct 1 and Dec 31 increased 13 pct over a year earlier. Underlying group revenues in the period lifted by 20 pct, excluding revenues from a contract with FedEx terminated in April last year.

Underlying parcels revenues in the period were up 6 pct on last year and the group said it continued to see good growth in its business-to-business parcels operations, which represent around 80 pct of parcels revenues.

In its business-to-consumer operations, which represents 15 pct of the parcels business, its period-on-period performance was consistent with the first half.

Revenues in its specialist services business for the period were in line with last year.
“We have achieved a good revenue performance during the third quarter, trading performance is in line with management expectations and overall the board expects good progress for the year,” the group said in its statement.

Business Post will report preliminary results for the year ended Mar 31, 2008, on May 21.

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