TNT Post UK expected to trial delivery service in London

[TrueBlueTerrier]

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Private sector postmen wearing orange could be taking to the streets of London from April, as one of Royal Mail’s biggest postal rivals launches a new trial delivery service.

TNT Post UK, part of the Dutch postal company PostNL, is itching to break Royal Mail’s near-monopoly of the end-to-end delivery market.

It is now expected to follow up a 2009 trial in Liverpool with a new trial in the British capital from the week of April 16.

Although the UK’s postal market opened up to competition at the start of 2006, virtually all private sector entrants still use Royal Mail for the final mile of delivery. For mail collected and delivered by the same company, Royal Mail holds more than 99% of the market share.

The major barrier to companies challenging Royal Mail’s stranglehold on the end-to-end market has been that as the universal service provider, its services have been exempt from value-added tax, while others have to levy the 20% sales tax on customers.

TNT Post UK, which describes itself as the second biggest UK postal company, has been lobbying hard against Royal Mail’s VAT advantages, and some of those exemptions for business services are ending from April.

“Exploring trials”

Sources close to the company have told Post&Parcel that they are now moving ahead with plans for a trial to be run in London from April.

Officially a company press spokesperson could not confirm or deny the London project was going ahead, but stressed that UK VAT rules still need to be changed if TNT Post UK is to run “comprehensive” end-to-end services. Such a move would also require sign-off by regulator Ofcom.

Regarding the London trial, spokesperson Eimear Galvin would only say: “TNT Post has a clear intention to launch an end-to-end delivery service and we would like to do this as soon as possible. We are currently reviewing plans on how we can further trial the service following the conclusion of a successful small-scale trial in Liverpool.”

The spokesperson would not reveal further details about the trial, but confirmed that as with the Liverpool trial, delivery people would be put out on the streets in the orange TNT Post branding.

The London location would suggest TNT Post is looking into services in mainly urban areas where profitability would be highest, but asked whether its trials might involve rural areas as well, Galvin said: “We are exploring the possibility of trials in various types of location.”

Similarly, asked on what grounds a TNT Post end-to-end service might compete with Royal Mail, for example on price grounds, delivery speed or reliability, the TNT Post spokesperson said various models for trialling end-to-end services were currently being considered.

TNT Post UK currently handles more than 200m items a month, on behalf of businesses including telecoms giant BT and energy utility Centrica, and has been delivering mail since 2004.

It currently claims a market share in the addressed mail segment of around 17%, which it has built up with a regional approach to its network, which comprises offices and depots in Scotland, the North of England, the Midlands, London and the South East and the South West, along with Northern Ireland.

Royal Mail is currently in the process of re-launching its bulk mail services as it seeks to shore up market share while raising prices to cover its universal service and need to modernise. It is launching a new simplified service portfolio in April.

Ofcom

Separately, the UK postal industry regulator Ofcom issued a formal direction today extending Royal Mail’s get-out clause for difficult addresses in relation to its universal service obligation to deliver to every address in the UK.

The exceptions mean that if it is not possible for Royal Mail to deliver mail to the door or collect mail from a certain post box, for example for health and safety reasons, it can refuse.

The new direction essentially changed little other than the details in the document related to Ofcom taking over regulatory responsibility for the market in October 2011 in place of Postcomm.

But, it extends the exceptions through to 31 December 2013.

[DGP1]

This will be fun, if it even happens then they'll do there normal and throw them everywhere and if they come back to us then do we charge people to deliver it or even return it?

[POSTMAN]

Will move this to blue shirts for a while,discuss...

[bedfordrl]

Do they have the same right of entry as us?

[clashcityrocker]

This is just total bollocks.
They did a trial in Liverpool in 2009 and it must have been so successful they waited 3 years before having another trial in London.
Perhaps in 3 years they will begin another trial in .........

And Vodafone will be trialling public phone boxes in.........

Total bollocks.

[NWpostie]

They won't be doing residentials it will be all businesses and factories anywhere with a big drop, the rest will be given to us DSA.

[Lounge Lizard]

This is just total bollocks.
They did a trial in Liverpool in 2009 and it must have been so successful they waited 3 years before having another trial in London.
Perhaps in 3 years they will begin another trial in .........

And Vodafone will be trialling public phone boxes in.........

Total bollocks.

Indeed, but all publicity's good publicity, and newspapers, especially on a quiet news day, are glad to receive their annual "launches a new trial delivery service in ......" 'story'.
And Daily Mail readers will then think to themselves 'Oh, that's good, TNT will probably offer us all a Second Class mail service at less than the 55p Royal Mail are planning to charge'.

[maisymoo04]

am a postman in the trial area were they say has worked hahaha dont make me laff.i was chattin to one ov them on his orange post bike ,what a joke.told me he meets a 7.5 tonner at 930 at his start point ,driver gives him a tray with around 50 letters in then off he goes.has 3-4 letters for each road around his walk ,finishes at 1045 then puts the rest threw our system items couldnt deliver.said he has never met managment and was told do what you can over the phone.i thort our company was bad to work for

[Indy]

The single most interesting thing about this will be the pay and conditions of the "OPG's" they employ.

Anyone know who large the trial is likely to be in terms of number of delivery people?

The playing field has to be level so they'll get the same access the same parking rules etc etc as RM get.

[Royal_Fail]

They will cherry pick the profitable routes just like before and dump the stuff they don't want to deliver on us

[Lounge Lizard]

am a postman in the trial area were they say has worked hahaha dont make me laff.i was chattin to one ov them on his orange post bike ,what a joke.told me he meets a 7.5 tonner at 930 at his start point ,driver gives him a tray with around 50 letters in then off he goes.has 3-4 letters for each road around his walk ,finishes at 1045 then puts the rest threw our system items couldnt deliver.said he has never met managment and was told do what you can over the phone.i thort our company was bad to work for

So 50 letters delivered in 75 minutes. How low must their pay be for that to be profitable ?

[justdeno]

What then happens if they do deliver to households, and the address has a redirection/keepsafe, do RM get the complaint, as we always do(doorstepped items etc) or do the public have to pay all the rival comps for these extra services?

[Lounge Lizard]

What then happens if they do deliver to households, and the address has a redirection/keepsafe, do RM get the complaint, as we always do(doorstepped items etc) or do the public have to pay all the rival comps for these extra services?

This would only be a real problem if TNT deliveries were ever to extend beyond a 'trial', but that's most unlikely.
50 letters delivered in 75 minutes on a wage of £6 an hour works out at 15p each, no cheaper than them handing them to Royal Mail as DSA, and dropping bundles of 50 letters off with individual TNT posties would be a lot dearer than dumping many thousands of them at a time off at one of our Mail Centres.
These 'trials' are just for show and to get some cheap publicity.

[Darren Bent]

It wouldn't work due to low numbers. and uneconomical.

But if they ever do get much bigger, royal mail post delivery person's walk would be lot easier with 15% less mail to deliver.

[Indy]

What then happens if they do deliver to households, and the address has a redirection/keepsafe?

would be no different to using the no "junk mail" service. Both companies would get the redirection request and implement on the mail that they receive. The customer might have to pay a bit more or RM would have to share the redirection revenue. Np problem peeps