Time to ditch the DSA agreement.

krussel · Post by **krussel** » 28 Jun 2020, 13:13

With the recent announcement that we are now losing money hand over fist is it not about time we finished the DSA agreement and once again retained the full price for our delivery services. Lets be honest the DSA was supposed to help other companies set up and start their own service. That is simply never going to happen whilst they can ride on our backs. Now post Brexit as well.
RM seem to have forgotten all this, its never mentioned and they are trying to save money by cutting costs and jobs from within.

Post by **Munchboii** » 28 Jun 2020, 13:18

Yes it needs to go. Asap. Should be easy enough why is it the German and Dutch postal services have so much influence over ours. It's a disgrace

Post by **wacko74** » 28 Jun 2020, 13:34

Isn't DSA something that was imposed on us under some EU competition directives?

Not sure how beneficial it would be to regain that work now anyway given that we've been gradually removing our various WSM machines that we paid millions of pounds for in the first place

deltaforce · Post by **deltaforce** » 28 Jun 2020, 13:36

Munchboii wrote:Yes it needs to go. Asap. Should be easy enough why is it the German and Dutch postal services have so much influence over ours. It's a disgrace

You’ll have to convince the regulator over that. DSA was introduced to bring choice to the bulk posters in the market I’m not sure why other postal operators would have an influence over ours.

Woody Guthrie · Post by **Woody Guthrie** » 28 Jun 2020, 13:46

Approximately 65% of letter volume is DSA.
Royal Mail no longer has the capacity to deal with that 65%.
The business has actually made a great deal of money by reducing that capacity and selling off the relevant real estate.

What they certainly don't want to do is re-invest in what is by all accounts a dying revenue stream.

And no, DSA was not imposed on us by the EU, "fair competition" was imposed on us by the EU. The way it was implemented is the fault of successive governments and Royal Mail boards. Very few EU countries have opened up their postal markets in such a self destructive manner. We're special.

Post by **SpacePhoenix** » 28 Jun 2020, 14:23

wacko74 wrote:Isn't DSA something that was imposed on us under some EU competition directives?

Not sure how beneficial it would be to regain that work now anyway given that we've been gradually removing our various WSM machines that we paid millions of pounds for in the first place

Wouldn't make any difference as DSA enters the network at the Inward MC who will either sequence the mech letters or one of their MPUs would. I don't think there'll be any MPUs left by the end of the year.

wallan · Post by **wallan** » 28 Jun 2020, 14:45

When there is no profit in Handling DSA Items , the companies involved will simply close that side of there business

Woody Guthrie · Post by **Woody Guthrie** » 28 Jun 2020, 14:53

wallan wrote:When there is no profit in Handling DSA Items , the companies involved will simply close that side of there business

What they'll do first is swallow each other up and go for economy of scale.

Eventually they'll just be one shark left in the tank and it might eat us last.

Post by **Munchboii** » 28 Jun 2020, 15:07

Direct mail advertising is always going to be a thing let's be honest. One way or another whether its 3 or 5 days a week royal mail will still exist

wallan · Post by **wallan** » 28 Jun 2020, 15:13

Agreed , when it comes to Collection & Outward Processing , when it comes Inward Processing & Deliveries No

cpsteve · Post by **cpsteve** » 28 Jun 2020, 15:41

From day one of privatisation the top people should have made their number one aim to charge the going rate for delivering the DSA mail that is still the case as there is no chance of anyone else delivering the service we have to.

Woody Guthrie · Post by **Woody Guthrie** » 28 Jun 2020, 15:49

We do charge "the going rate".

The problem is the going rate isn't very much and if you increase the going rate what happens is the companies that send the stuff out look for other options.

It's not the DSA companies that drive what we can charge them, it's what they can charge their customers.

Woody Guthrie · Post by **Woody Guthrie** » 28 Jun 2020, 16:01

This is how it works.

The DSA companies can charge less than we can because their systems are completely automated and what staff they do have are poorly paid compared to us.

As the DSA companies are already running on tight margins they cannot afford to absorb any increase in what we charge them without passing it on to their customers.

If they increase the cost to customers with the letters market and economy so fragile what will inevitably happen is a lot of these customers will look at other options like online billing, appointments and advertising because you're making it look less attractive to send out physical letters.
Instead of driving up our revenue you're actually driving it down.

In order for us to take back this kind of business in house and be competitive we would have to invest in the kind of fully automated cut price operation the existing DSA companies have and that would almost certainly be a separate business with a second tier workforce.

Be careful what you wish for.

Celgar · Post by **Celgar** » 28 Jun 2020, 22:58

Woody Guthrie wrote:Approximately 65% of letter volume is DSA.
Royal Mail no longer has the capacity to deal with that 65%.
The business has actually made a great deal of money by reducing that capacity and selling off the relevant real estate.

What they certainly don't want to do is re-invest in what is by all accounts a dying revenue stream.

And no, DSA was not imposed on us by the EU, "fair competition" was imposed on us by the EU. The way it was implemented is the fault of successive governments and Royal Mail boards. Very few EU countries have opened up their postal markets in such a self destructive manner. We're special.

As I understand the way DSA works the other companies just collect the letters then drop them at the nearest RM MC. So its not a case of capacity as we already do the majority of the work involved. They just undercut us on the contracts. Its like the supermarkets selling stock for less than its worth or diddling their suppliers.
The major difference, or discrepancy, is that we do the majority of the work but receive only half of the revenue. As a direct result our prices have had to rise exponentially over many years which has made us even more uncompetitive in certain categories of mail.

Post by **SpacePhoenix** » 28 Jun 2020, 23:12

It's not just letters and flats that go DSA. Next time in your DOs if you're on the primary packet crash, just take a look at the amount of packets that are coming through as DSA