Tag: Royal Mail

Royal Mail heading for first national strike in a decade

Posted by | May 12, 2007 | |

Britain is heading for its first national postal strike in more than a decade after pay talks broke down between Royal Mail and its unions.
The Communications Workers Union announced yesterday that a ballot for industrial action would go ahead after it formally rejected a 2.5 per cent pay offer from Royal Mail linked to further efficiency gains. The union fears that Royal Mail is planning up to 40,000 job losses.
The CWU will serve notice of its intention to ballot its 130,000 members in Royal Mail on Tuesday and despatch ballot papers a week later. The result is due to be announced on 7 June. The last national postal strike was in 1996.
Royal Mail executives said the union’s pay claim was “clearly madness and not in our view justified in any way”. The company said that the claim for a 27 per cent increase coupled with a reduction in the working week would cost it GBP 1bn a year at a time when its profits had shrunk to just GBP 22m for the first six months and the UK mail market was declining by 2.3 per cent a year.
Royal Mail also claimed that its staff were paid 35 per cent more than those working for rival postal companies, if pension benefits were taken into account, while productivity within the state-owned organisation was 40 per cent lower than that of its competitors.
The company said it did not believe the pay claim would be supported by customers or taxpayers. “The union must also realise that the consequences of meeting its demands would be hugely negative for Royal Mail’s competitiveness and would result in further large job losses as well as the loss of vital contracts and revenue.”

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Sharp suit with an iron hand in a woolly glove

Posted by | May 11, 2007 | |

The Guardian photographer is trying to make Adam Crozier relax. He tells him to loosen his shoulders and Crozier, sitting stiffly and gripping a Royal Mail mug, makes an effort to shrug a little. The photographer asks him to stand. “If you can get your back against the wall,” he says. Crozier does as he is told and looks like he is facing a firing squad.

I had first met Crozier some 12 years earlier, on the day he and Tamara Ingram were named joint chief executives of the advertising agency Saatchi & Saatchi. Maurice and Charles Saatchi had just walked out and taken most of the senior staff and some of the biggest clients with them. Crozier was just 31 and looked even younger. The more energetic Ingram did much of the talking. Against the odds, they held the business together. She went on to carve out a successful career in advertising and now manages the USD 1bn Proctor & Gamble advertising account. But Crozier was the one to step further into the public eye. He was chairman of the Football Association at 36 and chief executive of the Royal Mail by 39.

It is an odd career path on paper – Crozier admits with a laugh that his CV might suggest he is someone who doesn’t know quite what he wants to do. But there are common threads. Each has involved periods of painful upheaval. A business studies student might call it change management. Each of them has also been high profile – he was a familiar fixture behind former England coach Sven-Goran Eriksson during FA press conferences – but still the spotlight makes him shudder. “I hate it,” he says in his soft Scottish accent. “Absolutely hate it. The bizarre thing about the last three jobs I’ve done is that I don’t like [the public profile] at all. I will go to enormous lengths not to do public things – because it is just not me.”

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Royal Mail fears exodus

Posted by | May 11, 2007 | |

The exodus of big business from the Royal Mail could see as many as one in five letters being handled by competitors such as Dutch group TNT and the UK Mail arm of courier group Business Post, it has emerged.

Senior Royal Mail executive Stephen Agar has admitted latest figures show that about 12.5% of the post was lost to the competition last year.

But with major customers continuing to ditch the Royal Mail at alarming rates, Agar said that figure could rise to 20%.

The defection of companies with major bulk billing operations to Royal Mail’s rivals has become increasingly embarrassing for the former state postal monopoly.

Earlier this year, the £8m-a-year BBC TV licensing operation took its postal needs to UK Mail, following an earlier decision by the Department of Works and Pensions to switch its £12m-a-year contract to the same operator.

That followed the decisions, recently revealed by the Evening Standard, of BT and British Gas group Centrica to move to TNT for their mail needs, together worth GBP 150m over three years.

Most of the mobile phone companies, banks and utilities have also decided to quit Royal Mail, citing price and quality of service.

Royal Mail chief executive Adam Crozier, pictured, today defended the business’s ability to handle competition.

‘We’ve gone through the process [of market liberalisation] that BT went through over 25 years,’ he said. ‘We’ve concertinaed it into three.’

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GLS ups profits, eyes Europe, express growth

Posted by | May 10, 2007 | |

GLS, Royal Mail’s European parcels company, again grew rapidly last year and is planning to expand in Southern Europe and broaden its portfolio with more express services, according to CEO Rico Back.

In 2006, the parcel logistics operator increased revenues by 8.7% to EUR 1,595 million and improved its operating profit (EBITA) by 15.4% to EUR 179.4 million, he told the German transport newspaper DVZ in an interview. Volumes grew by 6.9%, including an increase of 20.1% in cross-border shipments.

In the financial year ending March 31, 2006, GLS increased operating profits by 37% to GBP 100 million (EUR 146.8 million), its revenues rose 13.6% to GBP 1,037 million (EUR 1,522.6 million), and volumes grew 14% to 293 million parcels. GLS said in May 2006 that it aimed for turnover of EUR 1.6 billion in 2006/07.

Back said that he aimed to strengthen GLS’ business in Italy and Spain this year. In Italy, the operator is currently represented through a franchisee. Back recently told German media that GLS is in talks to acquire a Spanish company. A start-up business is planned in Romania.

The GLS chief executive also said that the operator planned to expand its express services this year but did not provide any further details. GLS launched a small air express operation last autumn, linking Germany and the UK, and said that this would be extended to more European countries.

Back told the DVZ that GLS had no plans to enter the German mail market once it was liberalised due to the dominance of Deutsche Post and mail substitution by electronic communications. “There is no growth there. That is why the mail market is unattractive really,” he said.

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UK savers are base rate losers

Posted by | May 10, 2007 | |

As interest rates hit 5.5 per cent, the Post Office® reveals that savers are missing out on millions of pounds in interest by sticking with accounts that fail to pass on rate increases.

The savers failing to benefit from the full 1.00 per cent increase in rates in the last year are customers of some of the biggest banks and building societies on the high street.

The Post Office® announces that its Instant Saver rate will rise to 5.75 per cent1 from 4 June 2007. Instant Saver customers will also benefit for even longer by a promise to pass on base rate rises in full until January 2010. This makes Post Office® Instant Saver the UK’s best instant access savings account.2

Savings rates paid by banks and building societies can quickly become uncompetitive when base rates increase. For example, a balance of GBP 5,000 held in a typical instant access high street savings account3 would lose out on GBP 145.00 in interest payments in the first year compared to an identical balance in a Post Office® Instant Saver account. For balances of GBP 10,000 or GBP 25,000 losses rise to GBP 276.00 and GBP 660.00 respectively.

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