Union "pressing ahead" with plans for UK mail boycott

[TrueBlueTerrier]

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A boycott by postal workers of the £1.4bn UK downstream access mail market could come before the autumn, the Communication Workers Union said today.

The union told Post&Parcel today that a vote will be taken at its annual conference next month in Bournemouth, which could pave the way for action later this year.

Although a spokesperson could not give a clear idea of when the blockade of 44% of the UK letters market will take place, she said it would likely be “sooner than the autumn”.

The CWU is applying pressure to the UK’s postal regulator, Ofcom, demanding that competitors taking on the Royal Mail in the last mile delivery market face the same kind of service obligations as the universal service provider.

The union is concerned that private sector mail companies will take over Royal Mail’s most profitable urban delivery routes, making the remaining Royal Mail network financially unsustainable. The CWU is also concerned that last mile delivery competitors like TNT Post UK pay staff lower wages than Royal Mail, and could see pressure on Royal Mail to pay lower wages.

Ofcom issued final guidelines today regarding its monitoring of so-called “end-to-end” competition and its impact on the universal service.

However, the regulator said rather than acting now, it will wait until Royal Mail’s profits are under pressure before taking action to apply controls to the likes of TNT Post UK, which began a last mile delivery service in West London last April.

In response to Ofcom’s final guidelines, Dave Ward, the CWU deputy general secretary, said today: “We are taking action to protect the universal service and will be pressing ahead with plans for a boycott of private downstream access mail unless the regulator takes action to protect the service for all users.”

Royal Mail told Post&Parcel today it was studying Ofcom’s decision in detail, but welcomed Ofcom’s “commitment to actively monitor all direct delivery market participants”.

Monitoring competition

At present Royal Mail delivers almost all UK mail over the last mile, but about 7.2bn of the UK’s 16.4bn letters are collected and sorted each year by private sector operators before being entered into the Royal Mail network for final delivery – in a system called Downstream Access.

It is this Downstream Access mail, including around 75% of the UK’s bulk mail, that CWU members are threatening to boycott.

Royal Mail’s competitors have largely been priced out of providing last mile delivery because the universal service provider does not have to charge VAT. However, last year rivals TNT Post launched a trial in West London where it is attempting to mount a last mile challenge to Royal Mail.

By December, the rival service was delivering about 345,000 letters per week, about 0.13% of the relevant market by volume according to Ofcom.

Ofcom’s guidelines today stated how the regulator will monitor TNT Post – and other potential last mile competitors. Associated documents noted PostNL’s recently-stated ambitions to roll out end-to-end mail services across the UK.

The regulator said it will only act to impose additional constraints on competitors if Royal Mail’s profit margin falls below a 5-10% level before tax – and assuming that Royal Mail is meeting its efficiency targets.

According to the latest financial results from Royal Mail, issued last November, the company’s operating margin was about 3.3%. A spokesman for Ofcom said that although this was not yet in the 5-10% threshold, the regulator is assuming that the company soon will be.

“They are not in that range now, but we assume they will be within the short to medium term,” said the Ofcom spokesman. “We’ve given them commercial freedoms and they have the pricing authority they need, so we are taking a view that they will soon be meeting this threshold. We will be monitoring the market like a hawk – and not just Royal Mail – so if there is any evidence that they are not meeting the threshold, we can potentially intervene.”

Intervening could see Ofcom requiring that TNT Post deliver six-days per week, meet delivery quality standards or even face pricing controls. The company could also be required to pay into a fund to support the universal service.

Ofcom’s spokesman said even if Royal Mail’s financial performance is not seen to be under pressure, it will carry out a full review of end-to-end competition within two years.

Union


CWU general secretary Billy Hayes said if competition leads to “poverty pay”, it could affect delivery quality
The CWU, which represents around 134,000 staff in the mail industry, said the documents accompanying Ofcom’s new guidelines showed that end-to-end competition could apply pressure to postal staff pay and conditions.

The union pointed to views from TNT Post, within Ofcom’s consultation, suggesting it believed Royal Mail needed to look to alternative employment models, and that Royal Mail was wrong to see its costs as relatively fixed in relation to efficiency efforts. The paragraph of concern in the Ofcom report also included a proposal from consumer group Consumer Focus that Royal Mail’s operating costs be benchmarked against its private sector rivals.

The union said the “deeply concerning” arguments suggested eroding workers’ pay levels as an answer to improving service efficiency.

Billy Hayes, the CWU general secretary, said: “The case for low wages and a race to the bottom have surfaced in black and white in submissions to this consultation.

“It’s a shocking and deeply worrying development which exposes exactly what these people mean by competition – they mean poverty pay and a race to the bottom on terms and conditions which would inevitably hit quality of service for customers.”

A vote on the Downstream Access boycott is expected to be taken on 23rd April at the CWU conference in Bournemouth.

[Phantom]

Another vote? its been done already in liverpool? ballot the members and f***ing get on with it........FFS talk about pissing about

GET ON WITH IT!!!

[UnhappyGremlin]

However, last year rivals TNT Post launched a trial in West London where it is attempting to mount a last mile challenge to Royal Mail.

No they're not. They're attempting to set up systems in cities/town centres only where they can have a chance of sustaining a full end to end system, they have zero intention of delivering to rural areas, or even anything anywhere near rural. There wouldn't be any profit in for them. Plus if they did, they would end up with the same constraints as RM, one price fits all, paying into USO fund/regulator etc, which would make it even harder for them.

Cannot, ever, see anyone/any company trying a full, country wide end to end delivery system. No money in it for them. Especially taking into account the vast set up cost that would be required.

[britwrit]

How would a boycott work? I'm in a mail centre. When I'm sorting letters, do I shriek and run away from the frame every time I see that TNT postmark?

[fishtank]

How would a boycott work? I'm in a mail centre. When I'm sorting letters, do I shriek and run away from the frame every time I see that TNT postmark?

I think the idea is that it doesn't make it as far as the sorting process.

[Phantom]

We're having a vote to vote on having a vote.......ZZZZZZzzzzzzzzz

[dvbuk55]

How would a boycott work? I'm in a mail centre. When I'm sorting letters, do I shriek and run away from the frame every time I see that TNT postmark?

I think the idea is that it doesn't make it as far as the sorting process.

Which, in theory at least, it would never reach a delivery office at all, though we've yet to see the implementation.

[barrowc]

The first person in RM to have any contact with a DSA carrier will be the gatekeeper who should be checking that the van and driver are on the authorised list for that carrier before letting them in. Alternatively, if the gatekeeper lets the vehicles in, the DSA carriers unload their vehicles and it's then whichever staff are asked to bring the mail into the building who are in the firing line.

If we have the usual suspensions followed by a mass walkout then the union are going to have to make it clear what they want to achieve from all of this

[TrueBlueTerrier]

This is my own personal opinion but unless something goes badly wrong with this campaign I don't think ANY OPG anywhere in the pipeline will be affected or be expected to potentially "sacrifice" his job for the Union.

Again in my own opinion I think there are machinations and plots going on behind the scenes and although it isn't just sabre rattling, the effect is just the same . I think a lot of noise is being made but nothing will be expected of us.

[fishtank]

I agree with you TBT.
I think the industrial problems,pension problems and pay issues will overtake the boycott idea.
I afraid I think the boycott threat,if not driven by Royal Mail was certainly in their interest more than it was ours.
I think that has been shown by their lack of any real response to the threat.

Ofcom certainly don't appear to be in the mood to move over regulation,threat or no threat.

[borgpicard]

we need to do it now !!