email from Paul Jackson: I hadn’t heard the statistic quoted by Roger Higginson at our recent meeting that 77% of the UK mail is below 50gms. I assume it was the UK or was it the EU? Is this a confidential figure?
Response from David Robottom: It was an EU statistic. The volume below 50g within UK is a great deal smaller than 77%. It is a matter of public record and came from CTCON’s research for the commission a few years ago.
Postcomm chief executive Martin Stanley today welcomed the access agreement between Royal Mail and TPG Post UK Ltd under which Royal Mail will deliver post ‘the final mile’ for the Dutch company. Mr Stanley said: “This is another significant step forward for competition in the UK postal market, and a sign that the industry is growing increasingly confident that the access arrangements, driven by Postcomm, will deliver benefits to the customer. We expect other deals to follow.”
Read MoreDeutsche Post’s Royal Mail deal first of many
Read MoreDeutsche Post, the German mail delivery company, has moved further into the UK business market by agreeing terms to use Royal Mail’s delivery network. The move breaks months of deadlock and avoids the need for Postcomm, the postal regulator, to step in to set a price. Terms of the agreement, expected to be approved formally by the Royal Mail board early this month, are the same as those announced in February between the Royal Mail and the UK Mail arm of Business Post, its private sector rival. Royal Mail will deliver post collected and sorted by Deutsche Post. The German company will pay 13p for letters fully sorted by one of Royal Mail’s 1,450 delivery offices and 13.375p if items are only sorted by postcode.
Read MoreSurvey recommends speeding-up postal competition
A survey commissioned by Postcomm into the non-residential postal market and attitudes to the introduction of competition could have important implications for Postcomm’s plans for the next stage of market opening.
The survey found that business customers were generally not well informed about competition and most had not approached or been approached by a potential new operator. But a third of the companies would consider switching some or all of their mail to new entrants. It concludes that Postcomm should consider speeding-up the introduction of full competition.
Postcomm chairman, Nigel Stapleton said:
“It is disappointing – but not perhaps surprising — that almost 18 months into the first stage of a UK competitive mail market, Royal Mail still has more than 99% of the letters business.
“With Royal Mail back in profit and customer service suffering, we see additional reasons for ensuring competition bites. The commission will look very hard at the survey’s recommendations that we speed up the introduction of competition in postal services, before we issue our competitive market review in September.”
Postcomm commissioned the survey, by consultants Roland Berger, as part of its forthcoming competitive market review. The company contacted more than 500 business mailers, some of whom spend more than £500,000 a year on postage.
Among its recommendations the survey says:
Postcomm should consider full market opening earlier than April 2007
If earlier full market opening is not possible, in 2005 Postcomm should open the business-to-business market segment in preference to reducing the volume threshold on bulk mail as planned
Postcomm should work towards uniform conditions for all entrants – including reviewing Royal Mail’s VAT exemption
Access by operators to Royal Mail’s downstream network should be promoted as a reliable alternative to full end-to-end coverage.
Roland Berger interviewed a total sample of 549 customers as shown in the table:
Segment Definition (by mail expenditure pa) Number of interviews Volume
Top 500 Greater than £500K 56 76.57%
Large £200K to £500K 253 20.93
Medium £30K to £200K 94 1.94%
Small £10K to £30K 146 0.56%
Total 549 100%
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