French move into UK mail

[pinstripe]

I will say it again. Whilst competitors only work under DSA licences there is little or no profit margin. Quite simple. With another major competitor coming into the market the margins will squeezed even further.

The only winners so far are big business customers who have been able to knock 5%+ off their postage bills.

If anyone disagrees with me then show me the figures. I have studied this matter in some detail, possibly more detail than almost anyone else in this country.

If there is anyone from La Poste coming on here and want to save some money and time pm me and I'll charge you a fair price for some simple straight forward economic advice on the stte of the UK postal industry. The alternative is to waste a lot of time and money and go back to France with your tail between your legs.

F0zz

Don't quite understand why any company would invest in setting up a business anywhere unless there was a profit to be made. The only other reason for going to the expense would be to spite RM. Maybe they're not all bad.

[BELIAL]

I will say it again. Whilst competitors only work under DSA licences there is little or no profit margin. Quite simple. With another major competitor coming into the market the margins will squeezed even further.

The only winners so far are big business customers who have been able to knock 5%+ off their postage bills.

If anyone disagrees with me then show me the figures. I have studied this matter in some detail, possibly more detail than almost anyone else in this country.

If there is anyone from La Poste coming on here and want to save some money and time pm me and I'll charge you a fair price for some simple straight forward economic advice on the stte of the UK postal industry. The alternative is to waste a lot of time and money and go back to France with your tail between your legs.

F0zz

Don't quite understand why any company would invest in setting up a business anywhere unless there was a profit to be made. The only other reason for going to the expense would be to spite RM. Maybe they're not all bad.

Puzzling, not much commercial sense launching a loss leader that's not leading anything. Unless of course there is a larger degree of global cooperation than is immediately apparent. It does seem that Treasure Island is somewhat the Trojan horse of Europe right now. We do seem to manage to lead the world in Uncle Samisation [alongside S. Korea of course]

[F0zziebear]

It is a strange situation.

1. The UK is a potentially lucrative market if you could setup an E2E network
2. UK postal prices ar echeap compared to the rest of Europe so you are not playing with large margins to start with
3. Large UK businesses are used to high levels of quality, so to provide an altnerative DSA service you need to be hitting 99% target of getting DSA into Inward Mail Centres on time.
4. The Final mile price squeezes the price between Mailsort 1-3 and what a competitor can offer
5. 2nd Class volumes are quite small and are not uniform, which makes handling them expensive and therefore not attractive as a profit proposition.

In summary RoyalMail's pricing, wholesale and strategic managers should be congratulated over the last five years for stifling competition without being clearly caught doing it. In the meatime RM have been quite quickly cutting jobs at the frontline and management and are in the process of modernising it's machinery. A similar approach that DeutschePost took in the 1990s.

The other thing is that whilst DSA accounts for almost all competitive activity they can only compete directly against existing RM products and not design new ones.

Postcomm are inept at how to open the market in the UK.

So the question why are La Poste coming to the UK is a good one. TNT have been here for several years and have still not managed to setup a successful rival E2E system. Anyone noticed that TNT have started to go a bit quieter these dyas and not be so loud?

[Night Tonic]

Exactly right but this is about to see a shakeup once Postcomm reorganise the regulation structure.

[F0zziebear]

Even if Postcomm restructures Royal Mail will want to stifle competiton until they are ready. Until they have modernised their operations allowing competition would be fool hardy.

Secondly the UK is not well designed to allow for organic growth by competitors. Offering regional mail operations are just not very viable. The Uk is based around a captial that is twice the size of it's next largest city. This is not the case elsewhere in Europe (at least competing countries). one needs to offer a national mailing facility. However, this will cost tens of millions to setup before a profit can be made. We are talking 5-10 years minimum. The returns are just not exicting when compared to other opportunities in the Developing World.

If La Poste, TNT, DeutschePost or even FedEx wants to start a competitive operation they will need considerable baseload mail (usually in the form of mailsort) to justify the employees they will need to deliver. On top of that they will need to offer comparable quality of service when compared to Royal Mail. Regardless of what you say about the deteriorating service, it is still a fantastic service.

Why would you take the risk?

[Night Tonic]

Indeed it is and still rated as one of the best in the world.