THE IMPACT OF DIRECT DELIVERY COMPETITION ON PARCELS, PACKET

[TrueBlueTerrier]

Letter to Branches




No:513/14
Ref: 21003
8th August 2014

To: All Branches with Postal Members


Dear Colleague

THE IMPACT OF DIRECT DELIVERY COMPETITION ON PARCELS, PACKETS AND LETTER VOLUMES

In recent weeks the Union and Royal Mail’s senior management team have exchanged views and information about the growing impact of direct delivery competition on parcels, packets and letter volumes.

During these exchanges the Union has raised its concerns about the approach Royal Mail are taking to address volume decline in some areas.

In particular, we have told Royal Mail that whilst CWU is prepared to tackle the immediate efficiency challenge from volume decline, this cannot be done on a ‘business as usual’ basis or purely on Royal Mail’s terms. Instead, CWU want a properly coordinated approach and an agreed package of measures that is mutually beneficial and tailored to meet joint concerns.

The information received from the company appears to show that the picture is not the same across the United Kingdom. In areas where TNT are already operating and/or Amazon have commenced their own delivery operation, there appears to be a significant drop in volume that goes beyond seasonal variations. In other areas Royal Mail are reporting that traffic remains stable and that in some locations there is evidence of growth. Information gathered by CWU from our own Branches and representatives in the high impact areas, generally supports Royal Mail’s view that there has been a significant drop in most traffic streams and that this goes beyond what normally happens during the summer.

There is no doubt that market dynamics are changing quickly. We are seeing the rapid expansion of TNT and increasing E-substitution in the letters market, whilst at the same time competitors are increasing their own capacity in the packet and parcels market, alongside Amazon commencing their own delivery operation. How Royal Mail and CWU respond to this is the first real test of the Agenda for Growth Agreement.




In a letter to Royal Mail of the 21st July, CWU National Officers made it clear that we are prepared to prioritise these issues in high level talks, but we stressed that the required response needs to be measured and balanced in line with the commitments made in our recent National Agreement. For the Union this means that as well as tackling efficiency issues, the company must do a lot more in showing the workforce that it has a serious strategy for investment in growth and we have also argued that the company needs to take a stronger position with the Regulator to intervene on unfair competition. We have also told the company that we must now quickly finalise the commitment to introduce new incentive arrangements.

Following two recent meetings with Royal Mail the company formally responded in a letter dated 4th August, accepting that the current situation cannot be dealt with as ‘business as usual’ and that we need to agree nationally a package of measures to address volume decline in selected units and for this to be rolled out in a controlled way utilising our IR Procedures.

On incentives, Royal Mail’s letter confirms that they are willing to quickly finalise new incentive arrangements, but they also repeated their view that it is difficult for them to generate incentive payments when they are adrift of some of their business targets.

Finally, their letter confirms that Royal Mail’s senior management team will be writing to all managers emphasising that despite current difficulties they must abide by our agreements and IR Procedures.

Next Steps

The current situation is that both parties have agreed to continue talks on a package of measures and the next step will be to jointly identify and agree the areas that require immediate attention.

For the Union’s part we will be ensuring that any package of measures to address volume decline is balanced and reflects the reality that the situation is not the same everywhere. We will also be testing the validity of Royal Mail’s information and monitoring the traffic situation as we move towards the end of the summer period. As part of these talks we will also be insisting that the commitment to introduce new incentive arrangements is met and that we agree a clearer plan for investment in growth strategies, products and services.

Further information will be provided on these national talks in due course. In the meantime, please ensure the content of this LTB is circulated to all representatives and workplaces and that these important issues are discussed at Branch meetings.




Any enquiries on the general content of this LTB should be addressed to the DGS (P) Department; any specific functional enquires to the relevant Assistant Secretary.

Yours sincerely




Dave Ward Peter Donaghy
Deputy General Secretary (Postal) Acting Assistant Secretary





Mark Baulch Terry Pullinger
Acting Assistant Secretary Assistant Secretary

[k979aaa]

More tea and biscuits please oh yes some cake Moya PLEASE! No wonder we are f****d with leaders like this the white flag and crumpet in hand brigade sorry I've had enough of this dagger in cloak brigade! Time was once we all believed in our union not now no one does anymore times change and our union needs change look after those who pay your wages not those who give you tea biscuits and cake and an easy life!

[Newbie001]

Keep hearing about this decline of packets. Do lot's of different rounds and struggle to finish on time most days because my bags are almost always full of packets. Must be doing something wrong.

[Cut Off King]

How about we have another "Joint Statement "

That always seems to work

[bennny7]

back to push bikes

[TheBushBaby]

I have no problem in the business and union jointly identifying savings. I do however have a problem when Royal Mail act unilaterally and take action alone. It is frustrating for my Branch when the Managers are already acting unilaterally and outside of national agreements. I congratulate my branch at Greenford in particular the distribution reps who have made deals with regards to staff not being dismissed and then when the rep is on holiday the Mangers dismiss the person concerned. The reps have now said no more savings until they are reinstated as agreed, now the Managers want to talk business, but they won't be getting a second in savings.