Postmasters hit out at ‘kick in the teeth’ Royal Mail rate cuts

[POSTMAN]

https://www.thegrocer.co.uk/news/postma ... 97.article

Postmasters are infuriated over the Post Office’s decision to reduce pay for processing certain Royal Mail products.

Under the Post Office’s new agreement with Royal Mail, postmasters will receive less remuneration for handling Royal Mail products such as returning and collecting parcels and printing labels.

These include labels to go dropping from 14.5p to 2.5p, local collect from 39.5p to 30p, home shopping items from 35p to 32p, and tracked parcel acceptance from 35p to 32p.

Payment for tracking large letters, however, has increased to 15p, up from nothing previously.

The Post Office said the new rates would boost competition and parcel volume, but postmasters have warned they would not offset rising operating costs.

“It’s a kick in the teeth for any postmaster hoping to survive in today’s market,” says one postmaster. “With rising operating and staff wages, the salary we receive does not cover that, even if it is a footfall driver. It’s time to rethink for all postmasters.”

Another one said: “It’s going to impact our profits which is frustrating when our operational costs are rising and staff wages for operating our Post Offices are going up. It’s no fault of our own.”

Some postmasters are particularly concerned about the 83% cut in remuneration for processing labels to go, given the service’s high volumes.

“It’s shocking to find out this has happened,” said Paul Cheema, who runs a Post Office in his Costcutter store in Coventry. “Do Royal Mail now believe that local community stores have become free warehouses?

“How can we expect to process label to go products on 2.5p per transaction from 14.5p considering this is most of our trade? It doesn’t justify doing the transaction when you’re manning the Post Office from 8.30am to 6.30pm. It’s a joke.”

Ellie Banwell, strategic development manager at a Post Office in Killen, said: “Remuneration for printing a label in store has been slashed from 14.5p per label to 2.5p per label.

“To earn minimum wage, we need to process over 500 per hour, or one transaction every 7 seconds, with no breaks. Even if you ignore the time it takes customers to walk forward and find their QR code, it still takes the system more than seven seconds to read the code and print the label.

“The argument we have been given is that increased volume will make up for reduced remuneration, but increased volumes of a loss-making transaction increases losses, not profits.

“We talk about postmasters not being paid minimum wage, but I believe strongly that is the wrong framing: postmasters are paying to subsidise a public service.”

The Post Office claimed the new rates would boost parcel volumes by ensuring the services remained “competitively priced” and would encourage Royal Mail to divert its customers to Post Office branches alongside post boxes or lockers.

The Post Office said this was because Royal Mail had the ability to direct significant volume away from Post Office branches and into alternative channels through changes to its processing requirements and customer journeys.

“The new agreement with Royal Mail protects and grows postmaster remuneration by ensuring the Post Office remains competitive and relevant in a rapidly changing parcels market,” said Post Office parcels and mails director Neill O’Sullivan.

“For the first time in many years, our Parcels & Mail business is delivering sustainable growth, supporting our wider ambition to create a better deal for postmasters.

“The agreement is designed to secure growing parcel volumes within the Post Office network while reducing the cost to serve through automation and simpler processes. Together, these changes will help postmasters benefit from continued growth in parcel demand.

“The broader direction of travel and the challenges facing the parcels market have been discussed with postmaster representative groups over a considerable period. As with any commercial negotiation, we are unable to share detailed terms while negotiations are ongoing. We remain committed to engaging with postmasters and their representatives as the agreement is implemented.”

The Post Office said rates for processing international Royal Mail products remained the same. It also pointed to the increases in banking and travel product remuneration rates which were announced earlier this year.

Last year, the Post Office delivered an additional £91m in remuneration to postmasters, which exceeded its previously announced figure of £86m, it added.

[NWpostie]

The last set of Postmasters complained to me how they were getting less money than they used to 20 years ago and now they're coming back with more cuts after losing Postmasters money from Horizon shortfalls and the compo payment, one particular postmaster said she was glad to be offered a redundancy package and quickly got out of the business, in hindsight she's one of the lucky ones, who would be a postmaster now.