Royal Mail still struggling to deliver

[TrueBlueTerrier]

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The recent announcement concerning changes to the Royal Mail’s pricing policies has been met with a healthy dose of resentment and unease. Ofcom, the postal service’s new regulatory body, is planning to end the current system of capped prices for first class stamps, a move that could free up Royal Mail to raise their charges in order to cope with ever-mounting pressure on finances and resources.

One threat in particular has been the cause of a lingering identity crisis. It is now commonly accepted that the advent of the Internet has severely dented the postal service’s traditional roles and responsibilities, but while e-mail may have replaced ‘snail mail’ to a large degree, there is still plenty of material left for Royal Mail to channel into our homes. Greetings cards, bills and statements, e-commerce packages and even the much-maligned junk mail quotient still find their way through our letterboxes on a regular basis. The web has found a way to incorporate and improve upon so many things, but in cases where we need a physical item the mail will always have a vindicating purpose.

For an organisation able to trace back its history for hundreds of years, the postal service can hardly be blamed for new upstarts posing a threat to its business, but some of the core values of the Royal Mail have arguably contributed towards the current financial woes. One of these is the Universal Service Obligation (USO), a directive that aims to ensure a fair system of fixed prices no matter how far a letter has to travel. It may seem a modern miracle that fixed-priced stamps mean a letter can travel from Land’s End to John O’Groats for the same cost as it would take to move down one street, but this system is put forward by some as an area in desperate need of modernisation and reform.

Even though the USO could be quietly haemorrhaging millions of lost proceeds, the regulation has been fiercely defended by proponents as one of the last remaining bastions of a fair and universal service remaining in the country. Fixed prices are also said to streamline a system that could become increasingly complex and laborious if altered to a distance-based model. Simply affixing a stamp to an envelope would become a thing of the past, as addresses would inevitably have to be entered into a system to determine the correct amount of postage. Calculating the size and weight of a parcel can necessitate a similar procedure already, but extending this process to distance would prove rather more contentious to those in favour of the USO’s all-inclusive principles.

Royal Mail’s operating procedures may be garnering most of the attention, but some are more concerned by the creeping influence of privatisation. As one of the last remaining businesses with a national concern in public hands, a sizable group have long cited the postal service as an unfair monopoly that ought to be scrapped and replaced with private carriers. The government appears to agree, with this year’s Postal Services Act clearing much of the path towards total privatisation.

Those opposed to breaking apart Royal Mail’s monopoly are already aghast at what opening up certain segments of the postal market has done to Royal Mail’s performance. Although other companies have been allowed to siphon off some of the profitable parcel delivery market, the real killer blow appears to have been the decision to force Royal Mail to deliver the post sorted by private companies as well as its own. The so-called ‘downstream’ aspect of the postal service concerned with delivering door-to-door is the sole responsibility of Royal Mail, and one that remains an unprofitable obligation.

Ofcom has also announced that rival ‘end-to-end’ systems will be given due consideration, suggesting that a fully privatised Royal Mail will only be a matter of time. Seeing the humble red post box replaced by a smattering of competing systems is a process that many are determined to halt, but the outpouring of devotion towards the government-owned postal service is tempered by the fact that Royal Mail has been operating in a perilous state of limbo for far too long. Faced with more challenges than ever, the added burden of delivering its rivals mail is a quandary perhaps only able to be fixed by either scrapping this responsibility or finally forcing private carriers to do the hard graft themselves. Whatever the decision, perhaps some of the clear-cut and even-handed logic of the Universal Service Obligation ought to be applied.

[DGP1]

I think I'm too close to a ban to actually say anything about this

[DirtyHarry]

They seem utterly determined to make a Chinese puzzle, out of something so very simple, don't they?