CWU's Royal Mail action is a threat to direct mail sector

[TrueBlueTerrier]

http://www.printweek.com/Business/artic ... il-sector/" onclick="window.open(this.href);return false;

In December 2012, bosses of the Communication Workers Union (CWU) threw down a challenge to Royal Mail when it threatened to ballot its members to boycott handling mail from downstream access (DSA) providers. While CWU's intended target is Royal Mail, the Direct Marketing Association (DMA) has raised concerns that the proposed action could cause significant harm to the multibillion-pound direct mail industry that it represents.

Ostensibly, the reason for CWU’s action is to protect the future job security of its members. The union has expressed fears that the expansion of competitors’ commercial activities could ultimately pave the way to developing a whole ‘end-to-end’ competitor to Royal Mail. While competitors today collect and sort over 50% of national mail volumes, the suggestion that they could ever threaten to challenge Royal Mail’s dominance is unrealistic for the foreseeable future. Royal Mail is still responsible for delivering 99.9% of all mail. The huge cost of setting up the infrastructure required to mount an end-to-end challenge to its business would deter potential investors.


The CWU undoubtedly understands this, too. It also presumably understands that if it was to act on its threat, it would lead to a breach of the employment contracts of its employees, as well as a breach of the law. So, why is the CWU threatening this action? Well, it could be because the union is fully opposed to the privatisation of Royal Mail and is seeking ways to disrupt the process and deter would-be buyers.

The most immediate effect of threatened ballot action is to hit Royal Mail’s bottom line. DSAs are responsible for handling a significant portion of commercial, direct and transactional mail. As the number of letters being sent by people has dropped massively in the last 10 years, Royal Mail is developing new profitable revenue streams. Indeed, just three months ago in November Royal Mail’s chief executive Moya Greene announced that direct mail is now worth £1bn to the company and it is looking to increase this business. The threat of refusing to handle competitors’ mail could have the effect of driving down direct mail volumes as companies could shy away from using the medium for their marketing to mitigate potential risk. Furthermore, competitors could be prompted to look to alternative delivery options. Both outcomes would have the effect of driving down revenues.

While the CWU’s proposed action is unlikely, just maintaining the threat of balloting is sufficient to damage the direct mail industry. Uncertainty about what might or could happen will unsettle firms that use direct mail as part of their marketing mix, and potentially drive them from using the medium all together. This is another threat the industry could do without; rising costs and the rise of digital marketing have conspired to chip away at what was once the pre-eminent direct marketing channel.

There is too much to lose – to UK businesses, industry and the economy – if the immediate future of direct mail is put into jeopardy. The DMA will work with postal regulator Ofcom and Royal Mail to protect the industry and businesses that could stand to be the unintended victims of the CWU’s actions.

- Mike Lordan, chief of operations, Direct Marketing Association

[DGP1]

Maybe if they paid a correct amount to get all their crap delivered then there wouldn't be a problem, really they should be told that if they aren't paying enough then it won't be going anywhere...............and welcome to the free market

[borgpicard]

I`m all for not carrying they`re crap, i wonder what bullshit they will give their customers

[ziko]

No mention of Europe and there regulations governing our Public service.
Truth is if a Boycott was to go to vote and the outcome which i believe would almost certainly be a Yes vote then all the massive companies using Private mail providers would almost certainly renew there million £ contracts with Royal mail and not with the likes of Dutch owned company TNT or other Private logistical companies who can not provide a full universal service. This would result in a massive amount of work and jobs being created for Royal mail. The Private mail companies are Sh%tting themselves over this one.
CWU you are 10 years to late! but at least at the death your are just beggining to wake up.....

[savo]

Dont worry New Labour will get in and Milliband will give us proles an in/out referendum on Europe.... oh erm, hang on...

[borgpicard]

and when did Lordan, carry any of theis dsa shite anyway ???? :dcfo

[zigimar]

TNT are losing billions a year. They're selling off their Brazillian and Chinese operations and are considering doing the same with their European business.

[TrueBlueTerrier]

TNT are losing billions a year. They're selling off their Brazillian and Chinese operations and are considering doing the same with their European business.

The UPS buy out went south http://www.royalmailchat.co.uk/communit ... PS#p539291" onclick="window.open(this.href);return false;

[krussel]

I aways thought that the DSA agreement was to allow private companies like TNT a temp stop gap to allow them time to set up a country wide delivery network.

Of course as we all know they never had any real plans to do this other than riding off our very backs. So this now puts them in a very awkward place with their customers because if we refuse to handle it they are totally SCREWED. Where are the customers going to go to get the mail delivered. Lets see how about the very people that are doing the actual work.

Yes no doubt we will get fined from Ofcom but it will highlight the issue and show who in fact is holding all the chips.

[Sharkeyes]

Maybe if they paid a correct amount to get all their crap delivered then there wouldn't be a problem, really they should be told that if they aren't paying enough then it won't be going anywhere...............and welcome to the free market

Exactly! Fair pay & play.

[Sharkeyes]

No mention of Europe and there regulations governing our Public service.
Truth is if a Boycott was to go to vote and the outcome which i believe would almost certainly be a Yes vote then all the massive companies using Private mail providers would almost certainly renew there million £ contracts with Royal mail and not with the likes of Dutch owned company TNT or other Private logistical companies who can not provide a full universal service. This would result in a massive amount of work and jobs being created for Royal mail. The Private mail companies are Sh%tting themselves over this one.
CWU you are 10 years to late! but at least at the death your are just beggining to wake up.....

Oh so true, your spot on.

[Sharkeyes]

No mention of Europe and there regulations governing our Public service.
Truth is if a Boycott was to go to vote and the outcome which i believe would almost certainly be a Yes vote then all the massive companies using Private mail providers would almost certainly renew there million £ contracts with Royal mail and not with the likes of Dutch owned company TNT or other Private logistical companies who can not provide a full universal service. This would result in a massive amount of work and jobs being created for Royal mail. The Private mail companies are Sh%tting themselves over this one.
CWU you are 10 years to late! but at least at the death your are just beggining to wake up.....

Oh so true, your spot on.

The plain truth is that the EU are pulling the strings of whatever government we have in power except for party that is on the rise and is the ONLY PARTY TO SUPPORT THE PUBLIC OWNERSHIP OF ROYAL MAIL AND THE POST OFFICE AS IT WAS.
UKIP.