Royal Mail's business customers find new low-cost rivals pro

[Geezer]

* Terry Macalister
* The Observer, Sunday 25 October 2009

http://www.guardian.co.uk/uk/2009/oct/2 ... ments=true


Group of major e-retailers warns many firms will stay with alternative parcel services after the postal strike

Business customers that turn to new low-cost alternative delivery services may not return to Royal Mail after the CWU strike. Photograph: CHRISTOPHER THOMOND

MANY BUSINESS customers who use the Royal Mail will not be returning after the strikes by the Communication Workers Union because their needs are being met by a new class of low-cost rivals, it has been claimed.

To the concern of Royal Mail, a survey undertaken by IMRG (Interactive Media in Retail Group), a community of e-retailers including Amazon, Tesco and other big names, suggests that 60% of them have full contingency measures to safeguard delivery of packets and parcels.

IMRG's Andrew Starkey said retailers had found previously unavailable alternative services from companies such as Home Delivery Network (HDN), myHermes and Useyourlocal.com.

"Royal Mail traditionally loses some business after strikes," he said. "It will be more this time because of the new services coming on line. The union is trying to preserve jobs but it will only lose more."

Other, more established rivals to the Royal Mail, such as TNT, DHL and DX, also expect to win permanent customers as a result of the disruption, although they say much depends on how long the strikes over pay and modernisation last.

HDN makes no bones about the fact that its new "lite" service is designed to take business away from Royal Mail.

"With continued uncertainty about the reliability of Royal Mail deliveries, [HDN Lite] is designed to meet growing customer demand for fully trackable and guaranteed delivery – at the same price as competing non-tracked services," said Brian Gaunt, HDN's chief executive.

Collect+, an offshoot of HDN that is part-owned by in-store payment service PayPoint, is using a network of 3,500 convenience stores and even petrol stations where mailed items can be left for customer pick-up.

Useyourlocal.com, which opened for business only 12 weeks ago, is using a network of pubs. Its founder, Stuart Mills, a former Scottish & Newcastle brewing executive, says business has doubled in the past week and he too is confident some of those customers will stick. "Royal Mail is still best value for letters but for parcels and packages it is different. When people see how cheap and easy it is to use services like ours they should continue to use them."

Meanwhile, more established private deliverers are also seeing an explosion in business. DX said it had witnessed a 700% increase over the past seven days in people accessing its closed network of registered "boxes", as business customers try to circumvent the impact of the Royal Mail problems.

"We have had a 400% increase in calls from existing or new customers and are handling 1m items a night," said a spokeswoman.

Unlike TNT Post and UK Mail, DX offers a complete collection and delivery system with no help from the Royal Mail, but its customers are traditionally legal and financial services firms rather than retail or other businesses. While it has 25,000 customers, it admits it will never attempt to compete with Royal Mail for mainstream householders.

TNT Post, however, has been considering just that. But it says it needs legislative changes before it does so.

TNT currently handles 2.5bn items a year and has been experimenting with its own orange-clad postmen and women doing home deliveries in Liverpool. This arm of the wider TNT group will not benefit from the Royal Mail dispute, says its UK chief executive, Nick Wells, because the state-owned group provides "final mile" deliveries to doorsteps under an open-access agreement.

But David Walker, from TNT Express, which offers parcel services, said he had already seen "customers trading up" and would expect a 10% boost in volumes depending on how long the dispute continues. "We are getting a lot of new inquiries exploring quotes and wanting details about how TNT works," he said.

TNT Post claims to the biggest competitor to the Royal Mail and, alarmingly for the latter, has been making serious inroads into potentially lucrative public-sector business.

Once Royal Mail could rely on support from central and local government but this has changed in a period where all costs are under review.

This was emphasised last week when TNT Post won a £17m contract for delivering all second-class letters for Procurement Scotland, an arm of the Edinburgh-based parliament. The agency said the switch would save nearly £3m for the public purse, although first-class deliveries remain with Royal Mail.

The state-owned mail service has already lost to TNT a deal worth an estimated £25m with Amazon, previously its second largest customer.

A Royal Mail spokesman said: "The CWU need to realise that strikes are driving away customers and that's why we're continuing to urge the union to end its damaging, unjustified strikes and focus on providing customers with the reliable, high-quality service they need.

"Delivering packets and parcels is already a key part of Royal Mail's business and within a few years we expect half of Royal Mail's revenue to come from this sector."

Royal Mail declined to comment but has in the past accused private firms of "cherry picking" the best customers and leaving the state-owned organisation with the more exacting task of delivering mail to householders across the UK, all at the same price of a first or second class stamp.




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Royal Mail's business customers find new low-cost rivals promise more
This article appeared on p2 of the Business news & features section of the Observer on Sunday 25 October 2009. It was published on guardian.co.uk at 00.05 BST on Sunday 25 October 2009.






Comments in chronological order (Total 5 comments)


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mseymour's profile picture mseymour

25 Oct 09, 8:26am (about 12 hours ago)

Well we received an M&S parcel from HDN last week and it was an unmitigated disaster: instructions ignored, alternative address request ignored, parcel delivered 3 days later to the original address making the premium rate phone call to the Liverpool call centre pointless.
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bobbybt's profile picture bobbybt

25 Oct 09, 8:56am (about 11 hours ago)

All these courier companies will offer cheap deliveries and promise anything, then once the Royal Mail has been Mandlesonised the courier services will create conglomerates and charge what they like and it will all be too late as the Royal Mail will be gone. Remember you never know what you've got until it's gone. Are your phones, TV packages (Sky/Virgin) and Broadband, train fares etc cheaper and more reliable since privatisation???? but theres no where to go now and think of all the telephone companies that started and have dissapeared since privatisation as indeed will most of the couriers all taken over no doubt by Murdoch and his TNT.
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whitworthflange's profile picture whitworthflange

25 Oct 09, 9:07am (about 11 hours ago)

I'm still waiting for something from Amazon that was picked up four days ago by HDN and has still not arrived. Royal Mail are much better than that, it would have been here on Friday with them.
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London88's profile picture London88

25 Oct 09, 11:05am (about 9 hours ago)

Wish the negotiation process is going well
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25 Oct 09, 12:38pm (about 8 hours ago)

yes i've seen these couriers in action , seven days a week in their own cars doorstepping items , is this the modernisation RM talk of ? Also as a postie i get handed items miss delivered by the couriers , the people who have these packages left on their door step have no idea who has dropped them off or how to contact the senders. I should really take them back to our RM office get the surcharged then re deliver them. But as " a public service " i put them in the van and deliver them to the right address as i go round something i think a private company would do.

[POSTMAN]

Yeah,yeah yeah,same o same o

[DGP1]

When I tell people about HDNL delivering their items, they all just roll their eyes and smirk because they know that they'll be thrown everywhere at some time (usually whenever they can be bothered) and usually be some guy in his car

[wingmanchillian]

correct me if im wrong but i thought Royal Mail won the 17mil contract for first class but they got the 8mil contract for second class?

[clashcityrocker]

What I do not quite understand is why, if the packet market has been liberalised,can I not insist that Amazon use Royal Mail for my packet.Why do I have to put up with some inferior company doorstepping my packet in full view of everyone on a busy street.(Here is the packet and by the way no-one is at home.)The packet market has been liberalised for the benefit of big business but not the consumer.If the letters market is so liberalised the result will be the same.So if anyone from Amazon is out there why can we not choose the courier?

[Geezer]

Look at the comments, 5 of them and not one has a good thing to say about these other firms.

[bandit650]

These new firms or alternate firms can only keep thier prices low for so long and provide a service which is inferior to Royal Mail and everyone knows,we hade a chap turn up at our office witth a huge parcel which had been mis-delivered to his house and like normal he thought it was us,the side of the box told diffrent it was TNT that had left it on his door step,he then said well i dont want it so we said nor do we he then took it out side and left it there it was left down to us to then send a surcharge card to the customer to come and get it bet they were happy,if this is how the other half carry on they have a long way to go before they get to our standard,i am not saying we are perfect all the time but we do give a fairley good service for what people pay.

[norbert]

When I tell people about HDNL delivering their items, they all just roll their eyes and smirk because they know that they'll be thrown everywhere at some time (usually whenever they can be bothered) and usually be some guy in his car

always used to put other Parcel Co / Courier stuff in Surcharge , the PHG would do them , then they went out 1C with the stickers on as they'd already been delayed .

Think Reader's Digest was bad for that , another one was TSP ( The Softback Preview ) - there was clear instructions on the parcels that RM would not return anything without stamps on & there used to be all those packets of tights ( Don't get excited DGP 1 ! ) that were a nuisance , some firm in Liverpool sent them out - something to do with a cr**y shopping channel ?

My view was if somebody was being mithered by that firm sending out tights that were genuinely not ordered , sending them back surcharged was doing someone a favour .

One Fluffy Mgr was saying HDN ( Home Delivery Network ) was formed during the 71 ? strike with Tom Jackson up against the Tory Heath Government - OK fair enough , but I've heard so many horror stories about them .

[not me]

these firms are cashing in now
once we are back to 6 days they will return
didnt see big headlines when the couriers were adding fuel surcharges

[Spedley]

I don't know of any stupid businesses. If Royal Mail are cheaper and offer a better service then no business is going to stay with anyone else. Should Royal Mail go on strike then use another courier until things improve.

A silly article from silly people.

[sevenandseven]

Useyourlocal.com?

So where did you get that box of DVDs, Mr. Smith?
From a bloke down at my local, constable.
I see.
No, honestly. He's a courier.
Of course he is. If you wouldn't mind coming along with me, sir.

Anyone remember the proposal for milkmen to deliver packets? How long did that last?

[not me]

wait till xmas and they are tripping over packets

[norbert]

Useyourlocal.com?

So where did you get that box of DVDs, Mr. Smith?
From a bloke down at my local, constable.
I see.
No, honestly. He's a courier.
Of course he is. If you wouldn't mind coming along with me, sir.

Anyone remember the proposal for milkmen to deliver packets? How long did that last?

- that'll stop the DVD's being on the car boot , a lot of the fake stuff on them is a way of laundering drug money