The postal strike that was delivered too late (Independent)

[Bloke7]

The postal strike that was delivered too late
In the Eighties, picketing posties threatened to bring Britain to a halt. This time things are different, says Andrew Murray-Watson
Published: 29 July 2007

Twenty years ago, the postal workers' strike cast a long shadow. The prospect of letters sitting in sorting offices across the land was seen in some quarters as nothing less than a national emergency. In Thatcher's Britain, postmen locked up their bicycles at what they saw as the looming privatisation of the Royal Mail.

Two decades on, and the 140,000 staff who ensure that mail is delivered are striking again. This time they have been motivated by "modernisation" of the Post Office, a pay offer that the Communication Workers Union sees as inadequate and the prospect of less generous pensions in the future.

Wednesday saw the start of a fortnight of industrial action that promises to disrupt mail deliveries. But this is not 1987; today it doesn't look like anybody cares nearly as much.

The CWU has rejected the Royal Mail's offer of a 2.5 per cent pay rise and warned that modernisation plans will lead to 40,000 job losses. It claims that management has refused to enter into negotiations and that its proposals will lead to customers receiving poorer service.

For its part, Royal Mail claims it simply cannot afford to offer its workers more money, and points out that staff at the company's commercial rivals are paid about 25 per cent less. Royal Mail is in receipt of a £4bn loan from the Government, provided at a commercial rate, to be used for the modernisation programme and to shore up its pension fund (which currently has an estimated deficit of £6bn), to which the company already contributes £800m a year.

Royal Mail's financial results for last year, due out shortly, will show that it barely made an operating profit for 2007. The company is in negotiations with the CWU over its pension proposals. The issue made headlines last week after a report appeared in a tabloid newspaper claiming Royal Mail staff would have to work for five more years before collecting their retirement pay. Royal Mail has denied the allegation, saying that leaked documents used as the basis of the story were outdated.

But Allan Leighton, the company's chairman, has repeatedly highlighted the need for modernisation in the face of growing competition from rivals such as TNT, UK Mail, DX Group and SMS.

The UK postal market has been fully deregulated for the past 18 months. In most cases, Royal Mail is paid by its commercial rivals to deliver their mail over "the final mile" between the sorting office and the front door at the rate of 13p per item. Insiders claim that because of its high cost base, the company loses "a couple of pence or so" on each item it delivers to the doormat for other companies. This is disputed by its rivals, who want Postcomm, the postal regulator, to reduce the last-mile cost.

These rival companies are interested only in the business market and, unlike Royal Mail, are not burdened by the universal service obligation.

Among the biggest challenges Royal Mail faces is the urgent need to update its antiquated infrastructure. One former executive says: "Go to any large sorting office and you'll see dozens of workers sorting mail by hand. Cross the road to a similar facility owned by one of Royal Mail's rivals, and you'll see shining machines doing the same job with hardly a human being in sight."

But funds for new machinery are in short supply, as the organisation struggles to rein in its overheads. James Greenbury, chief executive of DX, says: "By my calculations, Royal Mail's costs are £1bn a year too high. I wouldn't be able to sleep at night if I ran a business with that level of cost."

It is the commercial market that is most affected by the CWU strike. According to Royal Mail insiders, the company's 100 largest corporate customers account for 40 per cent of its business. In total, over 90 per cent of the items it carries are business related. The longer the strike goes on, the more businesses will look to switch suppliers.

Mr Greenbury says: "In the last month, we have won £10m in new business – an amount we might have expected to win over the course of a whole year." But, he added, the CWU strike had damaged confidence in the whole industry.

That sentiment is echoed by the Federation of Small Businesses. A spokesman for the trade body says: "About 94 per cent of our members use Royal Mail exclusively, as they are not big enough to be seen as attractive customers by other postal suppliers. If the strike carries on over the summer, more of our members will run into [cashflow] problems as 69 per cent still send invoices by mail."

The trend for small and medium-sized businesses to use email to carry out transactions will be accelerated – further damaging Royal Mail's revenues, he says.

A spokesman for Postwatch, the independent postal services watchdog, says: "This industrial action is bad news for the customer in the short term and bad news for the industry in the long term. Postal companies are not just competing with each other, they are also competing against other mediums such as email. This strike will only accelerate the decline of postal services and is happening at the worst possible time. The industry needs to be working together. Instead they are killing themselves."

The image of the neighbourhood postman trudging to the front door in all manner of appalling weather is one that the CWU conjures up whenever it perceives a threat to its members. Indeed, only last week, a postman in Evesham, Worcestershire, used his own four-wheel drive car and braved rising flood waters to deliver copies of the new Harry Potter book.

But while this type of dedicated service still exists, sadly for most consumers, especially those living in a city, the service delivered by the Post Office is typically very poor. Huge queues at post office counters, unhelpful staff at sorting offices and a first post delivered at all times of the day have broken the emotional link between the customer and the postman.

And in a world where email and text messages have led to instant communication, the plight of the Royal Mail just doesn't seem that important any more. If industrial action carries on into the autumn, we may turn our backs on what used to be one of the most respected institutions in Britain.

from http://news.independent.co.uk/business/ ... 814665.ece)

[pinstripe]

"If industrial action carries on into the autumn, we may turn our backs on what used to be one of the most respected institutions in Britain."
From the lack of support from the govt. and the public, not to mention an almost total media blackout, I think this has already happened. Thank god for the Daily Mirror.
As for customers turning to our rivals or using e-mail, that explains the 18 yorks of mail awaiting my office Monday.

[Bloke7]

As for customers turning to our rivals or using e-mail, that explains the 18 yorks of mail awaiting my office Monday.

Yeah, that email, it's such a pain taking away all that average 120kg I carry every day...

[TrueBlueTerrier]

Why do I get the feeling that the piece above was written by some high powered and overpaid PR guru based at RM HQ.

[ROCKY]

written by someone who could not be bothered to leave their desk and look around,nothing new just a re hash of things that have been printed before

[baldrick]

......" and the prospect of less generous pensions in the future."

Generous pensions? I wonder what sort of pension he's going to get for sitting behind a desk regurgitating RM propagenda.


......." The company is in negotiations with the CWU over its pension proposals."

A journalist is supposed to get his/her facts right. This person seems to just make it up.

[Stormproof]

Don't know if this has already been posted, apologies if it has

http://commentisfree.guardian.co.uk/bil ... ideas.html

[Carnoustie]

Why do I get the feeling that the piece above was written by some high powered and overpaid PR guru based at RM HQ.

That's what I thought when I read it ! Especially the line Royal Mail's financial results for last year, due out shortly, will show that it barely made an operating profit for 2007. I think the most important word in that sentence is 'show', i.e. the figures have been in the oven at Gas Mark 6 for the last three months, to cook up a result that fits in with management's claim that RM can't afford more than 2.5%
:cfo :lfo

[johno47]

What company pays out millions of pounds in bonuses to managers when your strugling to make a profit, absolute total bulls**t...UNITY IS STRENGTH.

[DOM]

As for customers turning to our rivals or using e-mail, that explains the 18 yorks of mail awaiting my office Monday.

Yeah, that email, it's such a pain taking away all that average 120kg I carry every day...

Thats the attitude. Wouldn't it be great if everyone used the alternatives and there would be nothing for you to carry!!

[Bloke7]

As for customers turning to our rivals or using e-mail, that explains the 18 yorks of mail awaiting my office Monday.

Yeah, that email, it's such a pain taking away all that average 120kg I carry every day...

Thats the attitude. Wouldn't it be great if everyone used the alternatives and there would be nothing for you to carry!!

Yes, the alternatives; email, tried and trusted around the world. Royal Mail, no longer trusted to do what it once did brilliantly. Those alternative delivery staff who would jump at delivering the amount of mail we do for RM every day; the casuals who last barely a week.

Our sarcasm is understandable when you've actually done the job as it is today and not sat behind a desk being told how to manipulate figures and facts to suit ends which no longer match reality. (this is a general comment and not directed at any one person btw.)

What you have suggested bears no relation to the real world; I don't want to lose that work but I don't want to be pushed to the point where the work becomes too much for even people who are younger and stronger than I am. What I was saying was that we don't want to be crippled by a company that seems to like flouting health and safety because it sees that as a way of making more profits at the sake of less jobs.

IMHO.

[Spedley]

I thought that was quite a fair article, the first I've seen that gives the correct resons for the strike. It said we do have a genuine gripe and that RM is in a tough position and that Postcom and competitors are crippling us.

What I don't understand is why RM's customers would use a different company because of the strikes - we still do the final mile so their mail is almost as late as ours.

The results come out on Tuesday (I think) so we should find out really how poor and badly managed RM is. If it really is making a loss I can't see any other reasons than bad mangement.

[robmacca]

It seems like the writer of the Independent article is rather anti-postman, but then it was for the business section so I guess they needed to pander to the corportate readers.

Email/Internet has often been used as a "weapon" to try and say mail volumes would drop significantly - yet many years the story has been quite different with the explosion of ebay/Amazon and other internet companies delivering more business our way.

According to RM, volumes are only down about 3%, yet they want to add a darn sight more than 3% to our walks and cut more than 3% of the work force in our offices.

Talking of figures not matching up ..................... the RM results should make interesting reading, having been cooked up for the past few months!

[Big Daz]

The problem with % figures is that while they add up in real terms to a high figure overall once youbreak it down to items down per walk you are looking at only 20 letters down per postal delivery worker leaving no scope to make the round bigger!

[ROCKY]

yes we keep hearing that mail volumes have dropped by ?% this year but no mention is made of all the years that volumes rose by 7% to 8% each year with less staff each year with more and more del points each year,our local rag reckons we could have up to 40,000 extra homes built in our area over the next 10 years,thats a shed load off posties to cover those extra drops