Tag: UK

BCC: Postal competition necessary for businesses (UK)

Posted by | Dec 18, 2007 | |

Businesses deserve an ‘efficient and cost effective’ postal service and any review of the market must take this into account, it has been claimed.

The British Chambers of Commerce (BCC) made the comments in response to business secretary John Hutton’s announcement of a ‘comprehensive review’ of developments in the postal services market since its liberalisation two years ago.

The review will look at trends in future market developments and the likely impact on Royal Mail, other carriers and consumers.

Hutton said: “We believe that opening the market has brought considerable benefits for users of postal services but there can be no doubt that the market has evolved, with new technologies such as email and text messaging having a huge effect on the way we communicate.”

Responding to news of the review, Natalie Evans, head of policy at the BCC said:

“The business community deserves and depends upon an efficient and cost effective postal service.

“Frustratingly, the recent strike action at Royal Mail had a significant impact on businesses across the country, costing small and medium sized businesses an estimated GBP 2.5m in delayed post every day there was disruption.

Evans said competition in the industry was necessary to ensure business mail got delivered.

She added: “If Royal Mail cannot ensure final mile delivery, then choice must be allowed to flourish within the industry.”

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City postal workers begin strike (UK)

Posted by | Dec 18, 2007 | |

Postal workers in Staffordshire have gone on strike over the suspension of nine colleagues.

The industrial action at the Burslem depot in Stoke-on-Trent affects 32,000 homes and businesses in the ST6 post code and is due to finish on 2 January.

Royal Mail bosses and the Communication Workers Union (CWU) met on Monday in a last-ditch bid to avoid the walk out.

Royal Mail said 200 managers had been drafted in and it was “determined” to deliver the post in time for Christmas.

The dispute dates back to September when 12 members of staff were suspended over allegations of bullying and harassment. Three were later reinstated.

The union said calls for an independent review of the disciplinary action were not met by Royal Mail.

Managers said they were disappointed that strike action had gone ahead.

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Royal Mail review likely to prompt call for split

Posted by | Dec 17, 2007 | |

A wide-ranging review of the effect of competition on Royal Mail is expected to be announced today amid concerns that the group’s ability to provide a core service is being damaged.

However, the review is also likely to trigger strong pressure for a major revamp of Royal Mail, including splitting it in two.

As part of its licence to operate, Royal Mail must provide a universal service, meaning that post can be sent anywhere at a flat rate.

The postal group has asked Postcomm, the industry regulator, to modify this obligation to reflect its costs.

It has been unsuccessful in its request, although it has been allowed a series of stamp price rises.

In the review, rival postal operators, such as TNT and Business Post, are likely to be asked to help to fund Royal Mail’s universal service obligation.

John Grogan, the Labour MP for Selby, who has campaigned to keep full public ownership of Royal Mail, said: “If the private sector companies are strong enough, then I think they should make a contribution to the universal service.

The rival players are likely to resist such moves because they claim that they are disadvantaged by Royal Mail charging too much for them to use its infrastructure and also that Royal Mail is exempt from VAT while they have to charge it.

Instead they are expected to use the Government’s review to demand that Royal Mail’s operations are split up to promote more competition.

They want to see Royal Mail’s letters division, with which they compete, separated from its network operations, which they have to use for the final-mile delivery.

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Royal Mail response to Government review (UK)

Posted by | Dec 17, 2007 | |

Royal Mail is committed to maintaining a high quality, financially strong and sustainable postal service with the Universal Service Obligation at its heart, in line with the Postal Services Act and the EU’s Postal Services Directives.

The last few years have seen a huge change in the way in which people and businesses connect and communicate with each other and this is clearly having a major impact on the postal market.

We therefore welcome the decision by the Government to review the impact of liberalisation on UK postal services and trends in future markets development – and its likely impact on Royal Mail, alternative carriers and, most importantly, consumers.

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UK Ministers announce postal review

Posted by | Dec 17, 2007 | |

The Royal Mail’s 350-year monopoly ended at the start of 2006 when other licensed operators were given the right to collect and deliver mail.

Strike action by postal workers this summer damaged Royal Mail’s reputation.

Business Secretary John Hutton said retaining the universal postal service remained a “top priority”.

At the same, ministers announced that Royal Mail chairman Allan Leighton would have his contract extended by a year to March 2009.

Unions criticised Mr Leighton’s handling of a bitter pay dispute earlier this year which, although now resolved, is estimated to have cost Royal Mail more than GBP 200m.

There can be no doubt that the market has evolved with new technologies such as email and text messaging having a huge effect on the way we communicate

Although it has faced increased competition for two years, Royal Mail is still the dominant postal supplier in the UK, with a market share of more than 90 pct.

But the amount of mail it handles has fallen and social changes which have seen more people using email to communicate.

This is a crucial review which will help to shape the future of the postal sector

Terms of review

– Assess impact of market liberalisation
– Look at future market trends
– Consider how to maintain universal service

The review, led by former Ofcom deputy chairman Richard Hooper, will conclude next summer.

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