Splitting of Royal Mail operations proposed

[TrueBlueTerrier]

Its been discussed on here before but now its being mooted in public.

http://www.ft.com/cms/s/0/b0583dfa-c48a ... ck_check=1

ByBy John Willman, Business Editor

Published: January 17 2008 02:23 | Last updated: January 17 2008 02:23

Royal Mail’s postal operation could be split in two under proposals put forward by the postal regulator to increase competition and reduce the burden of regulation.

Postcomm has written to all postal operators, organisations representing mail users and Postwatch, the consumer watchdog, asking them for their views on five options for regulating the industry from 2010.

Two of the options involve the principle of “wholesale equivalenceâ€

[combocrasher]

That is a sure fire way to destroy whats left of this public service,

[DGP1]

Surely POSTCON should be making everybody deliver what they collect not just using RM to help all the competition ( ) make a bigger profit.


Create a level playing field by making everyone deliver.

[norbert]

Surely POSTCON should be making everybody deliver what they collect not just using RM to help all the competition ( ) make a bigger profit.


Create a level playing field by making everyone deliver.

I've been through Sectorisation , then Shadow Privatisation , there'll be staff on here who can tell similar stories , and all you get is more Managers , jobs for the boys , these "Managers " trying to justify their jobs and trying to impress people . Then -quell surprise -it's suddenly decided they can't afford this Army of Managers .

The Sectors don't work together well-well I never ! , you end up with a blame culture and even more complication and politics . It is a underhand way of getting Privatisation in . Stephen Byers wanted that , saw the CWU as a obstacle , so you do things by stealth .

[DirtyHarry]

With this utterly incompetent middle class ruling clique we have, things can only get worse.

[billyb8]

This story has been round the block so many times.

Remember the letters, parcels and counters split?

And the delivery, processing and distribution fiascos.?

What next? Buy your own delivery or collection?

[TrueBlueTerrier]

This story has been round the block so many times.

Remember the letters, parcels and counters split?

And the delivery, processing and distribution fiascos.?

What next? Buy your own delivery or collection?

Franchises - I can see it coming at some point in the future. Not too close though please,

[norbert]

This story has been round the block so many times.

Remember the letters, parcels and counters split?

And the delivery, processing and distribution fiascos.?

What next? Buy your own delivery or collection?

That's what Postcon want ,selling licences for £50 , they'd a article in the Voice ages back about it , Dodgy Dave and his White Van Eh? , washed up Tory Freemarketers , on a different planet

and this is going to be the transport ?
and this fella running the PO in the pub ?

[jemima]

The real difficulty that would arise from the splitting of deliveries and collections is that the resulting vehicle journey duplication would result in greatly increased carbon dioxide emissions. That fact must override all business considerations unless we want to risk making our world unliveable. That would also be my main argument for not encouraging the duplication of distribution/delivery networks. (And for making sure that the RM network we have is efficient.)

Competition is all very well, but there are plenty of other less environmentally damaging business sectors available for business men and women to compete in. A moratorium on mail sector competition, for the time being, would be advisable, I think.

When proven environmentally neutral vehicles are readily available, then mail competition won't be harmful. For now, it's damaging our future.

[F0zziebear]

The issues you raise seem valid, until you look at other privatised models.

The Gas pipeline has not been duplicated, instead different companies rent parts of the pipieline.
Various telecoms companies rent part of BT's network and sell it as different packages.

This is the plan for Royal Mail. Essentially the pipeline will be owned by a private company called let's say (Royal Mail). Companies then buy capacity in advance (as they will know what volumes companies want to post and to where). The further in advance the better the rate. Royal Mail can then plan in detail how large or small to make the pipeline. E.g. size of vehicles, numbers of staff etc....

There will be wholesale and retail just as you have in the gas and telecoms sectors. So the wholesale will buy large chunks, which provides the baseload to allow fixed delivery routes most of the time. The retail prices will obviously be higher as you are buying only a few items here and there. This price will have to be fixed most of the time as we currently use stamps, which have a certain value. One assumes that in the future if we get rid of stamps then we could vary the retail price more often.

It is highly likely that the current duplicate distribution networks will eventually merge, as is happening currently in the telecoms industry.

That;s enough for now, but visions like this will go into Postcomms consultation document for what the postal industry will look like in the future.

FRanchised depots are quite possible. There is no reason for example for a group of posties to get together and buy their depot and run it themselves. You do go about how you could run the place better in you were in charge, or if your friendly dims, dums and whatnot weren't about, well your chance may not be so far off.

Main barriers, unions, public perception, government wariness about doing it will influence how quickly or otherwise this happens.

Curious to know people's feedback

F0zz

p.s. I have absolutely nothing to do with this industry so don't be thinking that i will be taking opinions to Postcomm or to anywhere else ;-)

[pcb]

I believe that the splitting of the Logistics from the service delivery will happen due to Postcomm delivering the split and partial privatisation of RM for the government. Postcomm will of course put a price on this and it will come in the insistance that the private companies give a certain amount of money for the USO. This will then ensure that CWU sponsored MPs will not be able to question the government on the issue of a universal service for the country, because the USO is still in operation. Smoke and Mirrors.

[BELIAL]

Nice idea ,Workers buyouts of delivery offices,organised as a national co-operative. Drop the Royal, call it Peoples Post.
Run it as a non profit making coop with all surplus re invested to improve service quality and wages ,conditions,pensions of the membership,apportionment voted on by the membership.

Since the stated aim of govt is to introduce free market liberalisation into the sector then we should be able to set our prices to our customers ie RM Tnt.... at a realistic level, if they don't like our prices they could switch to a rival delivery network. As an independent business we would of course be free to persue an aggressive marketing strategy to maintain market share.

We could even follow the power companies example and with heartfelt remorse announce a 17% price increase because our people cost more

[F0zziebear]

In theory a People's Post run co-operative style could be set-up. For example you could win contracts, send them through whichever company you wanted and deliver whatever mail fell on your territory.

I expect a Network Rail situation where they may give out licences for periods of time to run the post in certain areas. This might stifle competition in some areas, but experience suggests that after initial large numbers of smaller start-ups it will be consolidated into a small number of large companies, which has the potential for price fixing (SUpermarkets, airlines etc...)

I expect you will see TNT and DHL for example winning the right to run urban delivery offices for examples, and ROyal Mail or a semi-stated owned company running the rural ones.

Everyone would be expected to contribute to the overall network.

I can't see many companies being able to duplicate Royal Mail's pipeline. We currently have TNT, DHL, Business Post as the only companies with enough financial muscle to invest in rival collections, processing, distribution and delivery. None of them have so far managed to financially break the barrier to being able to offer the complete E2E network, which is why we haven't seen a serious difference in terms of prices, and or products. Until that can be resolved ROyal Mail will stay in tact. THis is not the aim of Postcomm, which explains the consultation period and how they can break this barrier.

Having said that the government may quite rightly be upset that the liuberlaisation of the rest of Europe esp. FRance has not happened, and it further off than expected. Unless this happens as in the Gas, and Telecoms it is difficult to create Europe wide competition.

I would also argue that given the the Government has invested £1.2bn in the modernisation of Royal Mail they would not want a full privatisation until this programme is complete (at least 5 years). Otherwise they wouldn't get a genuine payback on the investment.

F0zz

[jemima]

Lots of licences would mean lots of new companies with lots more managers. And an all-new bureaucratic government layer to deal with the licences. We would have to have increased postal prices to pay for all this, they would of course have to cover the costs of the licences as well as the business operational costs. Ordinary customers would have to pay whatever was asked, and might find themselves subsidising the mailing costs of businesses whose directors liked to play golf with the new mail companies' directors. A small co-operative organisation would be a prime target for hostile business practices, in that system. I don't think I'd want to have any part in that. Also, with every company being able to blame another company's section of the route if cross-country mail was lost or delayed, standards would fall and chaos would prevail.

I suppose people are used to that sort of thing by now, since it's what the railway companies do. Perhaps the introduction of randomness makes life more exciting.... perhaps it's a new 21st century lifestyle which I haven't yet learned how to appreciate.... but I've given up travelling by rail if it's important that I arrive on time.

RM, despite its problems, provides a reasonably-priced, reliable public service. It's a government asset; it could make a lot of money if the pricing restrictions were relaxed to make the charges comparable to the Western European average. Would even Gordon Brown be foolish enough to throw RM away? Possibly. He's just paid to save Northern Rock with taxpayers' money, and he's about to give that away. I'd have thought that to nationalise it and operate it through the Post Office network would bring a better financial return on his investment. He must be prioritising the art of networking and buying friendships. If his new friends want mail businesses, he'll see that they get them.

[BELIAL]

Lets introduce a small amount of perspective into this debate.
1.2 bn pounds lent at a commercial rate to a national service.
Northern Rock 56+ bn pounds of public funds commited overnight with no guarantees of repayment to secure confidence in something tangible? no £56bn to secure debt, nothing