Cost-cutting is necessary, but regulatory change is also nee

[TrueBlueTerrier]

Cost-cutting is necessary, but regulatory change is also needed to save Royal Mail

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If one thing is thing is clear from the doom and gloom presented by Royal Mail earlier this week, then it is this: the firm, as inefficient a business as it has been in the past will never prosper unless freed of regulatory shackles.

The numbers, on this occasion, do not mask a brighter reality. Operating profit down to £34m, a staggering slump from the £180m registered a year earlier.




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This is no accounting anomaly, it results from the mail operators’ core business - sorting and delivering mail - being in inexorable decline. Mail volumes fell 4% in 2010/11 and are expected to slump by a further 5% in the next financial year as consumers, personal and business, turn to electronic and social media communication.

Cost-cutting, through the planned closure of mail sorting offices and many thousands of planned redundancies, will not alone guarantee the 350-year-old organisation’s future, fundamental change - instigated by Government as well as management is needed to give it a fighting chance to prosper.

As bloated and inefficient a business as Royal Mail has been in the past, it can do nothing to completely offset a regulatory regime that means it loses money on every piece of business mail, DM included, it delivers on behalf of rivals such as TNT Post. The current setup, overseen by Postcomm, also restricts what it can charge for services and where and when it offers them.

It needs to be set free to operate as a flexible operator of commercial services for business, be it delivery of items bought online, or DM. The latter, as under pressure from digital channels as it is, offers Royal Mail, through ad solution services or delivery, the chance to increase revenue. For all its critics, recent reports show there is life in mail yet.

Royal Mail will be hoping that Ofcom, soon to replace Postcomm as the mail regulator, will allow exactly this. The firm, led by chief executive Moya Greene, is accelerating cost-cutting, the Postal Services Bill will relieve much of its pension burden, but until the regulatory regime is changed, potential suitors will be put off and Royal Mail will be unable to live, or die, on its own merits.

[disheartened]

Cost-cutting is necessary, but regulatory change is also needed to save Royal Mail

http://www.marketingweek.co.uk/discipli ... 05.article" onclick="window.open(this.href);return false;

If one thing is thing is clear from the doom and gloom presented by Royal Mail earlier this week, then it is this: the firm, as inefficient a business as it has been in the past will never prosper unless freed of regulatory shackles.

That must be POSTCOM then,a goverment appointed body which fines Royal Mail(a goverment owned industry) by the millions with all the fines going to the goverment,then they instruct Royal Mail to take the dsa and deliver it at a loss and at the same time tell Royal Mail they cant get out and compete with the likes of TNT & UK Mail,the playing field aint level.

I may of got some of that wrong,but i think you'll get the jist

[clashcityrocker]

This is no accounting anomaly

Yes it is.

[Wessex]

Post com will become ofcom - what difference will it make .Why is one being taken over , by the other .Ok but why should the author think that regulation will change drastically ?.Has anybody questioned this change .Does it mean that Postcon was not fit for purpose?.Why doesn't the author find out.Why has there not been any bleating from Postcon execs ? Is it because it is all another postal Con.

[Broxi51]

Post com will become ofcom - what difference will it make .Why is one being taken over , by the other .Ok but why should the author think that regulation will change drastically ?.Has anybody questioned this change .Does it mean that Postcon was not fit for purpose?.Why doesn't the author find out.Why has there not been any bleating from Postcon execs ? Is it because it is all another postal Con.

IMHO Yes it will change drastically if TNT, DHL & others fail to stop it. The Govt want to make RM as attractive as possible for privatisation and will make all the changes that the CWU & RM
have argued for years to get. Unfortunately for the competition it will mean a major drop in profits as they will be shelling out more to RM for the final mile. It will also allow RM more flexibility
in the prices it can charge which will help persuade the big businesses to return to the fold. It wont be as much flexibility as RM would like otherwise it could destroy the competiton who have spent the last
5 years counting their profits rather than investing in a major network for deliveries.