Postcomm calls for Royal Mail overhaule

[johnnyp]

ByLine: Sara Kimberley
Publication date: 31 Mar 2008

Postcomm, the independent postal services regulator, has lambasted Royal Mail for failing to meet postal challenges, and urges it to reform to lead a healthier mail market and provide a strong universal service.

The regulator has said Royal Mail is lagging significantly in terms of investment, efficiency and substantial product innovation. It also believes Royal Mail’s recent focus has been on forestalling new entrants to the mail market and far less on adapting to these more far-reaching structural changes, which it believes is unsustainable and unless addressed will result in accelerating decline.

Postcomm has also criticised Royal Mail for not creating new opportunities in the current new media mail market, which has seen the increase of use of alternative forms of communication such as email and the Internet.

Postcomm chairman Nigel Stapleton says: “There has to be a step change in strategy and approach, such that Royal Mail moves forward decisively to address its legacy issues of under-investment, difficult labour relations and the massive burden of its pension fund deficit. Recent experience in the parcels market demonstrates that more competition, particularly over the final mile, will help rather than hinder this fundamental transformation. The clock cannot be wound back on the competitive developments facing Royal Mail that are bringing significant benefits to customers. It is perfectly possible, however, for an organisation of the scale and reach of Royal Mail to transform its business and customer services rather than to remain locked in the past. We have been waiting far too long for this to happen and decline will be irreversible if these nettles are not grasped quickly.â€

[TrueBlueTerrier]

http://www.guardian.co.uk/uk/2008/mar/28/post

Royal Mail and its industry regulator, Postcomm, clashed yesterday over the liberalisation of the letters market and their views for its future.

Postcomm claimed that Royal Mail was finding it "extremely difficult" to cope with the challenges it faced and warned that unless there was change in the company's transformation programme the outlook for Royal Mail and the rest of the postal industry in Britain was "distinctly unfavourable".

"Royal Mail's problems are a lot more deep-rooted than having to deal with modest amounts of mail competition and regulation," said the Postcomm chairman, Nigel Stapleton.

Royal Mail said it was "extremely concerned" by Postcomm's views, which have been prepared for submission to the government panel reviewing the postal services market. It argued that competition was well ahead of the regulator's initial expectations.

Royal Mail's chief executive, Adam Crozier, said: "Royal Mail believes in a competitive marketplace and we are the only major European operator to have embraced and welcomed competition in its home market."

In its submission, Postcomm said competition in the letters market and regulation to protect vulnerable users had brought benefits to postal users. Larger customers were paying lower prices, while smaller businesses were seeing the benefits of improved customer service and product innovation. The quality of service had improved and though stamp prices had risen faster than inflation they remained among the cheapest in Europe.

However, the regulator warned that the mail market was under pressure from email and the internet.

Royal Mail "is an organisation that is burdened by very considerable legacies. These include a long history of under-investment in modernisation, a difficult labour relations environment, a culture where change is difficult and slow to make and pensions liabilities that are disproportionate to the size of the mail business."

It said downstream access - where Royal Mail delivers letters collected and sorted by the private sector - had reached 20% of the mail market, though Royal Mail still controlled 99% of the final delivery.

"The prospects look distinctly unfavourable given that Royal Mail's volumes are in decline, its revenues are flat, market share has been lost in growth areas such as e-fulfilment [delivering goods ordered online], unaddressed mail efficiency targets have not been met and investment in modernisation has been delayed."

The regulator warned that without a huge change in the pace and scale of Royal Mail's reform programme its financial position would decline to the point where large amounts of taxpayers' money would be required to support the universal service obligation (USO), under which Royal Mail offers deliveries once a day, six days a week, to every address in the UK.

Royal Mail's own submission argues that it is over-regulated and criticises Postcomm for the "flawed assumption" underlying the regulator's price review.

Crozier said: "Since 2002 we have taken out £1.5bn in costs and reduced headcount by 50,000 - while at the same time we have met the efficiency and quality of service targets set by the regulator."

He acknowledged more needed to be done but added: "Post does not exist in a vacuum and Royal Mail needs the same flexibility as its rivals." Royal Mail expressed concern that Postcomm had "barely" mentioned the USO, which Crozier described as "part of the fabric of our society and a huge asset to the UK".

Royal Mail added: "We are concerned that Postcomm seems to question whether the universal service ... can be sustained at all in a competitive market."

[opgpat]

[quote=

In its submission, Postcomm said competition in the letters market and regulation to protect vulnerable users had brought benefits to postal users. Larger customers were paying lower prices, while smaller businesses were seeing the benefits of improved customer service and product innovation. The quality of service had improved...
[/quote]

'Benifits' to postal users have come at great expense of the postman and woman's standard of life. We have to go through hell somedays doing a job that is ruining out health so that the market can be a cut-throat race to the cheapest price for a poorer and poorer service. And has the service really improved??? Less time to do more work equals more human error, more missorts, more letters killed off as you don't have even 10seconds to check out the address. Customers haven't complained to me as much as this before, everyone gets the wrong mail (i find when doing others rounds). Postcomm are as detatched from the realities of the 'final mile' as RM pretend to be. They sound like they have no interest whatsoever in the workforce, no understanding of the service customers are in reality getting and most interested in making a certain buisness more profitable. They are not impartial but have strong ideological leanings. They will soon be advocating the minimum wage for RM workers.

[BB brother]

If Nigel Stapleton wants to see more investment in Royal Mail then perhaps he should speak to the man who writes his pay cheques, the right honourable John Hutton,secretary of state,would be Union breaker, and Overlord of messers Lieghton and Crozier .

Politics eh !

[POSTMAN]

Don't be shy BB just say what you feel.

[BB brother]

Lol.....tricky things these keyboards