Royal Mail response to Postcomm's proposals on regulation

[POSTMAN]

Royal Mail response to Postcomm’s proposals on regulation framework

http://www.news.royalmailgroup.com/news ... royal_mail" onclick="window.open(this.href);return false;

08/11/2010


Royal Mail said today it welcomed any moves by Postcomm to allow the company greater freedom to compete and continue investing in modernisation to secure the future of the six-day-a-week, one-price-goes-anywhere Universal Service to the UK’s 28 million homes and businesses.

Moya Greene, Royal Mail Group’s Chief Executive Officer, said: "I am pleased that Postcomm clearly understands the need to continue to invest in Royal Mail’s future and to protect the Universal Service. The current regulatory framework is just not right and what is now proposed goes someway in the right direction.

"With mail volumes falling rapidly and set to decline further as competition from electronic communications and rival postal operators intensifies, it’s essential the current regulatory constraints on Royal Mail are eased to allow it to compete fairly in the bulk business mail, and packet and parcel markets, where competition is extremely robust and growing.

"We fully support fair competition but even if all the changes proposed today by Postcomm were implemented, Royal Mail, unlike all other participants in the market, would still face regulatory controls on packets and parcels and on bulk mail. The key to a flourishing postal market going forward is a stable Universal Service," said Ms Greene.

• Rivals now handle 60% of the bulk mail market.
• More than half of heavier packets and parcels in the 500-750g sector are handled by rivals.
• "Access" mail - collected by rivals but delivered by Royal Mail - accounts for more than one in three of all items of mail and more than half of all business mail - and this share is continually rising.
• On current trends, more than half of all addressed mail will be handled by rivals by the end of the current financial year.
• Royal Mail loses on average 2.5p on each item of access mail under the current regulatory rules and we have long pressed to receive a fair price for the mail we deliver on behalf of rivals.
• The combination of market decline and increased postal competition means that by 2015, Royal Mail’s end-to-end delivery volumes are expected to have shrunk by 75% in just over a decade.
• The UK has some of the lowest postage prices in Europe for mail weighing up to 20g and the lowest prices at 100g weight.

Ms Greene said she was confident Royal Mail was modernising faster and reducing its operating costs more than any postal company around the world had achieved in recent years. This was recognised just over a week ago when three of Royal Mail’s mail centres were bronze award winners in the World Class Manufacturing Awards.

"We are making good progress transforming our operations and I pay tribute to postmen and women for the scale of the changes they are undertaking. But it’s vital we step up the pace of modernisation and invest substantially more in the business - and the ability to set fair prices will boost Royal Mail’s modernisation drive," said Ms Greene.

Ends

Issued by Royal Mail:
100 Victoria Embankment
LONDON
EC4Y 0HQ
http://www.royalmail.com" onclick="window.open(this.href);return false;

Notes to Editors
1. Royal Mail has to date spent around £1.8 billion of the current £2 billion modernisation plan. Modernisation is a reality and is delivering real benefits.
So far:
• More than 600 new or refurbished machines have been installed in the past 15 months.
• We have doubled this year the number of delivery routes where the mail is sequenced to the point of call by the postman or woman, and almost 300 sequencing machines have now been installed.
• Delivery postmen and women have been issued with 28,000 hand-held devices which can electronically record delivery of tracked items of mail.
• The opening hours of more than 350 delivery offices have been extended,
• We have secured the supply of 4,000 small delivery vans, 10,000 lightweight trolleys and 5,000 high-capacity trolleys to better equip postmen and women on their delivery rounds and take the weight of mail off their backs.
• 30 "intelligent" new-generation Letter Sorting Machines have been installed. These machines can sort the mail at the rate of 39,000 items of mail an hour and we have also upgraded and extended a further 138 other large sorting machines.
• We have installed 30 new large sorting machines to sort A4 sized mail.

2. Well over 60,000 people have left the company since 2002. Eleven mail centres - the large offices which sort the mail for the UK network of delivery offices - have also closed since 2008, while two state-of-the-art mail centres have been opened. Consultations on further reductions to the mail centre network continue with our unions.

3. Royal Mail Group last week announced that its operating profit fell to £52 million in the first half of the current financial year and the profit represented a return of just over 1% on Group revenues of £4.4 billion, which also fell as mail volumes continued to decline and competition increased. The Letters business - the largest part of the Group - moved into operating loss. Operating profit fall in the Group was significantly lower than the loss in revenue showing an improvement in performance from further progress in modernisation. Key quality of service targets are being delivered above target, including First Class mail.

4. Stamped mail last financial year lost £163 million - equivalent to a loss of 6.4p per item.

[Stormproof]

The bloke at UK Mail ain't happy

Guy Buswell, chief executive of UK Mail, told Your Money he would be forced to pass on extra charges of £20m a year. “Customers are being asked to foot the bill for Royal Mail’s inefficiency and failure to modernise.

What a shame

[worktotime]

hold on let me wipe the tears away , and have a whip round, mails down what a load of bulls*** , try carrying it

[DGP1]

The bloke at UK Mail ain't happy

Guy Buswell, chief executive of UK Mail, told Your Money he would be forced to pass on extra charges of £20m a year. “Customers are being asked to foot the bill for Royal Mail’s inefficiency and failure to modernise.

What a shame

He could always set up his own delivery network that way he could save himself £20 million.