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Time to ditch the DSA agreement.

28 Jun 2020, 13:13

With the recent announcement that we are now losing money hand over fist is it not about time we finished the DSA agreement and once again retained the full price for our delivery services. Lets be honest the DSA was supposed to help other companies set up and start their own service. That is simply never going to happen whilst they can ride on our backs. Now post Brexit as well.
RM seem to have forgotten all this, its never mentioned and they are trying to save money by cutting costs and jobs from within.

Time to ditch the DSA agreement.

28 Jun 2020, 13:18

Yes it needs to go. Asap. Should be easy enough why is it the German and Dutch postal services have so much influence over ours. It's a disgrace

Time to ditch the DSA agreement.

28 Jun 2020, 13:34

Isn't DSA something that was imposed on us under some EU competition directives?

Not sure how beneficial it would be to regain that work now anyway given that we've been gradually removing our various WSM machines that we paid millions of pounds for in the first place

Time to ditch the DSA agreement.

28 Jun 2020, 13:36

Munchboii wrote:Yes it needs to go. Asap. Should be easy enough why is it the German and Dutch postal services have so much influence over ours. It's a disgrace

You’ll have to convince the regulator over that. DSA was introduced to bring choice to the bulk posters in the market I’m not sure why other postal operators would have an influence over ours.

Time to ditch the DSA agreement.

28 Jun 2020, 13:46

Approximately 65% of letter volume is DSA.
Royal Mail no longer has the capacity to deal with that 65%.
The business has actually made a great deal of money by reducing that capacity and selling off the relevant real estate.

What they certainly don't want to do is re-invest in what is by all accounts a dying revenue stream.

And no, DSA was not imposed on us by the EU, "fair competition" was imposed on us by the EU. The way it was implemented is the fault of successive governments and Royal Mail boards. Very few EU countries have opened up their postal markets in such a self destructive manner. We're special.

Time to ditch the DSA agreement.

28 Jun 2020, 14:23

wacko74 wrote:Isn't DSA something that was imposed on us under some EU competition directives?

Not sure how beneficial it would be to regain that work now anyway given that we've been gradually removing our various WSM machines that we paid millions of pounds for in the first place

Wouldn't make any difference as DSA enters the network at the Inward MC who will either sequence the mech letters or one of their MPUs would. I don't think there'll be any MPUs left by the end of the year.

Time to ditch the DSA agreement.

28 Jun 2020, 14:45

When there is no profit in Handling DSA Items , the companies involved will simply close that side of there business

Time to ditch the DSA agreement.

28 Jun 2020, 14:53

wallan wrote:When there is no profit in Handling DSA Items , the companies involved will simply close that side of there business


What they'll do first is swallow each other up and go for economy of scale.

Eventually they'll just be one shark left in the tank and it might eat us last.

Time to ditch the DSA agreement.

28 Jun 2020, 15:07

Direct mail advertising is always going to be a thing let's be honest. One way or another whether its 3 or 5 days a week royal mail will still exist

Time to ditch the DSA agreement.

28 Jun 2020, 15:13

Agreed , when it comes to Collection & Outward Processing , when it comes Inward Processing & Deliveries No

Time to ditch the DSA agreement.

28 Jun 2020, 15:41

From day one of privatisation the top people should have made their number one aim to charge the going rate for delivering the DSA mail that is still the case as there is no chance of anyone else delivering the service we have to.

Time to ditch the DSA agreement.

28 Jun 2020, 15:49

We do charge "the going rate".

The problem is the going rate isn't very much and if you increase the going rate what happens is the companies that send the stuff out look for other options.

It's not the DSA companies that drive what we can charge them, it's what they can charge their customers.

Time to ditch the DSA agreement.

28 Jun 2020, 16:01

This is how it works.

The DSA companies can charge less than we can because their systems are completely automated and what staff they do have are poorly paid compared to us.

As the DSA companies are already running on tight margins they cannot afford to absorb any increase in what we charge them without passing it on to their customers.

If they increase the cost to customers with the letters market and economy so fragile what will inevitably happen is a lot of these customers will look at other options like online billing, appointments and advertising because you're making it look less attractive to send out physical letters.
Instead of driving up our revenue you're actually driving it down.

In order for us to take back this kind of business in house and be competitive we would have to invest in the kind of fully automated cut price operation the existing DSA companies have and that would almost certainly be a separate business with a second tier workforce.

Be careful what you wish for.

Time to ditch the DSA agreement.

28 Jun 2020, 22:58

Woody Guthrie wrote:Approximately 65% of letter volume is DSA.
Royal Mail no longer has the capacity to deal with that 65%.
The business has actually made a great deal of money by reducing that capacity and selling off the relevant real estate.

What they certainly don't want to do is re-invest in what is by all accounts a dying revenue stream.

And no, DSA was not imposed on us by the EU, "fair competition" was imposed on us by the EU. The way it was implemented is the fault of successive governments and Royal Mail boards. Very few EU countries have opened up their postal markets in such a self destructive manner. We're special.

As I understand the way DSA works the other companies just collect the letters then drop them at the nearest RM MC. So its not a case of capacity as we already do the majority of the work involved. They just undercut us on the contracts. Its like the supermarkets selling stock for less than its worth or diddling their suppliers.
The major difference, or discrepancy, is that we do the majority of the work but receive only half of the revenue. As a direct result our prices have had to rise exponentially over many years which has made us even more uncompetitive in certain categories of mail.

Time to ditch the DSA agreement.

28 Jun 2020, 23:12

It's not just letters and flats that go DSA. Next time in your DOs if you're on the primary packet crash, just take a look at the amount of packets that are coming through as DSA

Time to ditch the DSA agreement.

29 Jun 2020, 06:52

Woody Guthrie wrote:This is how it works.

The DSA companies can charge less than we can because their systems are completely automated and what staff they do have are poorly paid compared to us.

As the DSA companies are already running on tight margins they cannot afford to absorb any increase in what we charge them without passing it on to their customers.

If they increase the cost to customers with the letters market and economy so fragile what will inevitably happen is a lot of these customers will look at other options like online billing, appointments and advertising because you're making it look less attractive to send out physical letters.
Instead of driving up our revenue you're actually driving it down.

In order for us to take back this kind of business in house and be competitive we would have to invest in the kind of fully automated cut price operation the existing DSA companies have and that would almost certainly be a separate business with a second tier workforce.

Be careful what you wish for.


I'm not sure I'd agree that the margins are so tight that the ''junk mail'' industry would simply cease to exist if mailing costs were even slightly increased.

I know someone who worked in marketing for a bank and they once told me that they needed less than 2% ''customer uptake'' from whatever they were offering in any given mailshot for it to be a profitable exercise.

I suspect that 2% figure applies across the board for all the usual junk mail suspects... Cotton Traders, Easylife, Chums, Sky, BT etc etc

You only have to look at the huge numbers of customers who pull their face and chuck their various catalogues and brochures straight in the bin without even looking at them and yet STILL these companies keep sending this stuff out to them despite getting no custom from them for years to see that these junk mail companies couldn't really care less about how accurately they target their customers presumably because junk mail is such a cheap method of advertising anyway.

Time to ditch the DSA agreement.

29 Jun 2020, 08:42

Celgar wrote:
Woody Guthrie wrote:Approximately 65% of letter volume is DSA.
Royal Mail no longer has the capacity to deal with that 65%.
The business has actually made a great deal of money by reducing that capacity and selling off the relevant real estate.

What they certainly don't want to do is re-invest in what is by all accounts a dying revenue stream.

And no, DSA was not imposed on us by the EU, "fair competition" was imposed on us by the EU. The way it was implemented is the fault of successive governments and Royal Mail boards. Very few EU countries have opened up their postal markets in such a self destructive manner. We're special.

As I understand the way DSA works the other companies just collect the letters then drop them at the nearest RM MC. So its not a case of capacity as we already do the majority of the work involved. They just undercut us on the contracts. Its like the supermarkets selling stock for less than its worth or diddling their suppliers.
The major difference, or discrepancy, is that we do the majority of the work but receive only half of the revenue. As a direct result our prices have had to rise exponentially over many years which has made us even more uncompetitive in certain categories of mail.

Companies involved in DSA Collect & Sort the Items then transport them to RM,s ,Inward Mail Center,s for final processing , i.e Walk Sorting , Despatch to Delivery Offices

Time to ditch the DSA agreement.

29 Jun 2020, 09:39

wallan wrote:Companies involved in DSA Collect & Sort the Items then transport them to RM,s ,Inward Mail Center,s for final processing , i.e Walk Sorting , Despatch to Delivery Offices

Mech letter DSA gets walk sequenced (or walk sorted) all other DSA (manual letters, flats and packets) just get sorted to DO level only by the inward MC

Time to ditch the DSA agreement.

29 Jun 2020, 09:50

krussel wrote:With the recent announcement that we are now losing money hand over fist is it not about time we finished the DSA agreement and once again retained the full price for our delivery services. Lets be honest the DSA was supposed to help other companies set up and start their own service. That is simply never going to happen whilst they can ride on our backs. Now post Brexit as well.
RM seem to have forgotten all this, its never mentioned and they are trying to save money by cutting costs and jobs from within.

I'm pretty sure that we are required by law by the regulator to provide DSA to other companies, beyond ridiculous I agree, we must be losing millions through this and no doubt will be part of the new discussions with OFCOM (we hope).

Time to ditch the DSA agreement.

29 Jun 2020, 12:43

If 65% of the letter traffic handled at the Inward M C is DSA , off the remaining 35% handled at the Outward M C what % is 1st Class

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