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Post Office workers stage fresh strike
Thousands of Post Office workers are today staging a pay strike, which comes after separate industrial action by postal workers was called off last week.
In the latest walkout to hit Britain’s postal service, staff employed at crown post office branches are striking after 5,500 members of the Communication Workers Union (CWU) rejected a two-year pay freeze proposed by the Post Office.
The union says that 465 crown post offices were affected last Monday 13th August.
A similar strike is also planned for Wednesday 15th August, with staff also disgruntled at plans to close 70 crown post office branches – main branches sited on the UK’s high streets – and transfer services to retailer WH Smith.
At the centre of the dispute are Royal Mail’s modernization plans, which union leaders claim will result in the loss of up to 40,000 jobs.
The CWU claimed last week that the plans involved “significant changes including later delivery start times and permanent reductions in customer services” and represented an “unnecessary attack on postal workers’ jobs, pay and conditions”.
However Royal Mail has said that the union is “ignoring the harsh commercial reality” of the UK postal market, which was recently opened up to full competition.
The postal services provider insists that modernization is necessary because it is losing business to rivals who have more efficient operations and lower prices.
Read MoreRoyal Mail mess
Horror stories about the state of Royal Mail abound. But there is a good chance that these tales are not circulating in the form of a letter, stamped and mailed at a post office. That loss of market share lies at the heart of Royal Mail’s problems: its operations are a shambles – not entirely its own fault – and the company is facing ever more competition it is not equipped to handle.
Good news, then, that after weeks of sporadic walkouts, the Communication Workers Union – a bastion of resistance to modernization – has called off further scheduled strikes and sat down with management to reach a deal for 130,000 employees.
In these negotiations, both sides need to understand the two kinds of competition Royal Mail faces: digital communication technologies and more digitized competitors.
Every day, Royal Mail sorts millions of letters by hand and rewards its staff handsomely for the trouble: on average, its employees earn 25 per cent more than their colleagues in private companies. But it is also 40 per cent less efficient than the automated competition.
Reforms need to come fast. Today, one in five letters is handled by competitors. These private delivery services mainly focus on profitable business such as large corporate delivery contracts. If Royal Mail does not modernise its operations soon, it will be left with only unprofitable parts of its operations.
Regulators need to give greater clarity about which aspects of the business they consider a public service. That should help Royal Mail to avoid cross-subsidizing its work as a utility with income from profitable units. Flexibility should extend to price-setting as well. Royal Mail needs to be able to raise prices in smaller steps and at greater frequency.
Read MoreE-mail overtakes print for marketing offerings
The volume of marketing offers sent by e-mail has overtaken print direct mail in the UK for the first time as companies exploit the low cost and other benefits of electronic campaigns.
The milestone highlights the challenge to Royal Mail and others with sizeable businesses charging for producing and delivering print direct mail when advertisers are reducing print volumes in the GBP 14bn-a-year industry.
Latest figures from the Direct Marketing Association estimate that in the fourth quarter of 2006, commercial e-mail volumes increased by 50 per cent year on year.
The electronic format was heavily adopted by retailers e-mailing vouchers in the run-up to Christmas and that is likely to be repeated this year.
Specialists questioned by the DMA predicted the volume of e-mail marketing would grow by another third.
Most marketers however believe a combination of print and online is the most effective approach, particularly as campaigns can be confused with spam, which is estimated to account for up to 90 per cent of internet traffic.
A new study from Royal Mail found customers prefer to receive both mail and e-mail in different contexts, and spend more if communicated with by both methods.
Read MoreDeath of the morning post for 60 pct of Britain
Almost two-thirds of homes and businesses will be condemned to afternoon deliveries under fiercely contentious Royal Mail plans.
The proposal, hidden away in a consultation paper, signals yet another downgrading of a once first-class postal service.
The Post Office has been accused of ‘attempting to charge first class prices while delivering a second class service’
Currently, 94.4 per cent of homes and businesses receive their mail before noon, with deliveries as early as 7am for many.
Under the new plan, no one would receive anything before 10.30am, while 60 per cent would have to wait until after midday.
The industry regulator Postcomm has indicated it supports the move, but there is still time for the public to make its voice heard before the consultation ends on August 28.
However, while the company is planning to phase in the changes before the Christmas rush, the directive does not come into force until January.
Royal Mail is under no legal obligation to ensure deliveries are made before noon even though research shows the overwhelming majority of consumers values such a target.
The consultation document says the plan would be to “shift the peak in residential deliveries between 10.30 am and 2 pm”.
An accompanying graph shows there will be no deliveries before 10.30am. Ten per cent would be delivered by 11am, a further 10 per cent by 11.30 am and a further 20 per cent by noon. The graph suggests the rest would arrive by 2.15 pm.
Royal Mail claims that maintaining the current scale of deliveries will cost GBP 280 million by 2009/10 and require an increase in the cost of stamps to pay for it.
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