The industry has yet to feel the full force of postal deregulation. But there is no doubt that a liberalised market is good news for direct marketers as the main players compete to offer cost savings, quality and flexible services.
Read MorePostwatch is gearing up for another legal battle against Royal Mail, after vowing to fight the operator’s appeal against the High Court judgment which last year found it guilty of breaching its own compensation scheme. The watchdog claims Royal Mail knows it is set to lose again, but wants to keep the GBP40m it owes disgruntled bulk mailers in the bank in order for it to gain interest. The appeal process will not reach court for several months. Postwatch brought the original judicial review against industry regulator Postcomm when Royal Mail withheld around GBP40m-worth of compensation from companies, after failing all 15 of its minimum service targets in 2003 and 2004. Bulk mail customers should have received compensation totalling GBP80m automatically, but Royal Mail used late invoice payments as a reason to withhold 50 per cent. Judge Justice Sullivan ruled that Royal Mail should pay its customers the GBP40m owed. A Postwatch spokesman explains: “As far as we’re concerned, this appeal is a delaying tactic. We’ve already won this case once, and we’re very confident we will win it again.”
Read MoreUK Government departments are being told to stop sending letters via the Royal Mail because it does not offer the same value for money as its rivals, despite its huge subsidies. The Government wants to cut GBP30 million from the cost of delivering post and is urging departments and councils to consider using one of the eight private-sector suppliers. The news comes two weeks after the Royal Mail said the Government had given it GBP1.75 billion in emergency help to plug its pension fund deficit and pay for modernisation. The pressure to abandon the Royal Mail is coming from the Office of Government Commerce (OGC), which negotiates business deals on behalf of Whitehall. The man responsible for negotiating with the Royal Mail has told the Treasury Select Committee that the discussions had been “not as fruitful as I would have liked”. Hugh Barrett, the chief executive of OGCbuying.solutions, said: “It is a commercial decision for the Royal Mail to make as to how far they want to lower their prices in response to competition. That is established policy. We are taking advantage of the deregulated market to get the very best deal for taxpayers in that marketplace.”
Read MoreJohn Modd, Director, Mail, Triangle Management Services
World Mail Review 2006
News that the Government is giving Royal Mail GBP1.7bn – on top of the recent price control – to update its service and get its pension fund back on track has irked many. But the watchdogs are firmly on-side. The Government’s decision to hand out GPB1.7bn to Royal Mail has been met with fury from competing postal operators. TNT Post UK chief executive Nick Wells has branded it “murky”, adding: “The game’s not being played on a fair playing field and I’d like to know where the referee is.” Opposition parties have also hit out at the move. But what do direct marketers think? One industry source claims Royal Mail is having its cake and eating it: “Postcomm’s recent price control was very generous – we assumed it was set on the basis that there wasn’t going to be any Government aid. For Royal Mail to receive both seems very one-sided.”
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