THE PRICE of a first-class stamp will have to rise by up to 3p a year if the postal regulator presses ahead with “fast-track” plans to open the market to competition, Consignia warned yesterday.
In its formal response to Postcomm’s proposals, the state-owned postal service called for an immediate 1p rise in first and second class letter prices and a much more gradual introduction of competition.
NOTHING VENTURED, nothing gained. Consignia is pushing its luck in asking the postal regulator to allow it to raise postage prices immediately and hang on longer to its letter monopoly at the same time. Just to put the icing on the cake, it slipped out an increase in special delivery and parcel prices yesterday.
The Royal Mail needs a price increase, not because the universal service is about to collapse but because of its own rank inefficiency. By its own admission, costs are pounds 1.2bn too high. Its answer is to make the customer pay more. This would be cheeky at the best of times but it is quite breathtaking when the Royal Mail is failing to meet its target for next day delivery of first-class letters.
Postcomm ought really to send the posties away with a flea in their ear. Unfortunately, Allan Leighton, the Asda boss turned Consignia chairman, has done a sufficiently good job putting the wind up ministers with his dire warnings about what would happen to the one-price-goes-anywhere service that the regulator will probably relent.
Read MoreConsignia warned of stamp prices spiralling out of control as it repeated demands to increase the cost of a first-class stamp from 27p to 28p.
The Royal Mail operator said yesterday that it had no choice but to ask the regulator for an immediate increase to cope with the threat of new competition in the letters market.
But in its formal response to the regulator’s competition proposals, Consignia warned that this rise might not be enough to stave off a financial crisis caused by the ending of its monopoly.
Consignia is in talks to outsource maintenance of its buildings as part of its three-year plan to cut costs and return to profit, it was announced today.
The postal group said it was in talks with engineering group Balfour Beatty to conclude a partnership for its facilities management business Romec, which is responsible for day-to-day maintenance of its 3,000 buildings.
Under the deal, the pair would create a joint venture with Consignia owning a 51% share of the new business.
JERSEY Post may have an unfair advantage over competitors under the new Postal Law, according to the Island’s competition watchdog.
In particular, says the Jersey Competition Regulatory Authority (JCRA), the draft law could require rival operators to subsidise Jersey Post for doorstep mail deliveries.
The preliminary draft, released for consultation by the Industries Committee some weeks ago, outlines the steps to abolish States monopoly over postal services. The changes to the structure of Jersey Post will be similar to those proposed for Jersey Telecom, with a new private limited company taking over from the States Postal Committee.
Post & Parcel Magazine is our print publication, released 3 times a year. Packed with original content and thought-provoking features, Post & Parcel Magazine is a must-read for those who want the inside track on the industry.
