Consignia’s deteriorating financial position left Postcomm with a dilemma. It could introduce competition slowly to allow managers to prepare by improving efficiency or it could speed up the process to give consumers more immediate alternatives if the historic problems of the Post Office proved intractable.
Read MoreThe UK’s postal regulator is set to throw open nearly a third of the Royal Mail’s market to competition in a move which will put £1.25bn of business at risk.
PostComm is expected to unveil a radical shake-up of the postal system at the end of the month which will result in rival operators being granted long-term contracts to compete with Consignia for 30 per cent of its monopoly business.
Read MoreThe editorial writers of the Financial Times have written that “if the Royal Mail, or Consignia as it now prefers to be known, provided a quality service, there would be little need to consider big changes this week in the market for delivering letters. Consignia does not provide such a service. It has failed to achieve its first-class mail delivery target in each of the past six years. Its 200,000 employees are responsible for more strikes than any other industry. It made its first operating loss last year….Consignia’s recent failures cannot be blamed on the gradual introduction of competition at the margins of its monopoly. And it is absurd to suggest that because Consignia is so bad, competition should be avoided.”
Read MoreIf the Royal Mail, or Consignia as it now prefers to be known, provided a quality service, there would be little need to consider big changes this week in the market for delivering letters.
Consignia does not provide such a service. It has failed to achieve its first-class mail delivery target in each of the past six years. Its 200,000 employees are responsible for more strikes than any other industry. It made its first operating loss last year. And the departure of Neville Bain as chairman has left a management vacuum, which the government, Consignia’s sole shareholder, has been slow to fill.
— Ananova has reported that “householders may have to wait until mid-afternoon to get their post delivered under cost-cutting plans being considered by the Royal Mail. The Royal Mail says it needs to make savings of £1.26bn a year and admits a series of reforms may need to be introduced to help them hit their targets. A spokesman for Consignia, formerly the Post Office which owns the Royal Mail, says prioritising deliveries so businesses receive their post before residential customers is one of the plans under consideration.”
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