Are we doomed??

[tramssirhc]

Letters have always been subsidised.

How do you work that out?

By the universal service obligation, that's why it costs the same to send a letter to the Orkneys as it does to send one round the corner, the profit on the 'easy' work subsidised the more expensive.

Its more of a cross subsidy than an explicit subsidy. One needs the other and vice versa.

[hero22]

Anyone else absolute fed up now of every single time there’s a dispute or revisions and the likes whenever it gets resolved under the banner of “this deal will save the company and us all” before we even get into the next year you have the Union or the business or both preparing us for the next

It’s like they want us to work under constant fear

Everytime you think ok I can settle now with some security Martin Walsh or whoever is straight in with the next big thing we have to worry about

It’s mentally draining

It’s like every single year there’s SOME sort of drama

Vote YES to rebuild RM and secure our future
Vote YES for DM26

Then as soon as whatever it is is voted in we are told “oh btw in two years time this doomsday scenario will likely happen unless….”


Didn’t mention much of RM going under in 2028 when asking for our YES vote a few months back funnily enough

Just like Government and all big corporations, the profits keep rolling in as long as we are constantly living in fear.
We are run by the worst of humanity

[steve1873]

If what MW says is correct then RM will be bankrupt in 5 years time unless the Government decides to outlaw owner drivers, given that seems pretty unlikely then why on earth would DK spend £3B of his own money buying a company heading for bankruptcy in just a few years?

If RM is in much poor financial shape then why is it paying it's CEO a £7m annual salary and it's owner a £114 payment for loan fees?

He knows/thinks he can break up RM and franchise the s**t out of RM and eventually undercut everybody else to get those £££ rolling in.
We all know he would love to do this right now if he could...he is playing the medium/long game.

Plus the added bonus of our RMPP cash balance will do nicely.

Can he though? Remember the government hold a "golden share" in the company and whether he likes it or not, Royal Mail is still seen as an essential part of the UK's infrastructure.

[postslippete]

Probably because new contracts or renewal of contracts with customers are being priced more competitively
due to the competition with the other couriers. (Race to the Bottom) So to win contracts you price yourself lower which results in less revenue but more parcels to deliver.

That's fine but if RM are deciding to accept lower margins to remain competitive, why should the solution be another round of pressure on the frontline workforce? If anything the business should be looking at its pricing strategy and the profitability of the contracts that it wins plus also its investment decisions and other overheads.

Our labour isn't the only cost

[reddevils]

That's fine but if RM are deciding to accept lower margins to remain competitive, why should the solution be another round of pressure on the frontline workforce? If anything the business should be looking at its pricing strategy and the profitability of the contracts that it wins plus also its investment decisions and other overheads.

Our labour isn't the only cost
[/quote]

Unfortunately in the modern hyper capitalist world we live in there are only two things business leaders know what to do, cut costs of labour and increase workload and responsibilities onto the workers after you cut these costs.

This is not just Royal Mail, every sector in the UK this is happening. They expect workers to work more for less pay and poorer terms and conditions, including inferior pension schemes if you are lucky to get one.

Added to this the introduction of new technology, with a.i tracking and surveillance to get the last ounce of sweat out of you, the world of work is frankly dystopian. Technology isn't helping us, it exploits us.

So why should the solution be another round of pressure of the frontline workforce? I
t shouldn't but it is the only way they know to increase profits.

The world of business used to pride itself on innovation and new products. They would pride themselves on staff training, career progression and celebrated long serving employees. This is from a bygone era.

Royal Mail just copies its competitors without any ideas of its own. Taking photographs of parcels, cutting callers times, DPR Routes, monitoring vans using trimbles and pdas and now parcel lockers and parcel shops are just some of what Royal Mail have introduced long after their competitors.

That is what is scary. Royal Mail doesn't innovate, they simply copy. If they continue down this path to replicate the industry competitors as they have been doing then it all leads to a bogus self employment nightmare as we have already discussed.

[Tman]

Letters have always been subsidised.

How do you work that out?

Read a few books. I know my own history. Letters have always required cross subsidy.

OK, let's try again, "Letters have always required (cross) subsidy" from what or whom?

[reddevils]

OK, let's try again, "Letters have always required (cross) subsidy" from what or whom?
[/quote]

Like somebody has already posted the USO is a form of subsidy so that letters can be sent for the same price to anywhere within the UK .Sending a letter to an island in Scotland is more costly due to transport, fuel costs etc and the address may be physically difficult and time consuming to get to at final delivery. Compare this to a letter being sent to a terraced street in London. The high density area will produce a more of a profit to subsidise the more difficult, less profitable locations.
Even though they are the same price to post a letter, one is much more costly than the other.

It depends on what your definition of cross subsidy is.

It can be argued now due to the falling volumes of mail and lack of profitability from them that parcels are cross subsidising the mail.

[ted_e_bear]

Letters have always been subsidised.

How do you work that out?

Read a few books. I know my own history. Letters have always required cross subsidy.

OK, let's try again, "Letters have always required (cross) subsidy" from what or whom?

From the more profitable parts of the business for example bulk postings to densely populated areas that cost loads less to deliver than say sending a 2nd class letter to an outlying Scottish island where it's probably at a loss, see above reply

[Tman]

That's how the principle of "one price to any part of the UK" has always worked, but that's a far cry from "letters have always been subsidised" which was the OP's odd claim.
Letters generated substantial profits for decades, and neither needed nor received any subsidies.

[reddevils]

He means that 'one price to any part of the uk' is a cross subsidy.

There is no direct subsidy from the government. The cross subsidy is how the USO functions as explained.

I think this is just a language problem.

[Mr Rush]

It can be argued now due to the falling volumes of mail and lack of profitability from them that parcels are cross subsidising the mail.

Per the 2017/18 annual report:

• Revenue was £4,152m letters to £3,463m parcels (p21), a 55:45 ratio (p16).
• Volume was 14.3bn versus 1.1bn (p22)
• That's £0.34/unit for letters against £0.32/unit for parcels

By 2021/22:

• Revenue was £3,714m letters to £4,800m parcels (p65), 44:56 (p66).
• Volumes were 8bn and 1.5bn (p65)
• That's £0.46/unit for letters and £0.31/unit for parcels

The revenue split flipped only on account of letters almost halving in that timeframe, and arguably the unit revenue from parcels has fallen with inflation. Revenue is not profit, though. Proportionally, a parcel is more expensive to handle than a letter (especially when you haven't externalised all your costs onto an pseudo-self-employed workforce) and DSA is certainly responsible for letter revenue being as low as it is.

Logistically, increasing parcel volumes will be unlikely to scale as well as letters did at their peak. While me might get a few years of industrial calm with DM26, eventually these pressures will resurface and it'll be back to strife because of the unavoidable problem of the cheaters, I mean competitors.

[reddevils]

The fact is could Royal Mail sustain itself just by delivery of letters. Would the Uso be functional? No.

Is the USO now dependent on parcels revenue? I would argue yes so in essence there is a cross subsidy going on.

I would like to see this years annual report of letters/ parcels revenue and proportion.

Personally I find it sad, I would much rather deliver mail than parcels.