Royal Mail urges regulator to look into TNT Post’s challenge

[RTP]

What is going to happen with the USO is simple, in about 1/2 yrs time this Govt. will look again at the USO and say it's unfair that only RM have to abide by it and then abolish it so creating a fair playing

Possibly, but there's maybe another added scenario. The Government are in bed with TNT(why else would they hold their part conference in Manchester showing off TNT to all the press) in time TNT will win their VAT case in the European courts. The Government will give it "oh them nasty European Courts have done us up like a kipper again". So....the Government took on Royal Mails pension deficit that successive Government never paid into, they sell Royal mail back to the public, they then get a huge windfall in VAT every year off both TNT, Royal Mail and whoever else is in the business. The Government get back everything they initialy robbed from our pensions in the first place, TNT get plenty of business and employ staff on poor wages. Everyone's a winner apart from the Royal Mail workforce and the British public. Ed Miliband also knows what's going on, which is why he's keeping quiet in case he gets to steer the ship next time.

[Patrick301]

London , Manchester 1st
Birmingham , Sheffield ,Leeds and Glasgow next
followed by any big city or large populated town
mass job losses for current royal mail delivery postmen/women
this is why free shares are a waste of time
and foolish to even consider buying any extra
the DSA wont even come into mailcentres after privatisation
Amazon will go to TNT or DHL
meaning hardly any work in mailcentres , forcing them to close

[meweavy]

Why would we lose all dsa after privatisation? .
Just because tnt have their own postal network being put in place, which surely wont be that profitable for them considering the logistics and employment costs.
But we deliver so much dsa that doesn't include tnt.this may be one good thing that might come from privatization.
The regulator might level out the playing field, which could mean that the likes of uk mail etc wont be able to deliver their own mail ans we wont have to do the final mile in terms of dsa delivery.
Hopefully this could claw back all the dsa work back into the hands of royal mail contracts.
Maybw in the future royal mail wont havw to do the final dsa mile, therefore handing back what money we lose in dsa back to royal mail hands.
Speculation of course.

[Brain Fury]

Why would we lose all dsa after privatisation? .
Just because tnt have their own postal network being put in place, which surely wont be that profitable for them considering the logistics and employment costs.
But we deliver so much dsa that doesn't include tnt.this may be one good thing that might come from privatization.
The regulator might level out the playing field, which could mean that the likes of uk mail etc wont be able to deliver their own mail ans we wont have to do the final mile in terms of dsa delivery.
Hopefully this could claw back all the dsa work back into the hands of royal mail contracts.
Maybw in the future royal mail wont havw to do the final dsa mile, therefore handing back what money we lose in dsa back to royal mail hands.
Speculation of course.

OFCOM will not allow RM to refuse DSA because it will restrict competition and provided we can continue to make a profit from it why would we want to stop. The real threat is our competitors developing their own delivery operation. OFCOM will want that to happen so will not prevent TNT's development at the moment. Their task is to ensure that TNT are not allowed to offer a limited service over only profitable routes that will make it significantly more difficult for RM to maintain the USO.
Not only would significantly downgrading the USO be political suicide for any party (especially the Tory's who want the rural vote) but it is still governed by the EC so talk of scrapping it altogether is wrong.

[meweavy]

Im not saying scrap dsa, but if ofcom want to make a level playing field, do you really think that uk mail, one post, dhl could follow in tnts footsteps and start their own postal distribution?
Surely it would work in royal mails favour if offcom did make it a fairer playing field.
we wouldnt have to deliver competitors mail, competitors wouldnt be able to afford to deliver their own mail, leaving royal mail to claw back the contracts that we already deliver anyway but atm for half the price we could get.

[Brain Fury]

Im not saying scrap dsa, but if ofcom want to make a level playing field, do you really think that uk mail, one post, dhl could follow in tnts footsteps and start their own postal distribution?
Surely it would work in royal mails favour if offcom did make it a fairer playing field.
we wouldnt have to deliver competitors mail, competitors wouldnt be able to afford to deliver their own mail, leaving royal mail to claw back the contracts that we already deliver anyway but atm for half the price we could get.

It would be better from RM but it's not going to happen for some considerable time if ever because OFCOM wants more competition in the postal sector and that will mean that DSA continues to be an option until there are sufficient competitors that have set up their own delivery operations i.e. DSA will only go when the amount of competition in delivery makes it unnecessary not just to suit RM. The "level playing field" that RM is talking about is that any company that does set up it's own delivery network (like TNT) should be subject to some minimum standards so that they cannot simply "cherry pick" by offering say a 3 day per week delivery in major cities only. RM has been talking to OFCOM for some time to confirm the point at which OFCOM would step in to regulate TNT's delivery service and what regulation might look like. The main weapon we have is the affordability of the USO. Far from wanting to get rid of it, it provides the leverage we need to ensure that any competition we face is "fair". Without the USO it's every man for himself and that's a battle RM almost certainly couldn't win in the long term.

[biscuit1957]

TNT and other independent companies have complained that RM do not pay VAT or Tax on fuel,now they want a level playing field

[fishtank]

My thoughts...
Within 3-5 years there will be a "USO pot" that competitors pay into to subsidise the loss making side of the USO.
It won't help us much though because end to end will strip the profitable urban work away from us forcing RM to set up a secondary delivery workforce on the same kind of wage structure just to compete in those areas.
This is what is called "managing the decline in letters".
The core business will move over to parcels but there certainly isn't enough of that to sustain 140,000 employees.
It won't be pretty.

[meweavy]

TNT and other independent companies have complained that RM do not pay VAT or Tax on fuel,now they want a level playing field

A level playing field. ..
Are they not aware that we actually deliver their mail for them?
They want a level playing field then all our competitors should delivee their own mail.

[NWpostie]

The competitors will shoot themselves in the foot if they force the VAT issue as the USO (and their mail) will not be covered as it would be unsustainable, the reason we don't pay VAT is that we are a Crown service and is expected to deliver to every address in the UK for a single uniform price, if that goes the USO will be have to be rolled back.

[k979aaa]

Delivering the final mile is the expensive end of the business. TNT may try but there is a good chance they will fail. It's more profitable for them to have RM do the final mile while they sit back and count the profits. They also avoid the problems that running an extra workforce can cause. I give it 6 months before they scrap it and go back to just making money off RM workers sweat. They have a licence to print money as it is and they'll realise this soon enough.

But if it's going to fail why did they extend it from West London to South/Southwest London and now to Manchester ?
Still a long way off the Highlands and Islands though.

Never happen their but Birmingham, Leeds, Glasgow, Newcastle are next on the cards.

[stodgy88]

anyone know when TNT are due to deliver in the sheffield area -cheers.