RMl's Moya Greene should stop whinging and start delivering

[TrueBlueTerrier]

Royal Mail's Moya Greene should stop whinging and start delivering

The universal service obligation is a privilege which in the right hands would be hugely valuable, not the curse Royal Mail pretends

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Even the name – universal service obligation – implies an unwanted burden. And that was certainly the thrust of Moya Greene’s complaint this week when, little more than a year after Royal Mail was floated on the stock market, she unveiled a 21pc fall in first half operating profits.

“Unfettered” competition from Amazon and other home delivery upstarts was hurting the company’s ability to fulfil its “universal service obligation”, the Royal Mail chief executive protested. The industry regulator, Ofcom, was urged to act accordingly.

I have to say that this is one of the most ill-judged business complaints I’ve heard in a long time. That so soon after entering the private sector, Royal Mail should go running off to regulators to complain about unfair competition is frankly pathetic, and should send out the strongest signal of concern about the postal service’s ability to prosper as a proper company now that state protections have been removed.

By all accounts, Ms Greene is a formidable chief executive who achieved great things in preparing her company for privatisation. Many had tried before; nobody had succeeded. Indeed, up until her arrival, the company had been widely thought unsaleable, and not just because of its pension liabilities, an obstruction easily removed merely by leaving them with the taxpayer.

There was also the problem of a still fiercely militant workforce, deeply resistant to change in an age where the internet was transforming the way people communicate. And then there was of course, deregulation, which was fast eating into the Royal Mail’s traditional monopoly.

Full marks, then, for achieving the seemingly impossible. Part of the reason for privatisation, however, is to galvanise change and boost efficiency. Since entering the private sector, Royal Mail has fallen woefully behind in meeting its own targets for modernisation and improvement.

As for increased competition, well, this has hardly come out of a clear blue sky. Everyone knew about it at the time of flotation, and the prospectus warned about it in terms. It was one of the reasons why the stock was priced at what came to be seen as a scandalously low level. That investors later foolishly chased the shares all the way up to 615p, with many now suffering painful losses, is entirely their look out. To the no doubt quiet satisfaction of Vince Cable, who has had it in the neck for apparently underselling the company, the original flotation price now looks about right.

The universal service obligation is not the burden Royal Mail pretends, or rather wouldn’t be for any company with the nous properly to exploit it; rather, it is a privilege, a precious national asset which needs constant reinvigoration. There is no other company in Britain with the ability to collect, sort and deliver the length and breadth of the country. It beggars belief that this unique capability should in some way be regarded as a ball and chain.

To be fair, the main complaint is of course not the obligation as such, but the single price of delivery, and the fact that rivals have no such obligation, allowing them to cherry pick the most profitable, low cost business. Ms Greene wants obligations imposed on them too. You can see why, because if they were, many would pull out of the market altogether and you’d end up with virtually no competition at all. This would be the worst possible outcome, for competition is what’s driving change and improved efficiency at Royal Mail. Already it has forced the posties to reintroduce Sunday deliveries.

As it is, the competitors are still a small proportion of the market. As and when they get to critical mass, Ms Greene may or may not have a case. In the meantime she should stop whinging and start delivering. Complaining to regulators is what business losers do.

[5plusbonusball]

Not enough deliverers and too many staying indoors every day wasting cash. sort it.

[rainbowwarrior72]

Damn straight I agree wholeheartedly and it might have helped Moya that this government wanted RM privatised. Stop the whinging Moya and lets make the best of it. You told us that we were prepared for life after privatisation. Well as normal its us the foot soldiers are but our generals are still waking up from their champagne breakfast

[Budfrog]

Damn straight I agree wholeheartedly and it might have helped Moya that this government wanted RM privatised. Stop the whinging Moya and lets make the best of it. You told us that we were prepared for life after privatisation. Well as normal its us the foot soldiers are but our generals are still waking up from their champagne breakfast

Couldn't have put it better myself.