Royal Mail set to be part-privatised - 20th May 2010

The Royal Mail will be part-privatised under new government proposals put forward by business secretary Vince Cable, with the nation's 12,000-strong Post Office network set to stay state-owned with only the infrastructure placed out to tender.

As part of the latest coalition agreement document, the government stated that it would seek "an injection of private capital" in Royal Mail.

However, it did not make it clear when the sell off would happen, the size of the stake up for grabs or the price that it would be seeking from private investors.

In results announced today, Royal Mail increased its operating profit by £83m in the last financial year to £404m, a boost of 26%, despite the impact of several strikes by postal workers during the period.

However, the volume of UK mail has fallen by 7.3% in the past year, with the average daily mail bag containing around 71 million letters, packets and parcels.

Royal Mail put its profits growth down to increased efficiencies and continued modernisation throughout its network, efficiencies that the Communications Workers Union linked to the 8,000 jobs that have been cut by the organisation during the last financial year.

Group revenues dipped to £9.3bn, although all four of the Royal Mail's businesses - Royal Mail (UK letters), Parcelforce Worldwide (UK parcels), General Logistics Systems and the Post Office - returned a profit.

Royal Mail also announced that it had already spent three quarters of the £2bn investment money it had set aside for modernisation.

Royal Mail chairman Donald Brydon said: "These are good results achieved against a backdrop of harsh economic conditions and the relentless reduction in the number of letters sent by customers, not just in the UK but around the world.

"The strikes called by the CWU in 2009 clearly had an adverse effect on Royal Mail Letters and I am delighted that the recent ballot of union members endorsed the agreement struck between the group and the CWU, which will allow for still further progress towards our modernisation goals and help us to protect the universal service while providing a fair reward for our people and recognising the important role they play in achieving the transformation we so urgently need."

At the beginning of this year Royal Mail lost chief executive Adam Crozier to ITV when he took the position of chief executive at the broadcaster.

Source : Brand Republic

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Royal Mail to launch new Mailsort produc - 26th April 2010

Royal Mail have today announced that they are planning to launch a new Mailsort product which was recently the subject of a Postcomm industry consultation. Dependant upon the outcome of the consultation, this product will provide significantly fewer selections to be sorted to than the current Mailsort products (at launch it will have circa 85 selections). It will also require presentation of mail in trays rather than bags - offering improved operational efficiencies, better mail hygiene, and greater cost savings for our customers. A move towards mail presentation in trays is a ove for the better for everyone concerned in the mail supply chain.

Source : Royal Mail


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Pay and Modernisation Deal Agreed - 8th March 2010

A deal has been reached to settle the long-running dispute at Royal Mail over pay and working practices which led to nationwide strikes last year.

Staff will receive a 6.9% pay rise over three years and full-time workers will get extra payments worth up to £1,400 when all agreed changes have been made.

In exchange, the union representing postal workers has agreed to the use of new machinery and working patterns.

Royal Mail said it could now "get on with its modernisation".

Members of the Communication Workers Union (CWU) will now be balloted on the agreement.

The deal follows lengthy discussions between Royal Mail and the CWU.

"It's been a long time coming, but this deal delivers on the major issues which postal workers have fought for," said David Ward, CWU deputy general secretary. "There's a balance of pay and operational changes which will help offset job losses and ensure our members are fairly rewarded for change."

Pay increases

Postal workers will receive a 2% pay increase this year, followed by a 1.4% pay rise in 2011 and a 3.5% rise in 2012.

They will also work shorter hours - down from 40 to 39 hours a week - and the Royal Mail has agreed to retain at least 75% of the current workforce.

Bonuses worth £1,400 will also be paid to full-time workers following the agreement of union members and the implementation of the planned changes.

Gregor Gall, Professor of Industrial Relations at the University of Hertfordshire, told the BBC that he would expect union members to vote in favour of the agreement.

"They are getting some money up front while they have also got some control over the process of change," he said.

However he added that changes could still face some opposition when they are implemented at a local level.

'Crucially important'

The BBC's business correspondent John Moylan said that the introduction of new sorting machines as part of the planned reforms is likely to lead to significant job cuts.

Concerns over job losses have been at the heart of the dispute, which resulted in the union calling nationwide industrial action last year.

While the union agreed cuts were necessary for Royal Mail to modernise, it claimed the company had not been open enough about the nature of those changes.

Royal Mail has consistently argued that changes were vital as its core business of delivering letters and parcels is declining by 10% every year. The group also has a £6.8bn pensions deficit.

"This is crucially important in allowing Royal Mail to compete successfully in the highly competitive communications market and to help counter the effect of the ongoing decline in traditional mail volumes," said Mark Higson, managing director of Royal Mail Letters.

"It enables the business to rapidly complete the introduction of the latest-generation sorting technology and new delivery methods to improve efficiency."

Source: BBC News

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Royal Mail and Union Close to a Deal - 3rd March 2010

Royal Mail and the postal union have struck a provisional deal which could end a long-running row over jobs, pay and services.

If approved, the deal could provide relief for workers, bosses and the public

It is understood the draft agreement will be submitted to the executive of the Communication Workers Union for approval this week.

The dispute led to widespread walk-outs by staff in the run-up to Christmas, crippling the UK postal system.

It centres upon the company's modernisation plans - a concept the union has always supported, though the two parties have disagreed on what shape these plans should take.

Around 60,000 people have left the company since 2002 and both Royal Mail and the union agree more jobs must go as new technology is introduced.

But Sky News business correspondent Joel Hills said there had been ongoing disagreement on the level of job cuts required and the kind of workload and pay the remaining staff should expect.

Hills said some areas of contention remained but the parties had found enough common ground for the CWU to put the draft agreement to its 17-strong executive for approval in the coming days.

Royal Mail is keen to do a deal as quickly as possible as it strives to remain profitable.

The CWU is believed to be equally keen for a prompt settlement as it wants to come to an agreement with a Labour Government about the company's huge pension deficit - now estimated to have reached £10bn.

Hills added: "It does look as if some sort of negotiated settlement is in the offing and certainly progress has been made since the tail end of last year, when there were five days of industrial action."

Source: Sky News Online


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Royal Mail Falls Short on Quality - 2nd March 2010

The Royal Mail missed its quality of service targets at the end of last year, new figures have shown.

Deliveries fell short as the Royal Mail was disrupted by a series of strikes.

In the three months to December, 78.8% of first class post arrived the next day, against a target of 93%, while 93.3% of second class letters were delivered within three working days, below the 98.5% target.

The newly-released figures also showed business bulk mail services were below target in the autumn quarter, although targets for European international delivery mail were exceeded by 7.5%.

Mark Higson, managing director of Royal Mail Letters, said: "We are clearly concerned that customer service was disrupted by industrial action, but strike action ended with the interim agreement reached with the union in early November and we are now completely focused on restoring quality of service to the record above target level we achieved in the spring of 2009, prior to the strikes."

The Communication Workers Union held a series of nationwide strikes last autumn in a row over jobs and working practices.

It has been holding talks for several weeks with the company to try to reach an agreement to resolve the dispute.

Nigel Woods, of Consumer Focus, said: "Whether or not these results are down to industrial action, consumers were let down by Royal Mail last autumn.

"The figures are similar to those recorded during the industrial action of 2007-8 and show how important it is for Royal Mail to resolve their industrial relations problems once and for all.

"It also shows that Royal Mail's contingency plans have not stopped severe service disruptions from taking place during strike action.

"We'll be watching the next round of results with interest to see if Royal Mail can recover quicker than previous occasions after industrial action."

Source: Sky News

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Crozier departs Royal Mail for ITV - 29th January 2010

ITV has announced that Royal Mail boss Adam Crozier is to become the broadcaster's new chief executive. It is believed he will be leaving Royal Mail later in the year to take up the position at ITV.

Quite what this will mean for Royal Mail is unsure at this time. Like him or loathe him, Crozier has been at the helm of Royal Mail during a period of significant change, but is likely to move on before the business sees a completion of his modernisation plans. The search for a new CEO for Royal Mail is already underway and will no doubt take some months to conclude. The industry is keen to see further modernisation of Royal Mail and the mail business in general to make sure it maintains itself as a viable media channel in years to come.

Creative Mail Solutions

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Price Rises in 2010 - 22nd December 2009

The price of a first-class stamp will break through the 40p barrier in April, Royal Mail has confirmed.

First and second-class stamps will rise by 2p to 41p and 32p respectively on 6 April 2010, the company said.

The move was expected, with regulator Postcomm announcing in September that it had given approval for stamp price increases in 2010.

However, the cost of a first-class stamp will not go up as much as the 3p rise that the regulator had approved.

Postcomm previously said Royal Mail needed the extra funding to compensate for the continuing decline in mail volumes.

Customer body Consumer Focus said it was disappointed at the rise but "reluctantly accepted" that it was needed, adding that customers "can't keep on footing the bill".

"Unless Royal Mail begin to deliver efficiencies through their modernisation programme and better industrial relations then consumers will rightly start to lose patience with Royal Mail," said Robert Hammond, postal expert at Consumer Focus.

Business mail

The price rises will affect standard letters weighing up to 100g. The increase is higher than inflation, but lower than the rise in April 2009.

The prices for ordinary meter and account mail, largely sent by small businesses, will not increase - remaining at 36p and 25p respectively for standard letters weighing up to 100g, Royal Mail said.

It said that the move reflected the continuing financial losses made by Royal Mail in collecting and delivering stamped mail, which amounted to £250m in 2008-09.

Stamp prices were still lower than the European average, it said.

"Stamp prices remain affordable and represent excellent value for money. Royal Mail continues to offer consumers a more extensive, to-the-door, six-days-a-week service than many European countries and does so at a lower price than most other operators," said Royal Mail's Alex Smith.

"Small businesses who depend on Royal Mail's services to fulfil their customers' orders and to grow their businesses will be helped by our decision to hold prices for ordinary meter and account mail at today's levels."

He added that the move would affect around 12% of mail sent in the UK, and would add around 3p a week to the average UK household's weekly 50p postage bill.

The most recent figures revealed that Royal Mail had an operating profit of £184m for the six months to September, up 4% from a year ago.

Revenues for the half-year fell £73m to £4.58bn, hit by the continuing decline in mail volumes and the recession.

Royal Mail said its letters business had seen volumes fall to 72 million items a day, down by three million from last year.

But profits were made in all four businesses within the Royal Mail group: the Post Office, Royal Mail Letters, Parcelforce Worldwide, and its European parcels business GLS.

Source : BBC

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Deutsche Post no longer VAT exempt - 18th December 2009

Royal Mail rival Deutsche Post will soon no longer be exempt from VAT in Germany, it has been announced - a move that could see it lobby the UK government to apply the same rules to its mail business in the UK.

Rivals of Royal Mail have long called for the exemption to be removed, citing it as an advantage for its position in the mailing market, reports Hell Mail.

And if Deutsche Post was no longer exempt from VAT, the mail operator could call on the government to treat Royal Mail, the company it was once rumoured to be buying into, by the same rules.

Last month, Royal Mail was informed by HM Revenue & Customs that it would have to charge VAT on the majority of the business deals it tenders for, following a European Court of Justice ruling.

However, Mailsort 1, 2 and 3, which are used for the Royal Mail's direct mail offering, are not subject to the HMRC ruling as they are price controlled.

Source : PrintWeek

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Profits rise at Royal Mail - 11th December 2009

Royal Mail's operating profits rose 4 per cent in the six months to September despite falling mail volumes and intense competition from rivals such as TNT.

The group said that its modernisation programme, a key reason why postal workers staged national strikes in October, helped boost operating profit by £7m to £184m in the six-month period.

Modernisation includes a walk-sequencing machine, a device which organises letters into the order the postmen and women will deliver them the next morning.

Adam Crozier, the chief executive of Royal Mail, said the profits and improved delivery figures on record in the spring proved modernisation of the letters business was working.

However declines in mail volumes pushed revenue lower, the company said. Mail volumes fell about 8 per cent in the period.

And rivals such as TNT Post UK and UK Mail are gaining share. One in three letters is handled by rival companies, Royal Mail admitted.

The effect of October's industrial action by 121,000 staff is not reflected in Royal Mail's latest figures, but will be felt in those for the second half of the year. On 5 November postal workers suspended strike action until after Christmas.

Source : Marketing Direct

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Royal Mail Sales Starts April 2010 - 2nd December 2009

Royal Mail is to offer advertisers a 20% discount on direct mailings in an attempt to increase use of the channel.

The two-month “DM sale” aims to encourage brands to trial the use of direct mail in their campaigns and encourage existing users to include it in planned activity.

The discount will be available on new and additional mailings sent next March and April over and above the “normal levels” sent in previous years.

News of the offer follows the autumn postal strikes that caused severe disruption to companies’ direct mail campaigns. The actions led many observers to predict Royal Mail, which was already handling about 10% less mail each year before the strikes, would lose customers to rivals as well as hasten a shift from physical mail to email.

Royal Mail media director Mark Thomson says the initiative is a “new approach” for the postal service and brings the channel in line with other media channels that are being “underpinned with incentives”.

“Advertisers and agencies are under pressure to deliver more for less,” he says, adding that he wants advertisers who do not use direct mail “to discover for themselves the benefits” of the channel.

The Direct Marketing Association has estimated that the strike action could have cost businesses £10m in lost, postponed or cancelled direct mail campaigns.

The offer will be on new or additional Mailsort 3 letter volumes as well as the postal service’s sustainable mail product.

Source Source : Marketing Week - Twitter

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Royal Mail VAT - 16th November 2009

Royal Mail has been told that it will soon be forced to begin charging valued added tax (VAT) for many of its services, but not on direct mail because its delivery is price-controlled and subject to regulation.

The postal carrier has been told by HM Revenue & Customs (HMRC) of the decision on VAT, which follows a ruling by the European Court of Justice (ECJ) in a case brought by TNT Post.

Other postal service providers in the UK, including TNT Post, UK Mail and DHL, have to charge VAT at the standard rate.

But Royal Mail has, until now, defended the exemption on the basis that it has to provide the Universal Service, which its rivals do not.

TNT successfully challenged Royal Mail's exemption, on the grounds that it should not apply on commercial contracts subject to a competitive tendering process.

But Royal Mail's direct mail services - Mailsort 1, 2 and 3 - are price controlled and won't be subject to the HMRC ruling.

One postal consultant described the ruling as "disappointing for direct marketers".

"The HMRC proposal doesn't address certain Royal Mail products used by direct mail that are priced controlled, such as downstream access," said David Robottom, a consultant and former head of postal affairs at the DMA. "It's disappointing for the DM industry."

TNT argued that the VAT exemption, granted exclusively to Royal Mail in the UK under EU law as a publicly-owned postal carrier, was anti-competitive.

HMRC says it is "currently in discussions with Royal Mail to establish precisely which of their services will be affected"

Royal Mail would not comment on the VAT issue as "discussions with HMRC were continuing".

The Independent today quoted Madsen Pirie, the president of free-market think tank Adam Smith Institute, saying that Royal Mail's VAT exemption was anti-competitive.

"The Post Office is uniquely exempt from paying VAT on its services, as its would-be competitors have to," Pirie said. "This means that a rival has to be 15 per cent more efficient to compete effectively - most markets are won or lost on much smaller percentage margins than that."

Royal Mail's VAT exemption and other privileges, such as parking rights in urban areas, have been the target of criticism by competitors since the market was deregulated in 2003.

Source : Marketing Direct

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Strikes Postponed - 6th November 2009

The postal strikes have been postponed today until at least the new year, to allow for fresh talks between Royal Mail and the Communication Workers Union.

Strikes planned for Friday 6 November and Monday 9 November will not go ahead. However, the strike ballot remains in place.

An interim agreement has been reached by the two parties, and ratified by the union's postal executive, allowing time for more discussions to take place.

The interim agreement guarantees that modernisation will be introduced with agreed job security and improved terms and conditions for postal workers as well as addressing other issues raised in the local disputes, the CWU said.

Dave Ward, CWU deputy general secretary, said: "There needs to be exceptional efforts to improve trust and relationships between CWU and Royal Mail. As a result both TUC and ACAS will have a continuing role to keep the discussions and agreement on track."

The deal means that Royal Mail deliveries should be free of any interruption over Christmas.

Source : PrintWeek

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Talks making progress - 5th November 2009

A third round of postal strikes may be avoided, union sources have told the BBC.

The sources said a possible deal was on the table. Royal Mail is not commenting on the speculation.

The latest planned industrial action, scheduled for Friday and Monday, would be more disruptive than previous rounds as it would be an all-out strike.

At the heart of the dispute is union concerns over the extent of job cuts, and conditions for staff who remain.

Thursday's meeting includes the Communication Workers Union's (CWU's) Postal Executive - the union body that has the power to call off strikes. A statement is expected later.

The BBC's Greg Wood is at the TUC headquarters where the talks are taking place. He warned that even if the strike is called off, it does not mean that the dispute has been resolved.

Rather it would amount to ''a framework for proper talks, instituting a period of calm during which they can take place.''

Royal Mail is trying to modernise to compensate for letter volumes dropping by 10% every year as people switch to other forms of communication such as e-mails and texts.

It has shed 63,000 frontline postal staff in recent years, and says it needs to cut more jobs as part of continuing modernisation plans.

The CWU agrees that job cuts are necessary, but disagrees over their extent, and over the future pay and working conditions of the workers that continue to be employed.

There is still a three million letter backlog from last week's strikes, half of which are in London, according to Royal Mail.

In total it estimated that the action caused 35 million letters to be delayed. Unions claimed the figure was nearer to 60 million.

If the talks are unsuccessful, the CWU will go to court on Friday to try to prevent the Royal Mail from using agency workers during the industrial action.

Royal Mail has denied that employing the 30,000 extra staff is an attempt to break the strike, but instead to deal with the backlog and the Christmas rush.

Source : BBC

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Ad to promote return to work - 5th November 2009

Royal Mail took full-page ads in national newspapers yesterday urging its staff to turn up for work tomorrow in defiance of the Communications Workers Union's national strike call.

The CWU has called out its 120,000 members on two more days of national strikes, on Friday this week and Monday next week.

Negotiations between Royal Mail and the union are continuing at the TUC headquarters but unless a breakthrough is achieved, the national, all-out strike will go ahead tomorrow.

The ad, which appeared in the Daily Mirror amongst other newspapers, was headed: "From Royal Mail to its people" in large black type. It claimed that a quarter of Royal Mail's postmen and women had chosen to continue working throughout the strike.

"We need to face the future together - not try to turn the clock back, as the union wants to do," the ad said.

The campaign comes as the CWU is preparing for a hearing in the High Court tomorrow in which its lawyers will challenge Royal Mail's hiring of 30,000 temporary workers as an illegal move.

One lawyer told Marketing Direct that the case will depend on whether Royal Mail can prove that the temporary workers are carrying out additional duties, rather than replacing striking workers, and have not been hired through an agency.

"The Conduct of Employment Agencies and Employment Business Regulations 2003 makes it illegal for an agency to supply agency staff to do work carried out by employees on an official strike," said Emma Clarke, a senior associate at City law firm Fox, which specialises in employment law.

"The legal position will therefore turn on whether or not Royal Mail are recruiting the temporary workers through an agency and also whether they are recruiting them to cover the Christmas rush or to cover those staff on strike."

Source : Marketing Direct

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Conservatives Declare Privatisation Plan - 22nd October 2009

The Conservative party would privatise Royal Mail if it got into power, the shadow business secretary Kenneth Clarke said this morning.

Clarke said the Tories would privatise Royal Mail if they win the next general election and that he has held 'private, confidential meetings' with potential bidders. The company needed private capital and private management to modernise the business, Clarke said.

"We propose to bring in private capital, assuming it is not in too disastrous a state by next May," he told BBC Radio 4's Today programme.

His comments come as mail centre staff and drivers began a 24-hour walkout at 4am this morning, with delivery and collection staff due to strike on Friday.

Clarke said Royal Mail was "broke" and its future had to involve a change of culture to stop business "draining away".

Royal Mail was becoming a "total disaster" and criticised Gordon Brown for "changing his mind" over the postponed part-privatisation plans.

"The Government has done nothing about the Royal Mail and we now have what could be a truly disastrous strike."

On the same programme, the Communication Workers Union general secretary Billy Hayes said the union was "quite happy" to hold talks at mediator Acas, but urged Royal Mail chief executive Adam Crozier to become involved.

It emerged today that extensive negotiations this week between Royal Mail management and the CWU stalled at the 11th hour.

The Times today reports that Dave Ward, the CWU deputy general secretary, believed a "form of words" had been agreed during marathon talks earlier this week, but claimed that the progress was "wiped out" by a last minute intervention from Mark Higson, managing director of Royal Mail.

Source : Marketing Direct

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Strike Dates Confirmed - 15th October 2009

The Communication Workers Union (CWU) has said two 24-hour nationwide postal strikes will start on Thursday 22 October.

The union said it had no choice but to announce a strike after the Royal Mail rejected its latest set of proposals.

On the first day, mail centre staff and drivers will strike. The next day it will be delivery and collection staff.

Royal Mail condemned the strikes as "an appalling and unjustified attack on customers".

"Customers large and small have been hoping the CWU would lift the strike threats and focus on providing the service they need and want," said Royal Mail managing director Mark Higson.

"We made a genuine offer to Royal Mail that would have given space for detailed discussions without a strike," said Dave Ward, deputy general secretary of the CWU.

"We were severely disappointed that within two or three hours the company rejected it, apparently without even affording it proper consideration."

The union has to give one week's notice of when strike action will be taken, so Thursday was the soonest the action could take place.

Last week, members of the CWU voted by three-to-one to support strike action as part of a dispute about pay, modernisation and working conditions.

The union called on the government to intervene in the dispute, especially regarding the pension deficit, which it estimated would exceed £10bn.

"This government has recently intervened in the problems of Vauxhall and Lloyds Bank," Mr Ward said.

"They are the sole shareholder of Royal Mail and it is unbelievable that they continue to stand aside."

Business Secretary Lord Mandelson said his department was in constant touch with both sides and called on them to put customers first.

"I very much regret this decision by the CWU. Candidly, I think it is suicidal.

"It will only serve to drive more customers away from Royal Mail. One thing this company cannot afford is strikes and industrial action."

The Royal Mail had more strong words for the union.

"The CWU's strike announcement simply shows just how dishonest the union's claim to embrace the need to modernise is and underlines the union's opposition to simple changes such as its members working flexibly for all of the hours they are paid and using the equipment provided to do the job," Mr Higson said.

"Instead the CWU is demanding an absolute veto over future change and modernisation - and demanding more money - backed up with strike action, which they know will drive customers away."

Source : BBC

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Strike May be as early as 19th October - 9th October 2009

Royal Mail union leaders are meeting today to decide whether to call a national strike and have said there are just 10 days to resolve the dispute.

Monday's meeting will decide whether the overwhelming vote by Communication Workers Union members in favour of a strike will translate into action.

The union, which must give seven days' notice of a strike, revealed yesterday that 76% of members balloted last month were in favour of industrial action.

Dave Ward, deputy general secretary of the CWU, said it would give Royal Mail a "final opportunity" to resolve the row over working practices, pay and job cuts over the next ten days.

Underlining the bitterness of the ongoing dispute, which has already brought several local strikes, Royal Mail condemned further strike action as "deplorable and irresponsible" and said 60% of its workers did not vote to strike.

Online and catalogue retailers are now scrambling to make contingency plans to avoid disruption to deliveries, while consumers are expected to bring forward online Christmas shopping or rely more on bricks and mortar retailers.

A survey of 250 businesses released yesterday by the British Chambers of Commerce found that three-quarters were considering using another delivery service.

Amazon said it is putting in place plans to use another delivery service if a national strike goes ahead, while eBay has decided to suspend the ability to rate sellers on their dispatch time.

The Direct Marketing Association has attacked the government over the disruption. DMA head of membership and brand Robert Keitch said it was a "disgrace", that the government as Royal Mail's shareholder, was not intervening. The DMA has already met business secretary Lord Mandelson's special adviser to put its point of view.

Robert Hammond from watchdog Consumer Focus urged companies which fulfil orders via delivery to make their plans clear to consumers via their websites.

Source : Marketing Direct

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National Strike Likely - 8th October 2009

Royal Mail workers are today expected to vote in favour of a "totally unjustified" national strike, threatening the delivery of millions of items of direct mail and other postal items.

Ballot papers for strike action were sent out to all 121,000 postal workers across the UK on the 17 September and exit polls suggest that 70% will vote in favour of a national strike, the first in two years.

According to the Communication Workers Union (CWU), which is balloting for the strikes, the action is being taken "to defend future services as well as for jobs and modern conditions".

Dave Ward, CWU deputy general secretary, said: "Royal Mail's head-in-the-sand approach to the problems in the mail industry is now severely damaging services for customers with backlogs bigger than in the national strike of 2007.

"Management have been attacking our members through bullying-in unagreed, often unworkable, changes. The dismissive attitude to staff at the same time as cuts to jobs, hours and overtime and a pay-freeze has made Royal Mail a dismal place to work."

The Royal Mail has branded the action "totally unjustified" and a "clear attempt to undermine the essential modernisation" of the postal service. It said that all current changes had been ratified by the CWU in 2007.

It pointed out that mail volumes are down by around 10% year-on-year as competition from email and the web accelerates. Each 1% decline in postal volumes currently costs the Royal Mail around £70m in lost revenues.

Royal Mail managing director Mark Higson said: "The ballot further underlines the CWU's determination to renege on the existing 2007 agreement on pay and modernisation, which the union's leadership signed in the presence of the Trade Union Congress.

"The CWU leadership is well aware that it has already agreed all the changes Royal Mail is making and we urge them to recognise the tough conditions faced by all our customers and Royal Mail itself."

The postal service is struggling to adopt to declining postal volumes and the need to modernise. It has a pension deficit estimated to be between £6bn and £10bn, which CWU general secretary Billy Hayes said the government has a "moral obligation" to fund.

In a further blow to the postal service, reports today claimed that Amazon has cancelled its long-term contract with Royal Mail over fears that the strike action could disrupt Christmas deliveries. The contract, which covers parcels weighing more than 500g, is reported to be worth at least £25m a year, the Guardian claimed.

There is currently an estimated backlog of around 20m items in the postal system. Direct mail companies have previously expressed anger at the strikes, fearing that such action will force users to explore other media.

Lance Hill, managing director of print services, at direct mail house 4DM said that the company was "concerned" about the impact of the action.

"This is going to cause us production issues at our busiest time," he said. "The Royal Mail is taking positive steps towards mailing houses at the moment and we see it as a voice of the industry.

"However, ongoing strike action is undermining confidence in direct mail and the Royal Mail needs to act decisively to restore that confidence."

Source : Print Week

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Emergency debate at Labour Conference - 28th September 2009

The future of Royal Mail is to be debated at the Labour Party conference, which starts today, after a motion from the Communication Workers Union was accepted.

The BBC reports that an emergency debate could be held today after a speech to the Brighton conference by business secretary Lord Mandelson.

The news comes as the row between Royal Mail and the postal workers' union escalates. A fresh wave of postal strikes starts this week, with more than 15,000 workers walking out in the dispute over jobs, pay and services.

Plans to part privatise Royal Mail, championed by Lord Mandelson, were put on hold earlier this year after objections by more than 140 Labour MPs. The business secretary argues that outside investment, to help pay for modernization of the postal service, is the only way to save Royal Mail.

In response to Royal Mail's plans to increase automation of its service and cut jobs, the CWU has been staging strikes across the country.

The unrest could get worse, with more than 100,000 postal workers are being balloted on a national strike, with the result due on 9 October.

Users of direct mail are getting increasingly concerned about the effect of the strikes on their businesses.

Source : Marketing Direct

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Strike actions 20m item backlog - 16th September 2009

A series of local postal strikes are continuing to take place across England ahead of the start of an official ballot for a UK-wide national walkout.

The latest localised strikes by Communication Workers Union (CWU) members are taking place in cites including London, Leeds and Birmingham.

The CWU accuses Royal Mail of pushing ahead with job cuts and will send out national ballot papers on Thursday.

The Royal Mail said the CWU's plans for a national strike were "irresponsible".

CWU members have now been holding localised strikes across the UK since last week.

It estimates that as a result, there remains a backlog of more than 20 million letters and parcels in London alone.

However, the Royal Mail says the this figure is only nine million UK-wide, of which six million are in London.

It adds that more than 90% of its staff are continuing to work as normal.

Job security call

The CWU says Royal Mail bosses are forcing through a modernisation of the service - including cutting pay and jobs - without proper consultation.

WEDNESDAY'S STRIKE LOCATIONS
Birmingham
Carlisle
Coventry
Nottingham
Northampton
Hadfield
Warrington
Peterborough
Swindon
Leeds
London

It is calling for a signed joint agreement with the Royal Mail that would guarantee staff job security.

The result of the ballot on a national walkout - which would be the first since 2007 - is due to be known on either 8 or 9 October.

CWU deputy general secretary Dave Ward said there could be no successful change to the Royal Mail without union agreement.

"Modernisation is crucial to the future success of Royal Mail, but the implementation of change must be agreed and it must bring with it modern pay and conditions," he said.

"We want to see a new job security agreement which will help people through this time of change for the company."

'Essential modernisation'

The Royal Mail said in a statement that the CWU was "wholly irresponsible" to press ahead with a national strike ballot as talks between its senior managers and union leaders continue to take place.

"The ballot is simply the latest attempt by the CWU to oppose the essential modernisation of Royal Mail on the ground despite its public claims to support change," it said.

The Royal Mail added that its continuing streamlining plans had already been approved by the CWU under the Pay and Modernisation 2007 agreement between the two sides, and were a vital response to mail levels falling by 10% each year.

Royal Mail's operations director Paul Tolhurst said he urged the CWU to abandon all current and planned strikes.

Colin Stanbridge, chief executive of the London Chamber of Commerce, said the striking Royal Mail workers were "shooting themselves in the foot".

"The longer it goes on, people are going to find alternative ways [to get their post delivered], and as a result the Royal Mail will be even harder hit."

Areas affected by Wednesday's strike action are Birmingham, Carlisle, Coventry, Nottingham, Northampton, Hadfield, Warrington, Peterborough, Swindon, Leeds and London.

The Royal Mail currently employs 121,000 mail workers.

Source : BBC News

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DMA urges Mandelson to intervene - 11th September 2009

The Direct Marketing Association (DMA) has written to Lord Mandelson, the business secretary, asking him to intervene in the current stand-off with Royal Mail to end the ongoing strike action, which the DMA says is damaging direct mail.

The trade association, which has warned of the damaging effects of the strike action on UK business and specifically on direct mail, is also calling on members to follow its lead by contacting their local MPs to demand action.

In a letter to Lord Mandelson, the DMA's chief of membership and brand, writes: "It is quite clear that businesses cannot sustain these interruptions indefinitely."

Keitch points out that "a significant portion" of Royal Mail's turnover "stems from direct mail". The strike will "drive companies away from using mail to sell their products, which will not be particularly helpful to the Royal Mail and its employees when mail volumes are already down year-on-year".

"Should relations deteriorate further and a national postal strike take effect, this would have a significant impact on businesses that rely on issuing invoices and receiving payment via post.

"We are seeing evidence that the economy might be staging a recovery from the recession and yet strike action could be the final blow for many struggling companies."

The CWU strike action will also be counterproductive to reaching their ultimate aim.

"Like the management of Royal Mail, the CWU ultimately wants the same thing; namely, a successful, vibrant Royal Mail. However, these strikes will only serve to undermine the commercial value of post as a communication channel.

"As an industry, we have developed a good working relationship with Royal Mail and meet regularly to resolve operational problems and discuss how we can work together to improve the service customers expect of us. We all appreciate that the service can and needs to adapt to the changing times in which we live."

Source : Marketing Direct

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Strike Holding up 20m Mail Items - 10th September 2009

More than 20m items of post have been left undelivered in London alone as a result of recent strike action by the Communciation Workers Union (CWU), with the situation set to worsen as fresh strikes are announced for next week.

The CWU has announced further action in London, Birmingham, Coventry, Essex, South Wales, Warrington, Bristol, Glasgow and Leeds all set to be affected next week.

According to the union, the mail backlog is more severe than 2007's national strike with an additional million items in limbo in Bristol, half a million in Peterborough and quarter of a million in Leeds.

The union's deputy general secretary Dave Ward has accused Royal Mail of taking a "head in the sand" approach to the industry's "problems".

He said: "Management have been attacking our members through bullying-in unagreed, often unworkable, changes.

"The dismissive attitude to staff at the same time as cuts to jobs, hours and overtime and a pay-freeze has made Royal Mail a dismal place to work."

The union is now set to carry out national ballot of all 130,000 Royal Mail postal workers this month.

Royal Mail has condemned the latest strike action. Paul Tolhurst, Royal Mail's operations director said: "We urge the CWU to abandon strikes and the threat of strikes, and focus on providing customers with the service they need and expect, rather than planning to hurt them with the threat of more strikes."

Source : Print Week

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More strike action this week - 16th August 2009

Thousands of postal workers will launch fresh strikes this week as industrial relations continue to worsen ahead of a national ballot for action.

Members of the Communication Workers Union (CWU) in areas including the Midlands, London, Yorkshire, Bristol and Northern Ireland will walk out throughout the coming week in a long-running row over jobs, pay and services.

The union has accused Royal Mail of cutting pay and jobs - leading to worse services - without agreement, in breach of a deal which ended the last national strike two years ago.

The company has denied the claims and maintains that the union is going back on an agreement to modernise the service.

The CWU is planning to ballot all its postal members next month for a national strike following several weeks of localised action.

The series of 24-hour strikes this week will hit Coventry, Leamington Spa, Nottingham, Stoke on Trent and London from Monday; Birmingham, Coventry, London, Essex, Peterborough, Bristol and Leeds on Wednesday; Peterborough on Thursday and Friday; and Boston and Carrick Fergus on Saturday.

The strikes in Nottingham, Leeds and Carrick Fergus will be the first in these areas since the 2007 national dispute.

Source : Press Association

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Strike Action Spreads - 6th August 2009

Over 25,000 postal workers will stage a series of strikes from Friday to Tuesday over pay and jobs, the Communication Workers Union has said.

Services across the UK, including in London, Scotland, the West Country, East Anglia and the Midlands will be affected, the union added.

London and Scotland have already witnessed stoppages in recent weeks.

Royal Mail said over 90% of staff would keep working and the "vast majority" of services would operate normally.

The strikes will be the most widespread walkouts since a national action in 2007.

On Friday drivers based in Birmingham, Coventry, Essex and London will stage a 24-hour strike, and postal workers in Bristol, Somerset and Edinburgh will take action on Saturday.

Stoppages will spread to Suffolk on Monday, and further areas are due to see disruption later in the week.

AFFECTED SITES
Friday - Birmingham vehicle operation centre; Burslem; Coventry Parcelforce Hub; Edinburgh mail centre; Essex regional distribution centre; Huntingdon; London; Northampton national distribution centre; Peterborough delivery office
Saturday - Boston; Bristol delivery offices; Dalkeith; Edinburgh; Peterborough and Skegness
Monday - Ipswich mail centre; King's Lynn; Stanton; Bury St Edmunds and Thetford in Suffolk
Tuesday - Stoke-on-Trent

CWU Deputy general secretary Dave Ward said "panic-driven" cuts were being made to jobs and services without agreement.

He added: "Postal workers are sick and tired of an incompetent management running their business into the ground.

"Workers are busier than ever and being treated badly."

But a Royal Mail spokesman said the union was failing to acknowledge "clear evidence" of declining mail volumes.

The spokesman said: "The CWU's real agenda is to block change and modernisation at Royal Mail and to absolutely oppose on the ground our goal of making Royal Mail a strong and innovative leader in the UK and international postal markets".

He added: "We condemn the CWU for striking over much-needed modernisation and change which has already been successfully implemented by our people in the majority of offices around the UK and is working well."

Source : BBC

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RM Retail Slash MS3 Prices - 28th July 2009

Royal Mail is to reduce the price of Mailsort 3 - the primary tariff used by direct mailers - by three per cent, in a move likely to anger competitors TNT Post, UK Mail and DHL.

The price drop is designed to maintain mail’s competitiveness as a communications channel, a spokesperson for Royal Mail said.

A client mailing 500,000 items a year would have their Royal Mail bill reduced by £3,000, according postal consultants Post-Switch.com.

"Royal Mail operates in a competitive marketplace and we’re fully committed to offering our customers the best value for money," the Royal Mail spokesperson said.

The price decrease comes into effect on 26 October.

TNT and UK Mail were unavailable for comment as this story went to press.

However postal consultants said competitors would be dismayed at Royal Mail’s move as the price they must pay to access Royal Mail's delivery network remains unchanged.

"Royal Mail’s rivals don’t have access to a Mailsort 3 service, which was designed especially for high volume mailers, and this will undermine them," said David Robottom of D&S Consultants.

Post-Switch.com founder Jonathan DeCarteret said his consultancy would support the move "if the wholesale rate that competitors have to pay was being reduced to mirror the retail rate, which is not happening. This is why we view Royal Mail’s price decease as anti-competitive."

The news comes as TNT NV, the parent of TNT Post UK and Europe's second-largest post company, yesterday reported a 60 per cent fall in net profit for the second quarter.

TNT said it saw little evidence of economic recovery as operating profits in mail fell 13 per cent, with express delivery experiencing an 81 per cent decline.

Source : DM Bulletin

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London area strike action may spread - 28th July 2009

The postal workers' union is due to stage further walkouts in a worsening dispute over jobs, pay and services.

Members of the Communication Workers Union (CWU) took industrial action on Saturday, and announced plans to escalate strike action across London this week, disrupting deliveries to homes and offices.

The union announced that strikes will now be held in different parts of the capital for the rest of the week, including the huge mail centre at Mount Pleasant, Heathrow Airport on Wednesday, north London on Thursday, parts of south east and south west London on Friday and the West End on Saturday.

The union claims that Royal Mail has refused to enter talks over modernisation - a charge the company denies.

Martin Walsh, the union's London divisional representative, said: "We would like to apologise for any inconvenience caused to the public and businesses but unfortunately we have no other choice but to take further industrial action in light of the bullying behaviour of Royal Mail management and the Government."

The union said more than 12,000 workers were involved in the industrial action, which has been condemned by the Royal Mail.

A spokesman said managers had met the union more than 50 times in recent months but said the CWU refused to believe that mail volumes were declining, despite the "clear evidence" put forward.

Royal Mail said it urgently needed to step up the pace of modernisation in the face of a 10% decline in mail volumes in the UK which it warned could only get worse.

"We condemn the CWU for striking locally over much needed modernisation and change which has already been successfully implemented by our people in the majority of offices around the UK and is working well."

The union has warned that industrial action could spread to other parts of the country.

Source : The Press Association

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Summer of discontent... - 14th July 2009

The Communication Workers Union has called a strike on Friday across 21 delivery and processing centres from London to Edinburgh.

The union claims it is taking the action in a bid to force Royal Mail into "meaningful talks over modernisation" because "pressure and stress is at breaking point for postal workers".

Royal Mail responded by condemning the union's tactics and claiming that more than 90% of its people would still be delivering the mail to their customers with over 90% of offices not affected by the planned strikes.

Other offices not on strike will play a role in the action by joining in a national release of thousands of balloons.

This will follow the delivery of a letter and postcard to Royal Mail's chief executive Adam Crozier and business secretary Lord Mandelson.

Dave Ward, deputy general secretary of the CWU, said: "Royal Mail has abandoned the final phase of the 2007 Pay and Modernisation agreement which mandated the company and CWU to negotiating modernisation."

The CWU ran a three-day strike in London from last Friday, July 10.

Source : DM Bulletin

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Royal Mail sale delayed - 29th June 2009

Lord Mandelson has said plans to sell a minority stake in Royal Mail to a private company are being delayed.

The business secretary says the bill which would allow the controversial move was being "jostled for space" in the government's legislative programme.

The bill, opposed by many Labour MPs, was due to go before Parliament before the summer break, but Lord Mandelson said it would not happen until "later".

Tory leader David Cameron said Gordon Brown had "bottled it".

And he offered to let the government use one of the two days set aside for Conservative motions to hold the second reading of the Royal Mail bill.

More than 140 Labour backbenchers have signed a Commons motion critical of the plan and there have also been rumours for weeks that the whole scheme could be shelved.

Depressed markets

But Lord Mandelson has said the company cannot survive without it and he told BBC One's Breakfast that its finances were "reaching crisis point".

In a separate interview with the Financial Times Lord Mandelson said he still hoped to get the necessary legislation on the statute book before the next election.

But, he said, it may be difficult to do so before the House of Commons breaks for the summer, as was originally scheduled.

He told the paper: "I want to retain the slot, but... I have to concede that the original linking of the legislative passage and the bidding process for the strategic partner has been decoupled."

He pointed to the depressed state of the markets, meaning the sell-off was unlikely to raise a substantial amount of money, as another reason for delaying legislation to allow the sale.

BBC political correspondent Iain Watson said any delay in part-privatisation of Royal Mail would boost the morale of Labour Party activists but it was also likely to be seen as a climbdown by political opponents.

'Defter and smarter'

The government says that the partial sell off of Royal Mail is required as part of measures to tackle the financial position of the company - in particular a pensions deficit said to be near to £8bn.

The inevitable obligation to make increased payments to pay off the deficit might force the Royal Mail to increase its overall contributions to the fund to more than £1bn a year - which would drain all its potential profits for many years.

In June the new chairman of Royal Mail Donald Brydon, threatened to close the scheme even to current staff, if the government did not take over responsibility for the pension fund.

However there was some relief for the Royal Mail, and other employers, recently from the pensions regulator which last week published new guidance on how companies could cope with increased pension deficits during the recession.

This included the proposal to allow such pension recovery plans to be spread over a much longer period - such as 20 years.

Source : BBC

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Strikes in London - 12th June 2009

Users of direct mail are bracing themselves for a 24-hour strike in London next week as up to 10,000 Communication Workers Union (CWU) members are due to walk out in protest at job cuts.

The strike on 19 June will disrupt mail deliveries across the city.

The postal workers are claiming that "arbitrary" job cuts will affect about 1,600 workers and that staff may be downgraded into part-time positions.

But Royal Mail dispute the job cut figure and say a fall in mail volumes meant fewer jobs were needed.

A Royal Mail spokesman said the changes being put in place were already agreed with the CWU as part of the 2007 deal.

CWU deputy general secretary Dave Ward said that Royal Mail is blocking modernisation by refusing to negotiate change with the CWU.

But the Royal Mail spokesman said: "A strike will not modernise Royal Mail - it will simply disrupt the service to which customers are entitled, lead to an even greater loss of business and leave Royal Mail far less able to protect full time jobs.

The spokesperson added that productivity in Royal Mail offices in London already lags behind the rest of the UK with the productivity in parts of London now 10% worse than the UK average."

The London strike would come at a time when the Government's planned sale of a minority stake in Royal Mail to a private company may be delayed to increase the price.

Source : DM Bulletin

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UK Mail Postcards on demand - 10th June 2009

UK Mail has expanded its Imail service offering with the introduction of a new marketing tool that allows low-volume direct mail customers to send postcards direct from their computer.

The Business Post Group subsidiary is targeting the service at companies needing ad hoc flyers that can save more than 20% off traditional mailing method costs, according to the company.

The postcards are printed on 250gsm glossy stock, which can feature existing templates or a business's own artwork uploaded to the Imail site.

UK Mail is pitching the new service at last-minute campaigns with orders that are sent before 6pm being mailed by the following day.

Guy Buswell, chief executive of Business Post Group, said: "We are committed to identifying and developing new applications to meet the needs of the marketing community.

"This latest functionality offers a communications tool that is cost-effective and responsive, enabling businesses to better reach existing and potential customers in a fast and efficient manner."

Imail's itself launched last year, claiming to help reduce the carbon footprint of a letter by more than 80%.

Source : Print Week

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Royal Mail sale to be put back - 8th June 2009

The Government's planned sale of a minority stake in Royal Mail to a private company could be delayed to increase the price.

The issue of the partial privatisation is contentious within the Labour party, and the delay could be a way of appeasing backbench rebels.

Legislation that would allow for the sale was meant to be passed before the summer recess but reports say it is likely to be put back until the autumn term.

At the moment, only one bidder is left in the running -- CVC, but its reported £2bn bid is thought to be too low.

However, Royal Mail has warned that its final salary pension scheme might be closed to existing members if a deal is not pushed through.

It is estimated that the scheme will be £10bn in deficit after a review due to be published later this year.

Any closure of the scheme is likely to lead to strikes among the 150,000 workers enrolled in the scheme.

Source : DM Bulletin

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Royal Mail part-privatisation still on - 1st June 2009

Business secretary Lord Mandelson has reiterated his stance to part-privatise the Royal Mail as private equity firm CVC Capital Partners has emerged as the likeliest suitor for the postal operator.

Speaking to the BBC yesterday (31 May), Mandelson said he and the cabinet "are not for turning" and that the government is set to proceed with its privatisation legislation, despite reports that the government is set to abandon the plans because bids do not reach the proposed targets.

The statement of intent comes as CVC Capital Partners has been touted as leading the pack of highest bidders for Royal Mail with an offer just shy of £2bn for a 30% stake, according to The Guardian.

The offer is one of only two, the other from Dutch business TNT, with Deutsche Post curtailing its interest earlier in the year.

Source : Print Week

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CVC Tables bid for Stake in Royal Mail - 31st May 2009

CVC Capital Partners has proposed paying just under £2bn for a 30pc stake in Royal Mail, ahead of a rival offer from TNT, the Dutch postal group, but far short of the Government's original target, The Sunday Telegraph has learnt.

CVC's offer, which was tabled ahead of a Government deadline several weeks ago, is understood to have been discussed in subsequent meetings with officials from the Department for Business, Enterprise and Regulatory Reform (BERR).

The private equity group, which owns a large stake in the Belgian postal service, has emerged as the favoured bidder among some key Whitehall decision-makers because it proposes the injection of a significant sum of money into the modernisation of the company's technology and other infrastructure, something the Government has said is essential if Royal Mail is to have a secure long-term future.

The only firm alternative proposal, from TNT, is focused on securing control of GLS, Royal Mail's profitable parcels arm. TNT's proposal is also thought to contain more aggressive assumptions about the extent of the influence it would have over Royal Mail's board and strategy.

A number of other potential bidders, including Deutsche Post of Germany, considered submitting proposals but decided against doing so.Securing a deal will not be straightforward for CVC, however. This weekend, officials from the Communication Workers Union (CWU) questioned the private equity group's credentials as a potential part-owner of Royal Mail because of the personal tax arrangements of some of the firm's partners.

Billy Hayes, general secretary of the CWU, said: "The Government is potentially lining up two companies which have no interest in complying with British tax contributions.

"CVC is the worst sort of outfit to hand over a successful British company to.

"They are profit obsessed and would strip Royal Mail down to its bare bones while contributing nothing to the public purse."

The second reading of the Bill for part-privatisation of Royal Mail is expected to take place in the House of Commons on June 9, where it will encounter a torrent of opposition from MPs who argue that selling part of the group to outside investors would breach a Labour manifesto commitment.

The political pressure that Gordon Brown, the Prime Minister, is experiencing as a result of the expenses scandal, has intensified calls for him to abandon the sell-off, but Lord Mandelson, the Business Secretary, has stressed his determination to press ahead with the plans.

The Government has said that the taxpayer would take on Royal Mail's pension deficit as part of a part-sale of the group.

A valuation due to be completed later in the year is expected to show that the deficit has risen to at least £9bn.

CVC, which has also owned a stake in the Danishmail group Post Danmark, declined to comment on the details of its Royal Mail bid last night.

Source : The Telegraph

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TNT Launch 3D Mailer - 22nd May 2009

TNT Post is launching what it claims to be the first true 3D effect direct mail product in the UK, called 3-DM.

The 3D card, which is designed and customised by the sender, aims to offer a new way of communicating marketing messages to customers by provoking immediate impact on the viewer.

The dimensional effects of 3-DM can be viewed from any angle without tilting the product and are designed to produce a realistic impression of floating elements within the card.

TNT Post said that its 3-DM product is based on a new printing technique, which creates the illusion of depth and cannot be achieved by any other method at present in the UK.

Senders supply their design to TNT Post, which then works with the organisation to perfect the layout and produce a sample mailer, ready for issue within three weeks.

The mailing can be produced in A6 or A5 format, which can either be enclosed in an envelope or sent as postcard.

Nick Wells, chief executive of TNT Post UK, said: "Direct mail is an excellent channel for achieving one to one communication with customers and more emotional intensity than any other medium.

"However, in a busy market businesses are always looking for new ideas to gain cut-through. Our 3-DM product was specifically designed to give our customers more choice in DM design and a unique creativity that catches the eye and gets people talking."

Source : DM Bulletin

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Partial Privatisation Rejected - 5th May 2009

Ministers have rejected an alternative proposal to the partial privatisation of Royal Mail that would turn the postal service into a not-for-profit company similar to Network Rail.

Left-wing think tank Compass has put forward the idea, which it claims would help raise money to modernise Royal Mail without selling off any of the company.

The Government's legislation allowing the sale of a stake in Royal Mail to a private operator faces a difficult House of Commons vote next month.

Compass believes the Government should use its idea to amend the bill to avoid a protest vote by Labour backbenchers. It will probably have to rely on Tory support to get the legislation passed.

An early day motion opposing the legislation has been signed by 148 Labour MPs.

But postal affairs minister Pat McFadden today told Radio 4's 'Today' programme the Compass proposals were not under consideration.

McFadden described them as "unworkable" and said they were a "political fix" which underestimates the challenges faced by Royal Mail.

He signalled the Government's determination to stick to the plan conceived by business secretary Lord Mandelson, which will bring private investment into Royal Mail by allowing another postal operator to buy 30% of the company.

McFadden described it as the "most convincing plan that has been put forward so far".

However, there was a sign yesterday that Royal Mail's appeal to private operators is diminishing with reports that Deutsche Post has withdrawn from the tender for the stake.

Rival mail operator TNT and private equity firm CVC are expected to make bids.

Source : DM Bulletin

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Drop in DM Volumes - 30th April 2009

Direct mail volumes and value have taken a dive in both the UK and US markets as advertisers look to make more efficiencies in marketing.

In the US, a white paper produced by the Winterberry Group reported that spending on direct mail had dropped by 3 per cent in 2008 – the first drop in direct mail spend since records began in 1945 – and predicted the slump would worsen in 2009 with a fall of 9 per cent on 2008 levels. The fall in volume, however, was more dramatic with a contraction of 12 per cent.

Figures in the UK are not nearly so severe, but last year’s drop of 0.7 per cent was the first fall in direct mail numbers on record – although Royal Mail records only go back to 2004.

In order to encourage more direct mail and promote its value, Royal Mail has launched the Mail Media Centre website aimed at top advertisers and agencies in the country. The website will feature advice, case studies and other direct mail research and while free to view, a subscription is required to access full services.

Source : Professional Fundraising

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London Strikes Looming? - 27th April 2009

The Communication Workers Union has announced it is balloting Royal Mail members with a view to take strike action in London over planned job cuts to the capital's workforce.

The CWU decision to call a ballot comes after Royal Mail announced it was planning a pay freeze.

The union said it has seen plans Royal Mail is to cut between 8% and 20% of staff across the country. The CWU said London would be hit the hardest with 1,600 jobs at risk.

Martin Walsh CWU London divisional representative said: "These are arbitrary cuts by management. There's no machinery coming in to help cope with the workload so these job cuts will have a bad impact on services.

"We're balloting our members across London for strike action to fight these cuts."

However, in a letter to the union Royal Mail's human resources director John Millidge said Royal Mail has been badly affected by the recession.

Royal Mail said the UK postal market is declining between 8% and 10% compared to a year ago. It said each percentage point dropped meant a decline of £7m in revenue.

Source : DM Bulletin

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European Courts Rule on VAT - 24th April 2009

TNT Post UK, the leading challenger to Royal Mail for direct mail delivery, has lost its legal challenge to remove Royal Mail's VAT-free status.

The European Court of Justice ruled that Royal Mail should remain VAT exempt because it is obliged to provide a universal postal service, which its competitors are not.

TNT, owned by Netherlands-based TNT NV, had argued that since the postal market was deregulated three years ago, Royal Mail should no longer enjoy the competitive advantage over its rivals of paying no VAT.

But the Luxembourg-based court ruled that Royal Mail's obligations had not changed when the postal market was liberalised in 2006 and hence it should not have to pay VAT.

"Royal Mail is obliged to provide a universal postal service including at least one delivery to every address and one collection from every access point every working day at affordable and uniform prices," the judgement said.

A spokesperson for TNT said the company "is currently reviewing the judgement".

David Robottom, a consultant for TNT, said the judgement would surprise direct mail users. "TNT has a strong case as there is an inconsistency the way VAT is applied in the UK market," he said. "It creates an imbalance in competition, particularly for financial services and charities, as these sectors can't claim VAT back."

Source : DM Bulletin

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TNT and DMA in Joint Green Venture - 24th April 2009

TNT Post and the Direct Marketing Association have signed a letter of understanding pledging commitment to working together to promote environmental best practice within the direct mail sector.

The letter contains a call for the responsible use of direct mail and proposes the implementation of at least two joint initiatives over the next 12 months.

TNT Post claims to have a firm track record of bringing ethical innovations to the market, including its CarbonNeutral mailing service and greenPost product, which will provide a foundation for future projects.

The projects will be developed by a strategy group formed of TNT Post and members of the DMA's Mailing Houses Council, and will be aimed at businesses of all sizes.

In line with the PAS 2020 environmental standard, TNT Post and DMA will work together to deliver advice, recommendations and information to help minimise the environmental impact of direct mail.

Gillian Lyall, chair of the DMA's Mailing Houses Council, said: "The signing of this letter of understanding indicates the DMA and TNT Post's commitment to both the continued growth of the sector and the environment.

"It sets out a positive framework of how we, and the rest of the industry, can work together to create a more advantageous situation for all organisations operating in the sector."

Nick Wells, chief executive of TNT Post UK, said: "As a trusted provider of postal and direct mail services and solutions to thousands of organisations large and small, TNT Post is well placed to generate interest amongst businesses and mailing houses.

"This expertise, coupled with the DMA's market position, underpins the strength of this joint effort."

Source : DM Bulletin

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Price Control Freeze - 16th April 2009

UK postal regulator, Postcomm, has announced it is to make no changes to existing Royal Mail price control arrangements. The decision follows discussion with interested parties and the ongoing progression of the Postal Services Bill being championed by Lord Peter Mandelson in the wake of the Richard Hooper report.

Postcomm said that this, coupled with the fact that Ofcom, which is to take over from Postcomm, is expecting at least a two year gap before it decides on a new regulatory framework, it had decided to leave current pricing arrangements unchanged.

"Royal Mail has stated it will not make a commitment to Postcomm about providing improved accounting information required by this two-year extension of the price control. Changing the terms of Royal Mail’s licence requires either the company’s consent, or, if agreement cannot be reached between Royal Mail and Postcomm, a referral to the Competition Commission. Such a referral would take around 12 months and is, therefore, not an option given the current time constraints of the Postal Services Bill.

"Given these circumstances, Postcomm has, therefore, concluded that the best way forward is to maintain the current price control which is capable of operating for a further year to April 2011 unchanged. Ofcom will have powers under a new Postal Services Act to decide on the longer term price control for Royal Mail and regulatory framework for the industry.

"If the Postal Services Bill is significantly delayed or not passed, this way forward does ensure that Postcomm would not have fettered its own discretion as to how to proceed and be able to take the necessary steps to ensure that a robust regime, protecting the universal service, could be in place from April 2011." it said.

Source : Hellmail

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Deutsche Post Bid in Doubt - 16th April 2009

Deutsche Post AG, Europe’s biggest mail carrier, has “no strategic necessity” to bid for a stake in Britain’s postal service, according to the German company’s chief executive officer.

“Mail is a declining business and no one knows how far it will go,” CEO Frank Appel said late yesterday at a briefing for reporters in Frankfurt.

The comments suggest that the Bonn-based company may not make an offer to invest in Royal Mail Group Plc, the U.K.’s 360- year-old postal service. TNT NV, Europe’s second-biggest express-delivery company, is considering acquiring a stake in Royal Mail Group, and private-equity firm CVC Capital Partners Ltd. may also be interested, according to reports by Welt am Sonntag and other newspapers.

The U.K. government is seeking to sell about a third of the national postal service as the Royal Mail struggles to adapt to competition from companies including TNT and Deutsche Post’s DHL Worldwide Express. U.K. Business Secretary Peter Mandelson has said that only an outside company has the cash, experience and technology to help the Royal Mail with European Union rules that phase-in competition by 2013.

Even as Appel said the delivery business is deteriorating, the CEO said Deutsche Post may be past the worst in recession- driven declines in monthly volumes.

“With all due caution, March may be a little bit better” than the first two months of 2009, he said.

Deutsche Post rose 10 cents, or 1 percent, to 9.30 euros in Frankfurt trading. The stock has fallen 22 percent this year, valuing the company at 11.2 billion euros ($14.8 billion).

Appel said in February that the declining number of letters and small packages is the most pressing immediate difficulty for Deutsche Post. “We still need to prepare for rough waters,” he said yesterday.

The company’s deliveries collapsed in the final quarter of last year as customers trimmed expenses and retail consumption slowed. The company had a loss of 3.16 billion euros in the fourth quarter of 2008, compared with net income of 253 million euros a year earlier.

Deutsche Post probably will have “some decline” in underlying profit this year, the company said March 11, though overall earnings will show a “significant” increase after the sale of a controlling stake in banking subsidiary Deutsche Postbank AG to Deutsche Bank AG.

Deutsche Post received an 8 percent stake in Deutsche Bank, Germany’s largest, as part of the 4.9 billion-euro agreement reached in January. The package is subject to price-support agreements protecting buyer and seller. Deutsche Post can dispose of half of the shares starting in May and then sell the rest starting in the middle of June.

“There is a downside protection and an upside protection,” meaning the transaction will represent at most 4.9 billion euros for Deutsche Post, Appel said.

Deutsche Bank’s stock has gained 68 percent since the deal was announced. Postbank “has no need for a capital increase,” said Appel, who is chairman of the bank’s supervisory board.

Source : Bloomberg

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Deutsche Post in talks with Royal Mail - 6th April 2009

Deutsche Post has begun negotiations to buy a stake in Royal Mail, according to press reports at the weekend.

A delegation led by John Allan, Deutsche Post's finance director, has met Royal Mail's advisory board, The Sunday Times reported yesterday.

Dutch mail group TNT is thought to be the favourite to win a slice of state-owned Royal Mail after the Government indicated it was prepared to sell 30% of the postal carrier and use the money to invest in modernising the company. Private equity firm CVC is also in the running.

Deutsche Post's share price fell this morning at the news. Reuters quoted a Frankfurt-based trader as saying such a move would not be positive as "Deutsche Post does not have the best track record concerning expansion abroad," pointing to the company's problems with its US unit.

A report on Royal Mail's future by the former telecoms regulator Richard Hooper advocated external investment, a recommendation endorsed by the Government despite opposition from communications workers union CWU and some MPs.

Source : DM Bulletin


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Call to halt Royal Mail Sale - 2nd April 2009

The government must halt plans to sell-off part of the Royal Mail until it explains what the deal involves, a cross-party committee of MPs has said.

The Commons business and enterprise committee said there was a "worrying lack of transparency" to the deal.

Chairman Peter Luff conceded Royal Mail's vast pension deficit had to be tackled, but said it did not follow that a "part sale" was necessary.

But Business Secretary Lord Mandelson said government plans showed "vision".

Ministers argue a "strategic partnership" with a private sector company - which would take a stake of about 30% in Royal Mail - is the best way of modernising the service, which currently has a multibillion-pound pension deficit.

But Mr Luff said: "We don't know how much this sale will raise. We don't know the use to which the money will be put.

"We're very sceptical about the need for this sale and we believe the government needs to provide answers to these questions before the House of Commons can possibly consider the bill."

He added: "We do not believe a 30% stake is the endgame. We believe there will be a commercial agreement signed between the government and whoever that person is, which will take the stake beyond 30% in the future.

"Possibly my biggest single concern is we do not know what's going to be in the most important document of all - the contract between the private sector strategic partner - the equity partner - and the government."

Lord Mandelson, who has championed the sell off, said the government hoped to complete the deal "later this year or early in 2010" and that "the process to find a partner is already under way".

He added: "We always take select committee reports seriously. But it's a pity the committee did not take the opportunity to show a sense of vision of the opportunities and future for Royal Mail but has instead taken a lowest common denominator approach.

"This of course bridges the differing positions in the committee but does nothing to secure a viable future for Royal Mail."

It has been revealed that ministers from Lord Mandelson's Whitehall department have held four separate meetings with a leading private sector bidder - Dutch giant TNT.

More than 140 Labour MPs have declared their opposition to the bill, which allows the part-privatisation to go ahead.

But, with Conservatives and Liberal Democrats generally in support of the plans, the chances of a major government defeat are remote.

Source : BBC

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Crozier attacks TNT Tactics - 9th March 2009

Royal Mail's chief executive has complained to the Government about the business tactics of TNT, the leading contender to buy a stake in the British state-owned postal operator.

According to The Guardian, Royal Mail's Adam Crozier complained to the Department for Business, Enterprise and Regulatory Reform that his opposite number at TNT, Peter Bakker, was trying to poach his customers.

Crozier claimed Bakker had told some of the biggest clients of General Logistics Service, Royal Mail's profitable European parcels subsidiary, that TNT was about to buy GLS.

A Royal Mail spokesman, said: "The government has reassured us that it is looking for the right partner for Royal Mail and it is not looking for a partner for GLS."

A spokesman for TNT told The Guardian: "We don't recognise these allegations at all."

TNT's tax affairs have also been under scrutiny this weekend.

According to the Sunday Telegraph TNT was forced to pay back millions of pounds in unpaid tax to the Inland Revenue and admit that staff had acted illegally.

TNT told the newspaper that any malpractice was historic, has been dealt with and that the integrity of past and present board members is beyond reproach.

Source : DM Bulletin

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DM Industry & Royal Mail Part Privatisat - 6th March 2009

Plans to sell off around 30% of the Royal Mail have been greeted with "guarded optimism" by the print industry after business secretary Lord Mandelson described the Bill as the only credible way to save the postal operator.

In the plans published last week, Mandelson confirmed his commitment to keep Royal Mail publicly owned, but reiterated that a strategic partner was needed to maintain the six-days-a-week, fixed-price universal postal service.

Reacting to the Bill, Gurdev Singh, managing director of direct mail company Howitt, said: "Partial privatisation is a start, but I believe that they should be given full rein to go and compete in the market.

"There is no point changing the tyres if the engine is still knackered otherwise it will run for a little bit then fall over again."

Jude Whitford, operations director at direct mail house Pepper Communications, said the shackles need to be taken off the Royal Mail so it can compete effectively.

"There are concerns over whether any outside investor would maintain the universal service for all addresses. There needs to be that level of reassurance, so there is a guarded optimism," he added.

The Bill would allow the government to take on the Royal Mail’s ballooning pension deficit and comes at a time when, according to Mandelson, the operator has been severely affected by dipping mail volumes due mostly to a rise in emails.

He said: "Our policy will keep Royal Mail in the public sector and this legislation makes this clear. The Royal Mail will run out of money to sustain its current universal, six-day service unless its pension fund deficit is solved and its business transformed."

CDMS head of marketing Richard Higginbotham said that anything that leads to greater investment and innovation can only be a good thing for the direct mail industry. He added: "My hesitation is whether the privatisation plan will lead to this level of investment. There is a need for innovation in print in order for it to compete with the digital channels."

Any move towards privatisation though could trigger a backlash from the unions. The Communication Workers Union has so far opposed the Bill with Billy Hayes, the union’s general secretary, having said there is still no convincing argument for privatisation.

However, in a recent printweek.com poll asking if Royal Mail privatisation would benefit print, an overwhelming 66% voted against the bill, 32% of which expect part-privatisation will lead to a profit above all approach suggesting that support may be confined to the direct mail industry.

Source : Print Week

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TNT Profits Slide - 19th February 2009

TNT, the Dutch mail company which is the front-runner to take a stake in a part-privatised Royal Mail, unveiled a 37 per cent fall in profits today after a sharp drop in demand for its express delivery services.

Shares in the parcel company, Europe's second-largest, fell 5 per cent to €13.89 after it revealed that earnings before interest and tax totalled only €160 million (£143.5 million) in the fourth quarter, down from €253 million at the same time last year. The group warned that it was continuing to experience tough trading.

The poor performance from TNT will give unions and MPs further ammunition about the danger of plans by the Department for Business, Enterprise and Regulatory Reform, to sell a stake of up to 33 per cent in the postal service.

The plans — which could lead to the loss of up to 50,000 jobs — have met with fierce opposition from unions and MPs and are set to trigger one of the biggest fights faced by Gordon Brown's administration. The dispute has put in jeopardy the union's financial backing of the Labour Party.

TNT's expression of interest was formally welcomed in December. Lord Mandelson, who is leading the project, said that such a tie-up would help to boost Royal Mail's peformance and secure its future. He has said that the status quo is "untenable". Other interested bidders include CVC, the private equity group.

Billy Hayes, general secretary of the Communication Workers Union, said: "TNT's results demonstrate that the problems facing the postal industry are not unique to Royal Mail.

"TNT are the supposed miracle workers that the Government wants to bring in to turn around Royal Mail. These poor financial results give the lie to their touted expertise and undermine their position as competent network provider and serious candidate to 'coach' the Royal Mail."

Peter Bakker, the chief executive of TNT, said: "The extremely tough trading conditions we saw for our Express business in the second half of 2008 are continuing into 2009 so far.

Danny Van Doesburg, an analyst at SNS Securities, said: "The company needs to adjust its costs more than previously anticipated."

TNT said that it would now target cost savings of about €400 million in 2009, up from €270 million to €330 million previously. The bulk of cutbacks will be in its Express unit.

Today it emerged that ministers have signalled they may reduce the scale of the Royal Mail part-privatisation project in a bid to limit a rebellion.

Lord Mandelson and Pat McFadden, the postal affairs minister, are said to have insisted that their "doors are open" to unhappy backbenchers after more than 100 signed a Commons motion criticising the plans.

Source : Time Online

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Revolt Puts Privatision in Doubt - 16th February 2009

The government's plan to part-privatise Royal Mail is "dead in the water" because of the strength of opposition from backbench Labour MPs, according to a report.

The Sunday Telegraph has reported that the prime minister has been told by his chief whip that the rebellion means he does not have the numbers to get the plans through parliament.

Gordon Brown could still go through with the support of the Conservatives, but the newspaper claims that the prime minister does not want to rely on them to get the deal through.

The newspaper quotes a "leading government source" as saying: "There needs to be a major rethink. The sell-off as it currently stands is dead in the water and what we are trying to do now is spare [business secretary Peter] Mandelson's blushes."

Dutch postal operator TNT and private equity firm CVC have been tipped to invest in Royal Mail if the government is able to make the plans a reality.

However, the opposition has been fierce. As many as 130 Labour MPs have signed an early day motion against the move and the Communications Workers Union has threatened to cut its ties to the Labour Party if the government goes ahead with its privatisation plans.

According to The Guardian on Saturday, ministers are privately suggesting concessions could be made if the MPs and the union abandon their campaign.

The newspaper reported that post office minister Pat McFadden told the rebels that Royal Mail's business was in severe decline and it needed private investment.

McFadden said: "I do not think there is a full appreciation of the problems being faced by Royal Mail. Its pension deficit is 75 times its profits. Mail volumes are falling by 7 or 8% a year, and it has not automated or modernised as much as other companies. We cannot just hope it all goes away."

Separately, TNT Post has said it may be viable for it to establish its own force of postmen in London by 2011 because of the volume of mail it is currently handling in the capital.

Source : DM Bulletin

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Royal Mail Launch mailshotsonline.com - 16th February 2009

Royal Mail is targeting small businesses with an innovative online tool that will enable them to produce personalised direct mail campaigns in less than 30 minutes.

The postal group has launched Mailshots Online as a cost-effective means for companies to market to existing and potential customers, with prices starting from 55p per item.

The service comes as Royal Mail embarks on a strategy to attract more small business customers to use its services.

By visiting www.mailshotsonline.com, small businesses can design postcard or letter campaigns, incorporating their own logos, images and text in four straightforward steps. Royal Mail then handles the production and delivery of the campaign.

Royal Mail business customers can either use their own databases to target their mailings, or use Royal Mail data.

Tim Rivett, Royal Mail's head of small businesses, said: "Royal Mail has a number of products and services that are designed to help the UK's small and medium sized businesses to grow.

"The launch of Mailshots Online comes at a time when fast, tailored communications is crucial to business success."

There is no minimum order-level for the service, which is being launched as Royal Mail shares the success stories and advice of 100 booming small UK businesses through www.royalmail.com/growth.

Source : DM Bulletin

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Job Losses at Royal Mail - 6th February 2009

Royal Mail plans to cut 16,000 jobs in a move that would unleash further industrial unrest on the battered economy.

The proposed losses — amounting to almost one in ten of the company’s workforce in a drive to reduce the wage bill by £470 million — come as unions also prepare to fight the introduction of a commercial partner to the business.

David Ward, deputy leader of the Communications Workers Union, attacked what he called panic measures. “We are not opposed to modernisation but these are random savings which have not been properly worked out,” he said.

Royal Mail, which employs 170,000 people, has contacted regions around the country asking about interest in redundancy, part-time working and other cost-saving moves.

The Mirror newspaper reported that internal Royal Mail documents stated: “All teams have been given a 10 per cent cash reduction target and so we need to focus not only on where we can deliver an excellent service with fewer roles but also opportunities to spend less cash.”

Further jobs will be at risk later if recommendations by Richard Hooper, a former deputy chairman of Ofcom, are implemented. He has called for a private investor to be allowed to take a stake in the state-owned company and to close half of its 71 mail centres. Unions have warned that the move could result in up to 50,000 job losses.

The CWU is considering severing links with the Labour Party over the plans.

The fresh threat of job losses comes despite record profits, announced last month, of £255 million for the nine months to December 31. This compares with £162 million for the financial year 2007-08. However, that year was hit by some of the worst industrial action for two decades.

The group, which has been criticised in Parliament for failing to modernise quickly enough, said that all its four main operations were in profit for the first time in 20 years. However, it did not provide a breakdown of profits between Royal Mail letters, the Post Office, Parcelforce and GLS, the European parcels business.

It forecast that annual profits would be twice those of the previous year but nevertheless warned that its volumes were falling by more than 7 per cent a year and that competitors continued to gain ground. It also said that the one-price-goes-anywhere universal service was under threat and was still making a loss.

The CWU wants an independent audit of Royal Mail’s finances, accusing it of a lack of transparency. Mr Ward said: “Royal Mail is again giving us mixed messages on its financial health. These results must not come at the cost of cutbacks in services, terms and conditions for staff and post office closures.”

Source : Times Online

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Positive Figures from Royal Mail - 22nd January 2009

Royal Mail has posted profits across all four of its businesses for the first time in 20 years after announcing an operating profit of £255m for the nine months to Christmas 2008.

The figure represents a considerable increase over the £162m made throughout the whole of 2007, but the group reiterated that the challenges from competition and a "structural decline in the mail market" were continuing to grow.

All four of the group's business units, Royal Mail Letters, the Post Office, Parcelforce Worldwide and GLS – its European parcels business – helped contribute to the increase.

Revenue for the third quarter came in at £2.6bn, compared to £2.5bn the year previous, while the first nine months saw a 3% revenue growth to £7.2bn.

Although Royal Mail said annual profit was on track to be nearly double that of the previous year, it stated that competition from electronic media was costing the group five times the level of profit than that of rival mailing operators.

Adam Crozier, chief executive of Royal Mail Group, said the postal operator welcomed the government's intention to sell a minority stake of the business, which would allow for the "operational change we need for the next stage of our transformation".

Crozier added: "For all these reasons we must step up the pace at which we are transforming Royal Mail, otherwise, as the recent Hooper report made clear, we face decline."

Source : Print Week

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Private Equity Investment in Royal Mail - 19th January 2009

Private equity company CVC Capital Partners is planning to buy a stake in Royal Mail, according to press reports yesterday.

CVC is said to be considering a bid for a minority stake in the state-owned postal service as part of government plans to part-privatise the carrier, according to The Sunday Telegraph. CVC did not comment on the report.

The equity firm is not new to investing in European postal services, having bought a 22% stake in Post Danmark in 2005, followed by a deal to buy half of Belgian's postal service.

Private equity has made increasing inroads into DM-related services, with agencies such as Gyro expanding internationally thanks to private equity funding.

The plan to sell a minority share in Royal Mail, as it faces both foreign-owned competitors in the deregulated UK postal market and a large pension deficit, was announced by business secretary Peter Mandelson in December.

It followed publication of the Hooper Report, which concluded that Royal Mail's current situation was "untenable" because of its pension commitments and the challenge posed by digital communications.

Following Mandelson's announcement, Royal Mail rival TNT was understood to be the main contender to take a minority stake in the business.

The Dutch company has the support of Lord Mandelson, much to the dismay of some backbench Labour MPs. A report in yesterday's Mail on Sunday claimed that Mandelson "brushed aside protests" of MPs at a "stormy" private meeting last week.

Founded in 1981, CVC is based in Luxembourg with offices in Europe, Asia and the USA.

Source : DM Bulletin

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Discounts for Sustainable Mail - 9th January 2009

Royal Mail Retail is preparing to launch a new bulk mail service that offers lower prices for direct mail that meets new environmental standards.

The Sustainable Mail will be available to companies from April that meet criteria based on three key environmental needs; improved sustainability, minimised waste and increased recyclability.

The service will be consistent with the forthcoming BSI standard, PAS 2020, for Environmental Performance for Direct Marketing. The standard will launch later in January with the backing of Royal Mail, the Direct Marketing Association, Acxiom and ISBA.

The criteria to qualify for Sustainable Mail at the entry level will include, the use of recycled or virgin fibre sourced from a Defra approved forest certification scheme in all paper products. The adoption of good data practices such as the development and maintenance of an internal suppression file as well as the checking of customer and prospects against the Mailing Preference Service. The recyclability of all paper elements of the mailing, including window and padded envelopes. It will also include a statement or logo, such as Recycle Now, on the outside of the mailing to encourage recycling of the item.

Royal Mail head of environmental solutions Matthew Neilson says: “Royal Mail is committed to helping businesses improve the environmental performance of their direct mail campaigns and in April we plan to launch a new product that will help firms reduce waste, improve recyclability and the sustainability of their direct mail activities while saving them money.”

He adds: “We recognise that a more environmentally friendly approach could raise production costs and that is why Sustainable Mail provides a price incentive.”

Source Precision Marketing

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Royal Mail Launch Mail Tracking Service - 8th January 2009

Royal Mail has launched Red Tag, a new barcode mailing system that could benefit direct mail businesses completing high-volume mailing jobs.

The system, which uses barcode technology to track and monitor letters through to delivery, is claimed to be the first service of its kind in the UK to fulfil high volumes and could be used by direct mailing businesses to analyse customer responses to mail shots.

The venture, which has been undertaken by the mailing giant in partnership with St Ives and software developer PrintSoft, is said to help customers "evaluate and improve the performance of their mailings".

St Ives supported the development and testing of the service, including a 2m customer mailing run.

John Charnock, technical director at St Ives, expects the service to appeal to users such as marketers that are able to analyse the time cycles of their mailing campaigns.

He said: "Red Tag is a way to track mail while also showing up non-deliveries through wrongly-addressed mail. It opens up a dialogue with the customer."

In 2007, Royal Mail appointed St Ives to supply its print management services in a deal worth £40m-a-year.

Charnock said using PrintSoft as its technology partner has allowed it "to target the widest possible market of potential users".

The specialist developed the automation software, Workflow-Q, that underpins the system including the barcoding and tracking technology.

Chris Buckle, sales manager at PrintSoft, said: "Using the system really offers a value-add for direct mail companies using the service to analyse the effectiveness of their marketing."

Every item sent using the service is scanned by Royal Mail's sorting machines in each of its 69 UK centres prior to delivery to its recipient.

Colin Bradshaw, head of data strategy at Royal Mail, said: "The objective of the new service is to help customers evaluate and improve the performance of their mailings by monitoring delivery and identifying customer responses."

Source : Print Week

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Postage Price Increases Announced - 29th December 2008

The price of first and second-class stamps is to rise by 3 pence from 6 April, the Royal Mail has announced.

For standard letters weighing up to 100g, a first-class stamp will cost 39p, while second-class will be 30p.

Royal Mail stressed that the increases were within the price limits set by the regulator, Postcomm.

It also said that even after the latest set of rises, delivering stamped mail would remain a loss-making business for Royal Mail.

Last year, Royal Mail lost more than £100m providing the universal mail service.

For large letters, the price of a first-class stamp will go up 9p to 61p while a second-class stamp will rise 5p to 47p.

"Stamped mail remains very affordable and consumers are still receiving excellent value for money," said Luisa Fulci at Royal Mail. "Most countries in Europe charge more to deliver less."

Source : BBC News

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Hooper calls for Postcomm to be Axed - 17th December 2008

Postcomm could soon cease to exist if it cedes responsibility of regulating the postal market to Ofcom as proposed in a report.

The study by Richard Hooper, the former deputy chairman of media watchdog Ofcom, proposes that Ofcom should maintain the Universal Service in the wider context of the other changes taking place in communication markets.

The proposal to give the responsibility to Ofcom is due to lack of trust and disagreements about basic information between Royal Mail and Postcomm, diverting energy from the postal operators chief challenge, which is to modernise the business.
However, the decision is yet to be approved by Parliament. A decision will be made in January.

The Communications Workers Union (CWU) supports the move to Ofcom. Billy Hayes, general secretary, CWU says: “We welcome the move to Ofcom which recognises both changes in the communications sector and the failings of Postcomm to manage the mail market effectively, however we look forward to receiving more information on future regulation.”

A Postcomm spokesperson says: "We are talking to the Department of Business, Enterprise and Regulatory Reform and Ofcom to ensure a smooth transition process pending approval by Parliament. Postal services will continue to be regulated by Postcomm.”

Source : Precision Marketing

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Hooper Report - 17th December 2008

Royal Mail is facing the prospect of part-privatisation after Lord Mandelson, the Business Secretary, today revealed that TNT, the Dutch postal giant, has made an approach to invest in the stricken service.

Outling the recommendations made in a report by Richard Hooper, a former deputy chairman of Ofcom, Lord Mandelson told the House of Lords that TNT had expressed an interest in exploring a “strategic partnership” with Royal Mail.

He said that the Government would also welcome expressions of interest from other “credible partners”.

The Times revealed today that up to 50,000 jobs could be lost in a partial privatisation of the Royal Mail.

But Lord Mandelson said:"...to improve the Royal Mail’s performance, it should forge a strategic minority partnership with a postal operator with a proven record in transforming its business, working closely with the workforce.

"This, Hooper believes, would give Royal Mail the confidence, the experience and the capital to make the changes needed to improve performance and face the future. In other words, save the Royal Mail by investing in its future."

In a stark warning, Lord Mandelson said: "The status quo is untenable. The universal service is under threat. The choice we face is either downgrading the universal service as we manage decline or acting now to turn things round and secure the Royal Mail’s future."

The report found that Britons send five million fewer letters than two years ago but the number of text messages sent in the UK last year hit 60 billion.

Mr Hooper estimates that the shift to new technologies has cost Royal Mail £500 million in lost profits.

Lord Mandelson said: “Without far-reaching change, the opportunities brought by technology will become overwhelming threats.”

The Hooper Report also recommended that the Government take over responsibility for reducing Royal Mail's pension deficit, which is set to nearly double from £4 billion to £7 billion next year.

The report said: "Each year, on top of its regular £500 million contribution to the pension fund, the company is having to find an extra “top up” of £280 million to plug the deficit."

It added: "The Report recommends that as part of a package of changes, the Government should take over responsibility for reducing substantially the pension deficit."

Finally, Mr Hooper suggested that Ofcom assume the regulation of Royal Mail from Postcomm.

Lord Mandelson said the report suggested "a lack of trust in the relationship between the company and the regulator".

He said: "There are disagreements about basic information and these tensions divert energy from the chief challenge of modernising the business."

A full copy of the Hooper Report can be downloaded from the COI web site - Click Here

Source : Times Online

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Royal Mail Privatisation - 14th December 2008

The first steps towards the privatisation of Royal Mail will be unveiled this week as ministers prepare to remove the biggest obstacle to its break-up.

Lord Mandelson, the business secretary, is expected to announce that the government is ready to take on the organisation’s ailing pension fund, paving the way for radical reforms to the postal service.

The fund’s deficit is thought to have ballooned to more than £7 billion, double the figure quoted in Royal Mail’s last set of reports and accounts, creating a massive liability for taxpayers.

Ministers believe that Royal Mail’s pension crisis is blocking improvements in the way letters and parcels are sorted and delivered and threatening its survival. They have concluded that there will be no improvement to deliveries while the organisation carries this burden.

By taking responsibility for the £22 billion pension scheme — one of the largest in Britain — the government will make Royal Mail a far more attractive prospect to possible buyers of the business. It will give Royal Mail greater commercial freedom and enable it to open talks with continental rivals.

Successful foreign mail companies could possibly take charge of the sorting and delivery operations or the post office network.

The break-up would cause a political furore. Unions say it would lead to further huge job losses and Labour backbenchers fear that the government may be reneging on an election pledge not to privatise Royal Mail.

Last night a source close to Mandelson said: “Our concern is to save the Royal Mail, not to privatise it. We have a manifesto commitment to a publicly owned Royal Mail and we will not be setting that aside.”

However, the wording of the pledge would not prevent partial privatisation, a move Mandelson has already hinted that he favours.

A long-awaited report into the future of Royal Mail will be published this week. The Hooper review is expected to accuse it of providing a deeply substandard service.

It will conclude that leaving Royal Mail to continue operating as it does is “not tenable”.

Alan Duncan, the shadow business secretary, said: “I fear the government is going to steal £22 billion of pension assets, dump the liability as a mortgage on future generations and dress it up as the salvation of the Royal Mail.

“It is an accounting fraud of the most stinking sort and the public need to be alert to the trick they may be about to play.”

Hooper’s report is likely to inflame postal workers in the run-up to Christmas. Workers at several sorting officers are preparing to strike on Friday over the threatened closure of their depots, delaying the deliveries of cards and presents.

A spokeswoman for the Communication Workers Union said: “The British public is fed up with privatisation and has seen the failures of the free market. ”

Source : Times Online

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UK Mail Launch 1st Class Rival - 20th November 2008

Business Post Group (BPG) subsidiary UK Mail has launched a new mailing service that the company believes is the only rival to first class mail.

The Imail service allows corporate and private users to email a letter or mail piece to UK Mail, which then prints it at one of six UK sites for next day delivery.

According to BPG, Imail can lower the cost of producing and posting first class items by up to 60%, as well as reducing the carbon footprint of a letter by more than 80%.

Jackie Lawrie, senior campaign executive at UK Mail, told PrintWeek that the Imail software also has a mail merge facility for direct mail.

Konica Minolta equipment will be used to print the mailers at sites in Barking, Birmingham, Bristol, Croydon, Livingston and Runcorn.

Guy Buswell, chief executive of Business Post Group, said: "With the launch of Imail we have created the first alternative to first class mail, providing a real choice to customers within the UK."

The software package is suitable for all computer types and sends directly to the UK Mail sort centre closest to the destination where it will be printed, enveloped and sorted. The scheme can be used for next day delivery, as late as 6pm the day before.

The price of next-day delivery will start from 51p per item, which will be inclusive of all stationery, production and first class delivery. According to the company, first class mail is estimated to cost around £1 per item.

For multiple items, Imail will offer full mail-merge facilities and users can upload a scanned version of their signature that can be automatically applied to documents.

Business users will have access to a range of management information data on postage usage.

Source : PrintWeek

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Business Post Profits up by 25% - 20th November 2008

Business Post said half-year profits rose 25% after the Royal Mail rival claimed a greater slice of the collection market.

The Slough-based company said its mail operation, which picks up and sorts post ahead of delivery by Royal Mail, increased its market share by volume collected to 13%, compared to 11% six months earlier.

As a result, operating profits from UK Mail rose 30.2% to £5.6 million and helped group pre-tax profits hit £6 million in the six months to September 30.

The performance by UK Mail offset a 5% drop in profits at the company's parcels arm after rising fuel prices put margins under pressure.

Companies such as Business Post have been steadily growing as corporate customers turn their backs on Royal Mail following the liberalisation of the postal market.

Business Post said on Wednesday it was less exposed to fluctuations in levels of economic activity as some 70% of its mail volume was based on delivering regular statements or statutory notifications.

The company said the performance of its parcels arm had been encouraging but the economic environment meant it was cautious about the second half of the year. As a result it will look for range of efficiency improvements, including a 10% reduction in its vehicle fleet and a 10% cut in agency labour.

The business-to-business element of the parcel operation saw revenues growth of 6.1% in the half year, while business-to-consumer revenues were down 2.7%.

Shares in the company opened 4% higher on Wednesday.

Seymour Pierce stockbrokers described Wednesday's results as "very positive" and said it continued to look for full-year pre-tax profits of £16.9 million.

Source : The Press Association


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Royal Mail's Profits Double - 24th October 2008

Royal Mail has more than doubled its profits from £86m to £177m in the first half of 2008, compared to the same period last year, despite a fall in mail volumes.

The postal operators performance was in line with figures showing the vast bulk of mail hitting its targets.

Operating profit grew by £91m in the first half of the year compared to the same period last year. The company’s continued focus on reducing overheads as competitive and economic pressures mount played a significant role in the financial uplift, with reductions in IT and the Post Office network, as well as gains in the Royal Mail Letters business.

Royal Mail, however, still faces a raft of challenges as the rate of structural volumes decline in the UK postal market, leading to five million fewer letters delivered on average each day.

In addition, Royal Mail faces additional risk from the squeeze in the UK economy. Royal Mail is particularly vulnerable to a downturn in the advertising market, which is a key element in overall mailings.

Other challenges include increased competition in the overall communications market with acceleration in the switch by businesses and individuals away from mail to electronic media, including Internet and email.

Royal Mail Group’s chairman Allan Leighton says: "These are good results that demonstrate that real progress has been made in what are clearly difficult economic circumstances. This strong performance has been delivered against a backdrop of falling mail volumes, increased competition, an unsatisfactory regulatory regime and the challenge of meeting the heavy demands of our pension scheme.”

Source : Precision Marketing

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Mandelson Resurrects Royal Mail Privatis - 20th October 2008

Lord Mandelson has resurrected his call for the partial privatisation of Royal Mail, 10 years on from his initial proposed restructure.

The move comes just weeks before the government's review of the postal service is due. The report, conducted by the former deputy chairman of Ofcom Richard Hooper, is widely expected to highlight the unsustainable nature of the current mailing model.

Hooper was quoted in The Telegraph as having said that "maintaining the status quo is not an option".

Speaking to the Financial Times, Mandelson said the change would have taken place in 1998, saying: "If I had not been forced to resign, it would have happened."

Partial privatisation of the Royal Mail, which is currently burdened with a massive pensions deficit, "could produce a much-needed injection of funds leading to a more effective service," according to Andrew Brown, director of corporate affairs at the BPIF.

He added: "Modernisation is a must, but that is not necessarily easy to achieve. Time will tell."

Earlier this year, postal regulator Postcomm put its weight behind the partial privatisation of Royal Mail, arguing that access to private capital and a stronger set of incentives were needed to help it restructure and become more profitable.

Source : Print Week

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Green Wholesale Incentives - 1st October 2008

Royal Mail’s wholesale division is launching a new service that gives its customers a discounted price for direct mail campaigns that meet criteria designed to reduce their environmental impact.

To qualify for discounts of up to 0.7 pence per item on downstream access prices, businesses will have to meet a range of standards to reduce unnecessary direct mail production through improved use of data services, including suppression of addressees who do not wish to receive direct mail. The responsible sourcing of materials and action to encourage the recycling of the mail piece also form part of the scheme’s specification.

The new service is based on two levels of participation – entry level receives a price discount of 0.3 pence per item, while companies who meet the intermediate criteria receive an additional 0.4 pence per item reduction.

Royal Mail has also identified further criteria that it will consider implementing as a third phase, benefiting the most advanced direct mail users through further discounts. The full specification can be found on Royal Mail Wholesale’s website at royalmailwholesale.com

Royal Mail managing director Stephen Agar says: “The price discount will encourage our wholesale customers to make the necessary changes to reduce the environmental impact of their direct mail campaigns. This further demonstrates Royal Mail’s commitment to support the advertising industry in creating more sustainable direct mail and we believe that our initiative will dovetail with our customers’ wider social responsibility initiatives.”

Source : Precision Marketing

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Search for Leigton's Replacement - 22nd September 2008

The government has begun a search for a successor to Allan Leighton, the chairman of the Royal Mail, who will step down from his post after seven years when his term expires next March.

Mr Leighton, Royal Mail’s longest-serving chairman, took up the position at the state-owned group in March 2002, having joined the organisation as a non-executive director in 2001.

He is expected to be involved in the search for a successor, which is being handled by the Zygos Partnership, a headhunting company hired by the Department for Business, Enterprise and Regulatory Reform, which oversees the appointment.

His departure will cap a turbulent reign at Royal Mail. He has overseen a significant modernisation plan of the company, transforming it from a lossmaking group into a profitable organisation.

But progress has not been without controversy. A dispute over pensions prompted the Communications Workers Union to launch the first national strike in a decade last autumn in protest at the changes, while the group has also come under fire over the scale of post office closures.

However, Mr Leighton believes the group is now in a strong position to recruit a new chairman. Significantly, the Hooper Report on the future of the postal services market, by Richard Hooper, the former telecoms regulator, is due to be published next month. The report will examine the degree to which private capital should be involved in the service.

The government extended Mr Leighton’s tenure last year, ending a search for his successor after a number of unsuccessful approaches to several businessmen, including Sir Philip Hampton, the chairman of J Sainsbury.

Prior to joining Royal Mail, Mr Leighton was head of supermarket group Asda, famously selling it to Wal-Mart of the US for £6.7bn in 1999. He left in 2000, announcing he was “going plural”.

Although he has cut down on the number of boardroom posts he holds in recent years, he continues to serve as a non-executive director at George Weston, the Canadian food group, and is often working from Toronto. He is also on the board of BSkyB, the broadcaster.

Industry sources said Mr Leighton, who has a reputation as a turnaround specialist, is likely to want to do one more “big job”. They said he had already fielded some offers.

Last night, Adam Crozier, chief executive of Royal Mail Group, said: “Allan is the longest serving chairman of the company and his leadership has seen the company take huge steps forward. He remains chairman for a further six months and I know he will continue to lead the company with the enthusiasm, passion and drive that is his hallmark until he steps down.”

Source Financial Times



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Royal Mail Strike Action - 16th September 2008

Royal Mail has said it is "confident" that its letters services "will be maintained" if the Communication Workers Union (CWU) goes ahead with a proposed three-day strike beginning next Tuesday (23 September).

The Communication Workers Union (CWU) has issued notice that more than 800 technical workers are to strike, a move that could affect direct mail deliveries.

Dave Ward, deputy general secretary at CWU, said: "This dispute could have a massive impact on the rest of the mail network next week as Royal Mail sites depend on these workers to maintain machinery and buildings."

The strikes, which are due to begin at 6am on 23 September and finish at 6am on 26 September, cover staff employed by Romec that work in technical grades including electronic security and buildings maintenance engineers.

The engineers are threatening to strike over changes being imposed on attendance patterns.

However, a spokesperson for Royal Mail said: "Royal Mail is confident that its letters services will be maintained should any industrial action by Romec go ahead and we are working closely with Romec to ensure back-up services for the entire mail operation are maintained."

Industrial action by Royal Mail is estimated to have cost the direct mail industry around £8m in 2007.

Allan Kerr, group managing director at direct mail printer Fingerprint, said the strikes were likely to affect the work it carries for customers issuing "last-minute" mailings.

He said: "It makes things awkward and can have quite a bad effect on them. Companies will have to try and get their stock to Royal Mail as early as possible."

He added: "Unfortunately, it's becoming something that we have to live with."

Source : Print Week

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Members Ballotted for Strike Action - 5th September 2008

The announcement of the closure of major mail centres in the north west of England has been condemned by the Communication Workers Union. In a press release issued today, the CWU said the closures breached an understanding established in a national agreement.

CWU deputy general secretary Dave Ward said:

“This is a deeply unpopular and controversial announcement which breaks an understanding between Royal Mail and the CWU and puts around 7,000 jobs at risk."

“Royal Mail faces serious challenges at the present time and this closure programme will exacerbate the problems they currently face. The company needs to work in cooperation with the workforce and the union at a national level, but we have been inundated with industrial action requests as a result of the company’s actions."

“These announcements will not detract the CWU from continuing its preparations to achieve a national agreement covering all aspects of rationalisation. The CWU will not hesitate to use whatever means are necessary in order to achieve these objectives on behalf of our members. We are currently balloting members for strike action in 17 mail centres and are seeking a meeting with the Managing Director Mark Higson to resolve these issues.”

The industrial action ballots affect 17 mail centres across the country at: Bolton, Coventry, Crewe, Liverpool, Milton Keynes, Northampton, Oxford, Reading, Southend, Swindon, Thames Valley, The Mount, Chelmsford, Manchester, Oldham, Preston and Stockport. No dates or decisions for ballots are currently available.

Source : Hellmail

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Royal Mail Branded Objects - 4th September 2008

Royal Mail has successfully piloted an offering that delivers selected consumers a box of assorted branded objects on a Saturday, and is to send out the next mailing to 30,000 opted-in consumers in October.

In the pilot 1,000 ABC1 men aged 24-35 were sent a light blue cardboard box, branded "Matter", containing objects including soap crayons from Nissan, tubs of Play-Doh from Sony Bravia and a sweatband from Nintendo Wii as well as a Clubhouse Lounge offer from Virgin Atlantic.

Royal Mail claims that pure word of mouth from recipients generated a flood of people signing up to receive future "Matter boxes" at matterbox.co.uk, meaning it now has 30,000 subscribers in the UK and 10,000 abroad.

It is offering brands a place on a category exclusive basis in the next mailing, which will go out to the 30,000 UK subscribers on the last Saturday in October, for £14,000.

Brands already booked in include a large drinks brand and a high-profile DVD release, according to Fraser Chisholm, head of media productions at Royal Mail.

Royal Mail has created the offering by teaming up with Matter Media, which created the idea and advises marketers about producing an object likely to appeal to consumers. The box bears some unobtrusive Royal Mail branding.

The mail operator has carried research with recipients of the first box and secured endorsements from the marketing community.

Rory Sutherland, vice-chairman of Ogilvy Group UK, said: "In my opinion this is one of the biggest ideas in DM for years."

Bill Gosbee, a marketer at Virgin Atlantic, said it would "definitely take part in future boxes...The halo of other exciting brands ensures that everyone engages with your stuff, even if they subsequently pass it on to someone else."

Source : DM Bulletin

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Compensation Scheme Suspended - 20th August 2008

The independent regulator for postal services has accepted Royal Mail’s application for financial relief until April 2010. As a result, Royal Mail will not have to compensate bulk mailers for poor services provided during previous postal strikes, or for potential industrial action.

The result follows Postcomm’s decision not to discourage the postal operator from taking the steps needed to modernise its business.

Royal Mail will now forgo £21.6m of allowed revenue due to poor service performance quality during the year, but bulk mail customers will not receive compensation. Customers will now be expected to negotiate compensation schemes with Royal Mail to suit their own needs.

However, Postcomm’s decision has sparked anger amongst ISBA’s bulk mail members.

ISBA marketing services manager David Ellison says: “We accept that Royal Mail’s own problems are deep-rooted and that they should not be discouraged from taking the necessary steps to transform and modernise their business. But our bulk mailer members, as commercial organisations, will be annoyed that they will not receive any compensation for the strike, which dramatically reduced the quality of the service they received. The decision to suspend the Bulk Mail Compensation Scheme puts the onus on individual companies to negotiate terms which protect them from potential disruption. ISBA calls on Postcomm to ensure that Royal Mail offers fair compensation to bulk mailers on an individual basis in the future.”

Source : Precision Marketing

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UPS prepare bid for TNT - 11th August 2008

TNT Post, which is expanding its UK customer base, may be set for a change of ownership, according to a weekend report that claims UPS is considering a bid for its parent company.

According to The Sunday Telegraph, UPS has held early-stage talks with the Dutch company, which operates in more than 200 countries, with a €10bn (£7.8bn) bid in recent days, but is not keen on TNT's postal division.

The newspaper quoted sources to the effect that UPS plans to either buy TNT and sell off TNT Post to private equity, or buy both in partnership with a private equity firm.

On Friday, TNT's shares closed at €25.36, valuing the company at €9.6bn.

However, its shares were down to €24.68 by 1.30pm today after Dan Brutto, UPS's president of international business, poured cold water on the report.

In an interview with Reuters, Brutto called the Telegraph report a "rumour" and said that buying TNT at €10bn would devalue UPS's shares.

Separately, TNT Post revealed it has now signed up 2,000 small business customers in the UK.

Source : Brand Republic


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New Head of Postcomm - 30th July 2008

Postcomm has appointed Tim Brown as chief executive, replacing Sarah Chambers.

Brown will replace Chambers when she leaves in September after her four-year secondment from Business, Enterprise and Regulatory Reform (BERR) to Postcomm comes to an end. Brown will also become a Postcomm commissioner.

Brown joined Postcomm at the beginning of 2008 as director of market development, having worked previously at DHL Express UK and Royal Mail.

Postcomm chairman Nigel Stapleton says: “Tim’s extensive experience of the sector, gained at Royal Mail and in the wider competitive market, will be invaluable as we work towards establishing a new regulatory framework that will secure the universal service and provide more choice for all mail users and providers.”

Chambers joined the postal regulator in 2004 from the Department of Trade & Industry, where she headed the automotive unit.

Source : Precision Marketing

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ASBOF Wake Up - 10th July 2008

Why Asbof is not so boring, after all

Apologies to Winston Fletcher, but there are probably few acronyms more likely to induce a nasty bout of narcolepsy than Asbof – the Advertising Standards Board of Finance – which he chairs. Yet, like it or not, it’s the only reason this industry doesn’t face the full force of Draconian legislation.

Without Asbof, there would be no self-regulation…no Advertising Standards Authority, no Mailing Preference Service, no Telephone Preference Service – just a lot more laws.

For direct marketers, this could spell disaster, so anything that threatens the finances of Asbof should cause mass consternation.
The deregulation of the postal market is a case in point. For years, Royal Mail has been collecting 0.2 per cent of brand owners’ direct mail spend to fund the scheme, but with its market share being eroded there has been the real danger that this funding could dry up.

Charles Ping’s recent assertion that the MPS could be “buggered” if client companies do not address a potential funding shortfall (PM February 7) was no empty threat.

For years, the private operators have refused to stump up their share, although it is a highly complex market these days, so the blame cannot be laid entirely at their door. After all, the big mailing clients are just as guilty, and have more often than not gone to the private firms to save cash.
So the news that TNT has pledged to start collecting the levy should be welcome – let’s just hope that UKMail follows suit. At a time when the Government is piling pressure on the industry to expand the MPS, a united front is crucial.

Of course, there will be those who say they don’t really see the benefits of the MPS anyway, but you can be sure that these same people will be finding it hard to sleep at night when their businesses suddenly feel the full force of the law.

Precision Marketing

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TNT Agree to ASBOF Funding - 26th June 2008

TNT Post has eased the pressure on the funding shortfall faced by the Mailing Preference Service (MPS) by agreeing to support the organisation which funds the scheme.

Nick Wells, chief executive of TNT Post, confirmed that the private postal operator has written to its customers to ask their permission to add an extra charge to their invoices to contribute towards the fund.

The Advertising Board of Finance (Asbof) collects the levy which pays for self-regulatory schemes, such as the MPS, and the Advertising Standards Authority (ASA).

Royal Mail currently collects 0.2 per cent of brand owners’ direct mail spend, which it passes on to Asbof to fund these schemes, but until now new entrants to the postal market have not collected any money, fuelling fears that the schemes could be doomed. This is despite the fact that nearly half of all downstream access mail volumes are now handled by private operators.

Wells says: “This was an easy decision to make. We are members of the DMA (UK), and we are supporters of self-regulation of the industry.

“It was never the case that we didn’t agree that this is a good cause, and I think most of our customers support it. We have made this decision now based on the fact that we have changed our systems, so we have the ability to collect the money in this way.”

Asbof chairman Winston Fletcher says: “We’re absolutely delighted that TNT Post is supporting the self-regulation of direct marketing in this way. Self-regulation cannot work without funding and the fact that the largest independent mail operator, TNT Post, has come aboard is clear evidence of how important self-regulation is to the direct marketing industry.”

Fletcher hopes that many of the other independent postal operators will follow TNT Post’s lead.

The move comes at a time when the Government is piling pressure on the industry to expand the MPS. The DMA has been encouraging the industry to back self-regulation to avoid the implementation of opt-in legislation as threatened by the Government.

Earlier this year, Asbof board member Charles Ping warned the MPS?would be “buggered” unless more client companies started paying the levy (PM February 7).

Source : Precision Marketing

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Strikes Cost Royal Mail - 24th June 2008

Royal Mail has shelled out more than £4m in compensation in the first three months of the year, nearly double the amount for the previous quarter.

The rise, which has been blamed on the postal dispute, includes £2.7m for lost mail – an increase of £1m million on the previous quarter – as well as payments for damaged goods, late deliveries, failures to redirect mail and letters sent to the wrong addresses.

Complaints to the postal operator soared to 4,200 a day. The total of just over £4m was up from £2.6m the previous quarter.

Last month Royal Mail released its performance figures for 2007/08, showing a substantial decline against the previous year’s record breaking performance.

The company failed to achieve nine of the 12 minimum service targets in its licence. This performance was also blamed on official and unofficial industrial action.

Source : Precision Marketing

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CWU Vote for More Action - 19th June 2008

The Communications Workers Union (CWU) has voted for another round of strikes at Royal Mail, dealing a blow to the direct marketing industry after last year’s strikes cost the sector £8m.

The decision comes despite the CWU’s resolution after last year’s strikes to concentrate on lobbying the government rather than resorting to industrial action.

The vote was held at last week’s union conference, where deputy general secretary Dave Ward called for the dismissal of Adam Crozier and Allan Leighton.

The decision to return to strike action was in response to pension changes, post office closures and job losses at Royal Mail. Last year’s strike action was a major factor in Royal Mail’s failure to meet operational targets.

The strike also put a major strain on the CWU’s finances amid falling membership numbers. The union admitted at last week’s conference that it needs to make some ‘difficult and unpalatable decisions’, and would be looking to identify savings in its budget.

However, the union stressed that it is still in a strong enough position to protect its members’ rights. CWU senior deputy general secretary Tony Kearns says: “Let Royal Mail – or whoever else – be in no doubt that if they take us on we will do whatever is necessary to ensure we are in a position to fight on behalf of our members.”

Source : Precision Marketing

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More Industrial Action Looming - 12th June 2008

Royal Mail is facing fresh industrial action unless it reverses changes to its pension scheme and gives assurances on the future of the business.

The Communication Workers Union (CWU) voted unanimously to hold a strike ballot on the wide-ranging issues as an emergency motion at its annual conference.

The move is designed to put pressure on both Royal Mail and the Government as an independent review looks at the future of the postal network.

The postal group halted its final salary pension for all employees in April, and replaced it with one based on career average earnings. It has warned that it needs to make radical changes to the pension plan which has a £3.4 billion deficit.

However, the CWU warned that it would push for industrial action unless Royal Mail backs down from its overhaul of the pension plan. The union is also demanding involvement in the reorganisation of mail centres and the introduction of greater automation, which it believes could cost 40,000 jobs.

Dave Ward, CWU general secretary, said that the strike ballot was part of a “major industrial and political campaign effectively to secure the future of our industry”. Mr Ward said the union accepted that there would have to be changes in Royal Mail but that they could not be enacted out on a piecemeal basis. The union’s motion said that the timetable for a ballot “will be designed to maximise pressure on the company and the Government”. Mr Ward said that Royal Mail would be offered talks before a ballot is implemented.

The threat of renewed strike action comes months after Royal Mail suffered one of the biggest strikes in 20 years in a clash over pay.

Earlier, CWU leaders called on Royal Mail’s chairman and chief executive to quit and warned that the postal group’s business plan was in crisis.

Billy Hayes, general secretary, said that Allan Leighton and Adam Crozier were like “two drunken sailors rolling from side to side” with their claims about the financial state of the business.

Royal Mail recently warned that it would soon need billions in extra cash from the Government although last year its leaders claimed that the business had been turned around from losses of £1 million a day. Last year it received a £3.9 billion bail-out from the Government.

Dave Ward, deputy general secretary, attacked Mr Crozier’s recent £3 million pay package as "obscene" and said that he should quit because he did not have the vision to lead the company.

Mr Ward told the conference in Liverpool: "Royal Mail is doing the Oliver Twist thing by asking the Government for more money to pay for pensions and to transform the business. They want between £8 billion and £9 billion from the Government, which they know will not be given, so they will come out and say the only solution is privatisation.”

Mr Hayes accused Mr Leighton of having an “abrasive and hectoring manner”. He said he thought that the Government was losing confidence in the management capabilities of Mr Leighton and Mr Crozier. “The Government were a bit besotted with them at first but now I think they are a lot more sceptical,” he claimed.

Source : Times Online

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Suspension of Compensation - 2nd June 2008

Royal Mail has asked Postcomm to extend the suspension of the bulk compensation scheme for another year amid fears of further industrial action in the future.

The request comes on the back of poor performance figures released last week by Royal Mail. The postal services giant failed to achieve nine of the 12 minimum service targets in its licence, but claims the poor service levels were due to industrial action last summer.

Royal Mail only achieved an 85 per cent service level on first class mail against a target of 93 per cent. Last year, it achieved 94 per cent service levels for first class mail.

Postcomm is now consulting its stakeholders on whether to extend the suspension of compensation.

Speaking about the missed performance targets, Postwatch chair Millie Banerjee says: “What the figures do not reveal is what effect the strikes have had on the posting habits of social and business customers. Many of these customers had to find other ways to communicate. This will have reduced postal volumes, which will in turn damage Royal Mail’s financial stability for years to come.”

Average mailing volumes have been severely affected as a result of last year’s strikes, with daily volumes down from 84 million items to about 80 million.

Source : Precision Marketing

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Postcomm Slams CWU Greed - 29th May 2008

Postcomm chairman Nigel Stapleton has hit back at union claims that the regulator is incompetent, arguing that the Communications Workers Union is “undeservedly” reaping all the cost savings Royal Mail has made.

Speaking exclusively to Precision Marketing, Stapleton counters: “The CWU has been extremely competent in making sure that all the savings Royal Mail has made – through single daily delivery – has gone to its members and not Royal Mail’s customers.

“Second delivery was 4 per cent of Royal Mail’s volume and 20 per cent of its costs. Everyone thought that the savings would be passed on to the customer but in fact they went on higher wages, a five day week instead of six and higher pensions – the customer hasn’t got anything.”

The move follows CWU general secretary Billy Hayes’ public broadside last week that Postcomm was ‘draconian’ and ‘incompetent’ and was to blame for Royal Mail’s demise (precisionmarketing.co.uk).

He also claimed Postcomm was stifling Royal Mail and creating a financial crisis for the UK’s biggest mail carrier.

But Stapleton argues that both the CWU and Royal Mail have their heads stuck in the sand, claiming that neither has reacted swiftly enough to the rise of digital marketing.

He comments: “The CWU doesn’t seem to have realised that what happened to it in telecoms is happening to it in mail, namely that alternative communications media is impacting on the future development of the mail market.”

Stapleton also blames Royal Mail’s lack of new product development. He says: “Half the problem is that the company which should be leading the charge for mail to succeed in the digital world is holding up its hand and saying ‘it’s the regulator that is stopping us; we don’t have enough capital’. But when you analyse it, it isn’t capital it needs. Admittedly we ask for three months’ notice for new product introductions but it hasn’t even test marketed anything since last August.”

Royal Mail sources lay the blame at the door of marketing director Alex Batchelor, who left the company last week. His role has been subsumed into that of strategy and commercial director Alex Smith, who takes up the post next month.

One insider says: “Batchelor came from Orange, what on earth did he know about the postal market?”

Source : Precision Marketing


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CWU Hits Out at Postcomm - 20th May 2008

The Communications Workers Union (CWU) has hit out at Postcomm branding it ‘draconian’ and ‘incompetent’ and has blamed the regulator for Royal Mail’s demise.

Following the Government-commissioned review of competition in the postal market - focusing on the future of the universal service - the workers’ union has blamed Postcomm for stifling Royal Mail and creating a financial crisis for the UK’s biggest mail carrier.

CWU general secretary Billy Hayes says: “CWU is concerned that unfair competition rules and the draconian pricing and access regime brought in by Postcomm are undermining Royal Mail’s ability to deliver the universal service, by allowing competitors to cherry-pick profitable bulk mail contracts.”

He adds: “Postcomm has proved itself incompetent by bringing about a reduction in service provision and undermining the universal service through the way it implemented competition. It is now again acting beyond its remit by examining the ownership of Royal Mail. We expect the review team to stick to its brief and leave the ownership issue to government, which has pledged to keep Royal Mail in the public sector.”

The CWU calls for re-opening of the current price control and the ending of Royal Mail’s effective subsidy of the competition on access. The workers’ union also wants to introduce a price control mechanism that ensures the real cost of maintaining the universal service.

Source : Precision Marketing

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Privatisation Call From Postcomm - 15th May 2008

Royal Mail is in need of a “radical transformation” says Postcomm as it calls for part privatisation of the government owned postal service.

In its second submission to the independent review of the postal market, Postcomm said Royal Mail needs private capital and a stronger set of incentives to enable it to restructure and become more profitable. The report warned that traditional mail is increasingly under pressure from electronic media and said Royal Mail's current business model is unsustainable.

"Part privatisation is the only way Royal Mail can ensure good management and efficiency," said Wanda Goldwag, Postcomm commissioner. "We are suggesting Royal Mail splits into two parts – with the Post Office in government ownership and the delivery and sorting side of the business part -owned by the Government and partly by private capital."

Royal Mail has said it is submitting its own recommendations to the independent review. The panel will then put together a report for the Government in order for Parliament to make its own decisions later in the year.

The Communication Workers Union (CWU) has called this "another bad decision by Postcomm". Billy Hayes, general secretary of the CWU, said: "Postcomm has again overstepped its remit with this report. It has consistently been obsessed with the drive to develop the competition model and calling for privatisation is another step from an organisation that is ignoring its public service obligation."

The report by Postcomm also calls for action over VAT, from which Royal Mail is exempt but private operators are not, and the pressure from pensions. "VAT should be the same for any postal provider, we are not saying what that should be but we are saying it should be the same," said Goldwag.

"We are also saying the Government has to step up and deal with the pension fund for Royal Mail which is currently a millstone around its neck. A universal postal service is important because it makes for social cohesion. Traditional mail needs to remain a viable service as the way we communicate changes. The only way to do this is to add private capital," she said.

Source : Brand Republic


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Postcomm Deny End to Saturday Deliveries - 14th May 2008

A postal consumer group denied claims that it would advise Royal Mail to end deliveries on Saturday.

A spokesman for Postcomm said: "There is no truth in the suggestion we are going to recommend a reduction in service from six to five days. The status quo is totally enshrined in law."

The group will submit evidence to a review looking at the future of the postal industry. All submissions to that review are due by May 19.

On Friday Royal Mail bosses said they would oppose plans to cut deliveries on Saturday if they were made.

The Post Office has already stopped twice-daily deliveries in an attempt to boost the business.

This week Royal Mail announced a drop in profits and said it had lost £100 million in the last financial year through fulfilling its universal service obligations - its promise to deliver letters to every address in the country for the same price.

Source : The Press Association


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End to 6 Day Deliveries? - 12th May 2008

A report due next week from regulator Postcomm calling for an end to Saturday postal deliveries is expected to spark an outcry from Royal Mail's 190,000 workers.

And any attempt to axe the Saturday service could be met with industrial action. Royal Mail chairman Allan Leighton said he was 'totally committed' to a six-day operation and would fight Postcomm's idea 'tooth and nail'.

The five-day operation plan is thought to have come from Postcomm chief executive Sarah Chambers.

She believes that rather than trimming costs by diluting the universal service obligation - which guarantees a letter is delivered at one price anywhere in the UK - Royal Mail should axe a day's delivery.

Last year, she described the six-day delivery as a 'Rolls-Royce' service compared with the Continent where five days is standard. Royal Mail believes it should be policed by media and telecoms regulator Ofcom, arguing that it competes with communications such as email and it is unfair to be the sole target of one regulator.

Billy Hayes, chief executive of the Communication Workers Union, said Postcomm should spend more time taking into account the needs of the consumer rather than with its obsession with competition.

'It's time the regulator concerned itself with maintaining the universal service obligation over six days,' he said.

'It should be attempting to improve service, rather than calling for an end to deliveries on a Saturday.' Royal Mail said: 'We are strongly opposed to any move to reduce our service quality and are dismayed that Postcomm is considering adverse changes, including cutting deliveries on Saturdays and reducing our quality of service targets.' A Postcomm spokesman declined to comment.

Suggestions for changing the structure of Royal Mail come as it faces huge financial pressure to tackle its losses, which are running at about £1m a day. The fundamental problem for Royal Mail is that the regulator has brought in competition, which has allowed private companies to cherry-pick lucrative business contracts.

But there is no competition in the lossmaking deliveries system. The regulator also prevents Royal Mail from competing by cutting the price of products.

Source : This is Money

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Universal Service Running at a Loss - 9th May 2008

Royal Mail has reported a £3m operating loss in its letters business in its latest annual results.

The loss compares to an operating profit of £136m in the previous year.

Royal Mail said the universal service made a loss for the first time, of around £100m, while the overall price controlled area of Royal Mail's business made a loss of around £200m.

The group overall made a post-tax profit of £135m, down 53% from the previous year. Revenues were £9.2bn, up 2.3%.

Adam Crozier, chief executive of Royal Mail, said: "The Universal Service is a huge asset for Royal Mail and for the nation as a whole. It is part of the fabric of our society and is vitally important both to social cohesion and to the UK economy.

"But it is now in the red for the first time -- making an estimated loss of around £100m last year while the overall price controlled area of our business made an estimated loss of around £200m.

"So it is vital that we have the opportunity for a real debate about how the Universal Service should be financed and sustained going forward. We welcome the interim report of the independent review and share the belief as set out in the report that the Universal Service must be sustainable, and that competition should benefit all customers. We have a vision of how that can be achieved."

Source : Brand Republic

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TNT Eco Mark - 6th May 2008

TNT Post is launching a carbon neutral addressed postal service which will allow brands to demonstrate their environmental credentials with a specially developed 'eco-mark'.

Brands which want to display the eco-mark on their mailings will have to comply with a set of principles laid out by TNT.

TNT chief executive Nick Wells unveiled the eco product at the International Direct Marketing Fair earlier this week. He says: "Because we're a transport and postal company we are part of the problem, so we've got to be part of the solution as well."

In order to qualify, brands will have to undertake a carbon evaluation using a calculator which looks at the emissions of the entire mailing activity, from paper and packaging through to data, mailing house emissions and final delivery.

TNT will also assist participating brands with their carbon reduction by recommending suppliers that can help to reduce emissions, such as data cleansing and capturing undeliverables.

Brands using the service will also be required to offset their remaining emissions by investing in carbon reduction schemes.

Source : Precision Marketng

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Postal Liberalisation Failed for Consume - 6th May 2008

Opening up the postal market to private sector competition has provided no significant benefit for consumers or smaller businesses but represents a "substantial threat" to the future of the Royal Mail, an independent report commissioned by the government warned today.

A major shake-up is needed in the way the industry is regulated if Britain is to benefit from a strong, competitive and cost-effective postal services, according to the interim review produced for business secretary John Hutton.

Large companies have benefited from the full liberalisation of the postal market since 2006 with more choice, lower prices and better quality products, but "there have been no significant benefits for smaller businesses and domestic consumers," said the report. It found these customers were largely happy with the value for money now provided to them by the state-owned Royal Mail but said the current situation endangered the future of the universal service which could guarantee one price and next day delivery throughout the country.

"There is now a substantial threat to Royal Mail's financial stability and, therefore, the universal service. We have come to the conclusion, based on evidence submitted so far, that the status quo is not tenable. It will not deliver our shared vision for the postal sector," it concluded.

The panel which carried out the review, led by former Ofcom deputy chairman Richard Hooper, said in its initial findings that there was now a "strong case" for taking action to make sure the Royal Mail has a sustainable future.

"As we see rapid changes in the way people communicate, the way in which the postal sector is regulated will also need to change, and we need to establish how best to create the incentives for Royal Mail to modernise its operation, providing a stable, financial future."

The report said the postal market was changing and faced an "uncertain future", especially as firms looked to cut costs in the face of challenging economic conditions.

In the past two years, competition in the collection, sorting and transportation of bulk mail from businesses has expanded rapidly and much more quickly than was anticipated, the report found.

But there was virtually no competition to the Royal Mail in the delivery of letters despite a belief that some rival firms could invest in deliveries, perhaps twice a week, in urban centres.

"Others point out significant barriers to entry. We will need to consider this further, along with the risk that more extensive competition could make the universal service unsustainable."

Abolishing Sunday collections and the move to a single daily delivery were more visible to consumers and small firms than to large companies, and were seen as a reduction in services.

The Royal Mail faced "many challenges", but modernising its services will be more difficult as volumes fall, warned the report, which also flagged up its £3.4bn pension deficit and the possibility of industrial action.

A Royal Mail spokesman said: "We welcome this report and Royal Mail absolutely agrees with the report's conclusion that the one-price-goes-anywhere universal service to the UK's 28m addresses is at the heart of a successful postal service.

"The report identifies the ways in which the open postal market is clearly not working and Royal Mail looks forward to submitting its further views on the changes that are required in the market, with the way it is regulated and on how the universal service can be sustained and financed going forward."

TNT, the private sector company currently trialling end-to-end mail services in Liverpool and the biggest competitor to Royal Mail elsewhere in the country, welcomed the suggestion that the regulatory framework needed a shake-up. But it also questioned the report's findings that consumers and small businesses were not benefiting. "We are focusing on small and medium-sized companies," said a spokesman who added that private sector competition had forced Royal Mail to improve its services for all consumers.

Source : Guardian

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Royal Mail Fighting for Zonal Pricing - 2nd May 2008

Postcomm, the independent regulator for postal services yesterday received summons that Royal Mail intends to seek a judicial review of the regulator’s decision to reject the company’s recent ‘retail zonal pricing’ application.

Postcomm say the initial application was received in February 2007, studied with great care, and consulted on widely, at Royal Mail’s request. Postcomm rejected the application because it put forward a pricing structure that appeared to have a number of discriminatory features and would have been introduced in a way that would lead to unreasonable changes for its customers. It is now for the court to determine the merits of the case.

Postcomm has not ruled out any future moves towards retail zonal pricing for products outside the universal service should Royal Mail propose an alternative approach that avoids the problems presented by the recent application. Postcomm is generally supportive of pricing that is more reflective of costs.

Source : Hellmail

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Post 123 Joins Licensed Operators - 1st May 2008

Postcomm has signed its 20th licence, registering Post 123 as a UK postal operator.

The license comes after a drought of applications and has reignited Postcomm's hopes for more small businesses to follow suit and apply for a licence.

Sarah Chambers, chief commissioner of Postcomm, said: "New companies entering the market bring with them innovation and creativity. They challenge the way services operate and help change the attitude of Royal Mail. Growing competition has already sharpened up the industry and we hope this will continue to develop through new ideas."

The licensing process has recently changed to make it easier and cheaper for small companies to register. Once licensed, a postal operator can collect, sort and deliver mail, although most rely on Royal Mail for the final mile delivery.

Post 123 is registered as a sole trader. The company intends to provide a weekly bulk delivery to 2,000 addresses across three Manchester post codes.

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Final Mile Competition Review - 21st April 2008

Postcomm is reviewing the barriers postal operators face in the final mile delivery, due to the decline of competition since the postal market fully opened up in 2006.

Postcomm will explore whether competition in delivery is necessary to provide benefits to customers and, if so, seek to identify the key barriers to entry for delivery competition.

The postal regulator is assessing the potential benefits to ensure a healthy universal service and to support a range of reliable, innovative and efficient postal services.

While competition through access agreements has developed quickly since Royal Mail negotiated the first agreement in 2004, competition in delivery has declined for the last two years.

Postcomm has already identified a number of possible barriers, such as Royal Mail’s VAT exempt status, behaviour and redirection of mail. The regulator will also be seeking views on new and emerging issues affecting the growth of competition in delivery, such as market uncertainty, zonal access requirements, customer purchasing behaviour and limitations of using alternative networks.

A proposal will be issued in August 2008.

Source : Precision Marketing

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La Poste UK Acquisition - 11th April 2008

France’s state-owned national postal service, La Poste Group, has acquired BTB Mailflight, a UK based fulfillment and mailing company, to strengthen its position in the UK mail market.

The move is part the group’s long-term international expansion plan, and enhances its existing services in the UK by allowing the company to provide postal collection and sorting before ‘final mile’ delivery by Royal Mail.

The group already offers a range of direct marketing service in the UK via La Poste UK, which includes data management, document preparation, mail collection and franking, and worldwide mail distribution.

La Poste Group managing director Raymond Redding says: “This acquisition fits perfectly into our external growth strategy, which aims to reinforce our position as a major player worldwide and ultimately become the European leader in all forms of mail.

“Now, we will be able to operate in the part of the UK mail process which precedes ‘final mail’ delivery, giving us a deeper understanding of the UK postal market, developing our offer to customers and, in turn, enabling us to increase market share."

Source : Precision Marketing

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Pension Reform Rejected - 2nd April 2008

Royal Mail workers have voted overwhelmingly to reject the changes made by the company to its pension scheme. The Communication Workers Union balloted 140,000 members and claims 92% of respondents voted to reject the changes.

Dave Ward, deputy general secretary of the CWU, threatened strikes unless Royal Mail opens negotiations over the issue.

Ward said: "With such overwhelmingly opposition to their plans, if Royal Mail can't find an acceptable solution with the CWU, industrial action will be inevitable."

The CWU claims it is talking to the Royal Mail managers' union Unite about co-ordinating industrial action in the event Royal Mail refuses to enter into "meaningful discussions".

Royal Mail managers also rejected the pension changes two weeks ago.

Royal Mail closed its final salary pension scheme to new members after March 31. The changes also mean that benefits earned after April 1 2010 cannot be taken until employees reach the age of 65, as opposed to the current threshold of 60.

Source : Brand Republic

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Postcomm Critical of Royal Mail - 30th March 2008

Royal Mail was spending too much time trying to keep competitors out of the postal market and not enough on meeting the needs of users, the postal regulator warned on Thursday.

Postcomm said Royal Mail’s performance in rising to meet the challenges of competition had been disappointing. The former monopoly’s recent focus had been on heading off competition, rather than adapting to compete with new forms of communication such as e-mail and messaging.

The comments came in the regulator’s submission to a government inquiry into the impact of competition on the requirement for a daily collection of post and delivery to every home and business.

Royal Mail reacted angrily to the accusations, saying it was operating in the most competitive postal market in Europe, with one in five letters now handled by private sector operators.

It said competitors had unfair advantages in the market that were undermining its ability to finance the delivery of post to the country’s 28m addresses six days a week.

“The issue is how to maintain the universal service when it’s now loss-making,” said Adam Crozier, chief executive.

“The large business customers who for years have subsidised it are increasingly using the internet to communicate or are posting their mail with rival operators.”

Postcomm’s criticism has been echoed by private sector mail operators in their submissions to the inquiry. They have warned that competition will stall without further measures to weaken Royal Mail’s dominant position.

They blame Royal Mail’s inefficiency for its parlous financial state and accuse it of blocking innovation that would restore the postal market to health. Increased competition would force Royal Mail to improve its efficiency faster, they say, and stem shrinking mail volumes by responding faster to market demands.

“Royal Mail could have responded to competition in a much more positive way,” said Guy Buswell, chief executive of Business Post, whose UK Mail subsidiary is one of the two biggest private operators.

“Its new products and service variations have been designed to stifle competition, rather than provide innovation to its customers.”

The competitors also say its exemption from paying value added tax has limited the impact of competition to the collection and sorting of mail which is then handed over to Royal Mail for delivery. The VAT exemption has blocked the emergence of the competition in delivery services seen in some other European countries.

“We haven’t seen the efficiency gains forecast when competition was introduced,” said David Stubbs of Europe Economics, a consultancy that has investigated the market in separate reports for the two largest private sector operators.

Source : Financial Times


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Trustees 'could sink Royal Mail' - 25th March 2008

Royal Mail fears that its finances are so bad that its pension fund trustees could put it into liquidation to pay off a £3.4 billion deficit.

The postal group has told unions in private that it is possible that the trustees could be legally obliged to demand that Royal Mail be wound up to pay the bill.

Executives are painting a bleak picture of Royal Mail's health, at a time when the company is embroiled in a row with unions over its plan to close its final-salary pension scheme, raise the retirement age from 60 to 65 and cut its contributions.

Unions have also been told that Royal Mail's profits for 2010-11 could be as low as £50million if present conditions continue. Executives say that the letters business has declined, with volumes dropping in competition with e-mails, internet advertising, other operators and customers trading down for services.

That is short of the amount envisaged a few years ago when Allan Leighton, the chairman, was trying a partial privatisation of the business by bringing in outside investment and giving the workforce a stake. He had predicted that the business would be worth £4 billion in that financial year.

Royal Mail's trustees, who meet on Thursday, are expected to back the proposed changes to the pension scheme from April 1, under which the business will cut its contributions from 30 per cent to 21 per cent, comprising 10 per cent for the deficit and 11 per cent for future pensions. At present the total annual cash contribution is £850 million.

However, the threats have yet to have any impact on employees. Postal managers have voted already by 85 per cent to oppose the changes in a consultative ballot and more than 150,000 postal workers are in the process of voting. It is expected that postal workers will reject the pension changes in a ballot that is due to close the day before the trustees' meeting. With unions and management seemingly at a stand-off, postal services are likely to be crippled by industrial action again, only months after the last wave of national strikes over pay ended.

Royal Mail has twice delayed the usual reporting of its financial figures. The latest figures published relate to the year ending in March last year and they show a profit fall of 34 per cent to £233 million. Since then the business has been hit by the worst industrial action in decades.

Paul Reuter, national official with Unite, the union that represents postal managers, said: “The unions actually want this business to be managed. We are very concerned about the state of it. We don't think that Royal Mail has the capacity or the will to work in a competitive environment.”

Mr Reuter said that he blamed the Government for appointing “Laurel and Hardy” to run the business, referring to Mr Leighton and Adam Crozier, the chief executive.

The clash over pensions comes as Royal Mail and the Government are facing a political backlash over the closure of 2,500 post office across the country. Ken Livingstone, the Mayor of London, is seeking a judicial review of closures in the capital.

The Government is conducting a review of the impact of competition on Royal Mail. The company is pressing to be released from some of the obligations set out in its licence.

Royal Mail said that it would not comment on its private discussions with unions.

Source : The Times

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Pension Plan Rejected - 19th March 2008

Royal Mail managers have voted to reject the company's proposed pension changes, increasing the threat of strike action.

Unite advised staff to reject the plans and 85% of those who voted in a ballot agreed with the union.

Royal Mail plans to cut the value of its pension scheme for new and current members and raise the retirement age.

Unite said it would now consider a ballot for industrial action if the issue was not dealt with by Royal Mail.

Unite national secretary, Paul Reuter, said: "This is a massive rejection of Royal Mail's decision to reduce the future pensions of thousands of working people.

"It would be absolute folly if the business were to ignore their loyal staff."

But he stressed that the union did want to rush into a strike.

The main trade union at the Royal Mail, the Communication Workers Union (CWU), is holding a workplace ballot of its own members to judge their opinion.

This ends on 25 March.

But a Royal Mail spokesman said the proposed changes were essential to deal with a deficit of £3.4bn in the pension scheme.

"After discussions on pension change which began nearly a year ago, the unions, including Unite, signed a deal with Royal Mail fully agreeing the essential changes to the pension plan which are taking effect on 1 April.

"Royal Mail is determined to ensure that everyone in the company has the best possible pension that the company can afford but we have no alternative but to reform the pension plan," he added.

Source : BBC News

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Deregulation Boost for Economy - 12th March 2008

The deregulation of the UK postal market has boosted the UK economy by £229m and created more than 3,300 jobs, according to a new report.

The study, which was carried out by Europe Economics and commissioned by TNT Post, found that these benefits could soar to 6,600 jobs created and an additional £405m into the UK economy by 2016.

The report reveals that although there are 18 licensed competitors to Royal Mail in the UK, it continues to deliver the last mile for 99.8 per cent of mail, and that competition has been stifled by the Royal Mail VAT advantage, where 40 per cent of UK business mail remains out of reach of its competitors.

Europe Economics managing consultant David Stubbs comments: “Prior to the deregulation, the UK’s pace of innovation and reform was slow relative to that in other postal markets.

“Royal Mail is facing up to its future and starting to address the challenges of its customers who are looking at new ways to communicate or advertise their products.”

Source : Precision Marketing

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More Strike Action? - 3rd March 2008

Royal Mail faces a fresh wave of industrial action, only months after the end of one of the biggest strikes to hit the postal service in years.

The Times has learnt that unions have rejected the postal group's plan to overhaul its pensions scheme and are poised to ballot nearly 150,000 members over whether they back the plan or not. Last year, postal services were crippled by several days of national strikes in a long-running dispute over pay and working practices.

Royal Mail said a year ago that it intended to close its final-salary scheme to new employees and to raise the retirement age from 60 to 65. It then proposed ending the final-salary scheme for all employees and creating a career average plan, which would be linked to the retail prices index.

When last year's dispute over pay was settled, Royal Mail agreed to continue talks with the unions over pensions, but they have failed to make progress after nearly four months.

* Two post offices of a very different stamp

* Royal Mail review may prompt call for split

The Communication Workers Union (CWU), which represents postal workers, and Unite, which represents postal managers, will start to ballot their members shortly. If, as officials believe, the pension plans are rejected in the ballots, a subsequent strike vote would be virtually certain. The unions are recommending rejection of Royal Mail's plans.

The threat of fresh strike action comes as Royal Mail is under increasing attack over the shutting of 2,500 post offices. The closures, which are being rolled out regionally, have hit London, sparking growing complaints that profitable, popular offices are being shut. There are also complaints over the consultation period, which lasts only six weeks.

Postal union members are likely to feel aggrieved that they are facing a deterioration in their retirement benefits while the pensions of other public sector workers have been protected by the Government.

If postal workers and managers strike, Royal Mail would find it difficult to offer any service. In previous disputes, it has relied on managers to keep some operations running.

Results of the ballots will be declared days before Royal Mail plans to implement the pensions changes at the start of April.

Businesses and households will be furious if there is fresh disruption. A large number of companies switched to rivals or paperless billing during the last dispute. Royal Mail said that the dispute had cost it £10 million in revenue but that the real cost would not be known until it became clear how customers had changed their postal habits.

The group has said that its pension deficit stands at £5 billion, which it is trying to pay off over 17 years. Its pension costs have risen by £193 million a year to £722 million. Royal Mail operates one of the largest pension schemes in the country, with more than 450,000 retired and working members.

A spokesman for Royal Mail said that the CWU had agreed last autumn to support changes to the pension plan “as part of a wider agreement on pay, modernisation and pension reform. And these changes, which we have told our people about, are in line with those agreed with the CWU last autumn, and are necessary if we are to achieve the best possible pension plan that the company can afford.”

The company has partly blamed pension contributions for profit slides in the past two years, down a third to £223 million to the end of March last year. Despite this, Adam Crozier, the chief executive, received a £469,000 bonus, taking his total remuneration to £1.3 million, an increase of 16 per cent on the previous year.

Source : The Times


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Postwatch Condem Performance - 29th February 2008

Annual performance figures for Royal Mail have been criticised by Postwatch, the industry's watchdog, following a summer disrupted by industrial action that caused the first-class delivery rate to plunge far below its target.

Royal Mail's first-class delivery rate for the first nine months of 2007 was 83%, which was 10 percentage points below its target of 93%. Four of those months were blighted by rolling industrial action by workers over pay, pensions and working conditions.

Postwatch said the results would likely result in Royal Mail missing out on 10 of its 12 annual licence targets by the end of the year, which would make it the worst annual performance by Royal Mail since 2003-2004, when the company missed all 12.

The watchdog warned that 2007 and 2008 could be "the pivotal year" in Royal Mail's decline unless it could modernise itself.

The company has responded that its performance was affected by strike action, resulting in a fall in first-class delivery targets between September and December to 80%, and second class post dropping to 91.4%.

Royal Mail said the figures contrasted sharply with its "target-beating performance" across all operations over the 12 months leading up to the strike.

Postwatch also criticised Royal Mail for its service levels over the Christmas period, which fell outside the annual target, and resulted in only 55.1% of first-class post being delivered the next day. The figure for standard retail parcels was 83%.

Millie Banerjee, chair of Postwatch, said: "Royal Mail is having a difficult year. It has let customers down and driven many of them into using alternative means of communicating; it is doubtful that those customers who moved away from mail will return."

Ninian Wilson, operations director at Royal Mail, said: "With the strike behind us and a wide-ranging agreement on modernisation in place, we are now focused on delivering once again consistent, high quality of service to all our customers."

Source : Brand Republic


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More strikes? - 22nd February 2008

Royal Mail has announced its intention to follow through on on its proposed changes to Postal Workers pensions which could see further strike action by postal workers.

The controversal move would mean raising the retirement age from 60 to 65 after 2010. The present pension scheme would, under Royal Mail's proposals, cease from the 1st April 2008. The move is being communicated to its workforce by letter.

The CWU is said to be 'disappointed' by the move and made it clear that it was not willing to accept the plan without the agreement of CWU members.

From the 1st April, existing pensions will be changed to a 'career salary defined benefit scheme' meaning that workers pension benefits will be calculated on the basis of actual pensionable earnings in each given year. The calculation would also be uprated by inflation, capped at 5%. Employee contribution rates will remain unchanged.

Also from the 1st April, new starters at Royal Mail, will be offered a new, defined contribution scheme based on a tiered employee/employer contribution rate although eligibility to join the scheme will not become effective until the employee has been with Royal Mail for 12 months anyway.

The Postal Executive Committee is to meet on Monday to discuss its next move, the likely outcome of which will be a formal ballot. If CWU members reject the proposal, industrial action could soon follow, plunging Royal Mail into another period of strike action.

Source : Hellmail

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Mail Volumes in Decline - 12th February 2008

UK direct mail volumes are set to plummet on the back of the credit crunch sweeping through the financial services industry.

The US market witnessed a 14 per cent fall in volumes in the last quarter of 2007, dropping to 1.29 million offers, from more than 1.5 million offers compared with the same period in 2006. Response rates were flat at 0.5 per cent, according to research firm Synovate.

Overall credit card mail volume for the year was 5.2 billion, down almost 10 per cent from 5.8 billion in the previous year.

Card issuers that cut back the most were Washington Mutual (down 73 per cent), HSBC (down 34 per cent), Citibank (down 52 per cent) and Discover (down 50 per cent), according to the study.

In the UK, many financial services firms have put their acquisition strategies on hold, while fears have been heightened on the back of Egg’s decision to axe 161,000 customers and Barclays’ purchase of Goldfish and other UK brands from Discover.

Source : Precision Marketing

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Royal Mail £9.62m Fine Upheld - 6th February 2008

Royal Mail has lost an appeal against a £9.62 million penalty for failing to protect adequately the mail in its care. The Court of Appeal has upheld the penalty imposed by Postcomm, following an appeal by Royal Mail. The judgment reinforces Postcomm’s position that the penalty is proportionate and reflects the loss suffered by customers.

In a unanimous judgment, the three judges confirmed that Postcomm had a broad discretion to determine the amount of the penalty and that, in reaching its determination, it had made the best assessment it could, given the evidence available to it.

Royal Mail did not dispute Postcomm’s finding that it breached its licence requirements to keep mail safe and secure, nor that this breach was serious; it appealed only against the level of the financial penalty.

On 24 August 2006, Postcomm imposed a financial penalty of £9.62 million on Royal Mail for breaching its licence by failing to properly protect the mail in its care. The penalty followed a review of Royal Mail's mail integrity procedures, during which Postcomm found that some important features of Royal Mail's procedures were not being applied across the business. Royal Mail previously challenged the penalty in the High Court but, following a hearing, the court ruled in favour of Postcomm. The Court of Appeal has now upheld the earlier decision of the High Court.

The most significant weakness found was the poor management of the recruitment and training process for non-contract (agency) staff. In addition, the framework and information systems that Royal Mail had put in place to prevent the loss, theft and damage to mail were not operated effectively. These weaknesses significantly reduced Royal Mail's ability to protect its customers' mail.

Source : Hellmail

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Statements by mail still in demand - 5th February 2008

Companies risk losing valuable customers if they drop paper statements

Companies could lose one third of their customers to rivals if they stopped sending them one simple thing – their monthly paper statement, new research revealed today.

A study by Henley HeadlightVision, conducted on behalf of Royal Mail, revealed that utility companies would be at most risk to customer defection with 35 per cent of people saying they would switch to a competitor that did provide statements through the post.

And almost one fifth (19 per cent) of people said they would switch banks if they were told they could no longer receive a paper statement.

The Henley HeadlightVision study, which investigated consumer attitudes to their financial, mobile phone and utilities supplier communications, also revealed that 68 per cent of online banking customers still like to receive statements sent through the mail.

In addition to this, the research found:

70 per cent of all respondents said they would prefer to receive statements and bills by post only
67 per cent also agreed that it is easier to deal with post than email communications
70 per cent of consumers believed it is more secure to receive confidential information by post

“Many companies are currently actively encouraging people to transact with them online, but they need to ensure that this is what their customers really want,” said Abi Wood, Head of Financial Sector Marketing at Royal Mail.

“It is important for companies to embrace the breadth of communication channels available and offer their customers a choice. Companies that scrap paper communications without asking their customers first will lose a significant number of them to rivals.”

She added: “This research demonstrates the importance and value that many people place on having a hard copy record of their transactions to the point that they would look elsewhere if their company stopped sending them.”

Source : Easier

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Third Postal Directive Approved - 4th February 2008

The European Parliament has approved a Third Postal Directive, moving the European Postal Sector one step closer to becoming fully liberalised.

The Postal Users Group (PUG), which represents a broad range of associations covering companies that provide postal services to consumers, has welcomed the move that will ensure fair and effective competition, better value for users from existing services and downward pressure of prices.

The Directive also complements the European Commission, the Council and the Parliament on setting deadlines for the final step in opening the EU letter mail market to competition.

PUG chairman Per Mortensen says: “We now have a legal basis on which to build a truly competitive market for letter post services. The challenge for the 27 member states is to ensure they successfully adopt the Directive’s legal framework to local conditions in ways that truly benefit postal users thereby ensuring letter post’s future. Therefore, PUG will follow the transposition of the Directive into national law very closely.”

Source : Precision Marketing

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Zonal Pricing Legal Challenge - 24th January 2008

Postcomm is bracing itself for a legal challenge from Royal Mail following the regulator’s rejection of the postal operator’s revamped zonal pricing proposal.

The watchdog revealed late last year that Royal Mail’s fresh proposal was still not acceptable (precisionmarketing.co.uk). The full report will not be published until next month but Postcomm has admitted in its Draft Forward Work Plan for 2008-11 that “our recent zonal pricing decision may be the subject of a legal challenge”.

A Postcomm spokeswoman claims this is “normal procedure” but industry observers believe that the aggressive tone of Royal Mail’s proposal shows it is willing to go all the way to the European Court if need be.

The main tenet of Royal Mail’s argument was that increased competition in the postal market is allowing private operators to cherry-pick areas where it is cheaper to deliver mail.

It presented a legal argument, claiming Postcomm had not “undertaken a competition economics assessment of the application” and its stance was “inconsistent with EU and UK competition law on discriminatory behaviour”. It continued: “This is a fundamental flaw in Postcomm’s consultation proposal which Royal Mail believes is legally incorrect.”

No-one was available for comment at Royal Mail as Precision Marketing went to press.

The proposal seeks to charge large mailers – using products that are not part of the universal service – different prices depending on where in the UK the mail is delivered.

The plan affects mail delivered to both rural areas, where cost is an issue, and inner-city zones, where Royal Mail claims its rivals are able to undercut its prices.

Postcomm has not ruled out any future moves towards zonal pricing, although it says Royal Mail will have to propose yet another alternative.

Precision Marketing

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TNT Scottish E2E Plans - 20th January 2008

A FLEET of orange-uniformed TNT postmen will soon take on the Royal Mail on the streets of Scotland, the boss of the private postal operator has hinted.

Nick Wells, chief executive of TNT Post, told Scotland on Sunday that the company was gearing up to launch trials of its first "end-to-end" service, where items are picked up, sorted and delivered by TNT staff without any involvement from the Royal Mail.

He gave his clearest indication yet that some of the locations, which the company has so far refused to confirm, are likely to be in Scotland.

"We're going to deliver an end-to-end delivery to carry out the final mile of addressed mail," he said. "You could find there will be orange postmen on the streets of Scotland."

Although a number of private operators have entered the UK postal market since it was opened up to full competition in February 2006, Royal Mail continues to dominate what is referred to in the trade as the "final mile" – the actual delivery of letters and parcels to individual addresses by postmen.

Since its launch in Britain in 2003, Dutch company TNT Post has seized a 9% share of the market, yet it still has to rely on Royal Mail for the final leg of deliveries, effectively handing business back to its competitor.

Wells said: "Last year we handled over 1.8 billion items, but we give all of that back to Royal Mail. Royal Mail still do the end-to-end. We're Royal Mail's biggest client."

It is understood that TNT Post is planning to launch its own end-to-end service early this year in order to reduce the amount of business it hands back to its rival.

Although Wells refused to disclose locations and timings of the end-to-end pilots for competitive reasons, he said TNT Post has been building up a sizeable business in Coatbridge, Glasgow, over the past 18 months.

"Since we started in Scotland we've got about 250 customers," he said. "It's quite a vibrant area with lots of customers."

The company has been targeting businesses in the central belt
in particular, launching the PremierSortFlex service for businesses that send more than 250 letters and parcels a day. Corporate clients include Bank of Scotland.

However, Wells said the company had no plans to support the struggling Post Office network in Scotland, which will see up to 30 branches closed or downgraded this year.

Postcomm, the postal services regulator, recently urged private companies such as TNT Post, DHL and UBS to strike deals with the Post Office network over undelivered mail.

Sir Nigel Stapleton, chairman of Postcomm, said private operators could leave undelivered mail for customers to collect at post offices, rather than forcing them to trudge out to remote out-of-town depots.

But Wells said: "At the moment I think we're prevented from doing so by the contracts between Royal Mail and the Post Office. We therefore haven't looked too closely at that."

Source : Scotland on Sunday


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Royal Mail Business Separation - 18th January 2008

Postcomm has set the ball rolling on a consultation which could lead to the eventual separation of Royal Mail’s collection and delivery operations in order to improve on current access agreements.

A consultation document was published yesterday to review the current framework allowing rival operators to use Royal Mail’s delivery arm. Earlier in the week, Postcomm proposed the principle of ‘wholesale equivalence’ which has already been adopted by Ofcom to reduce the burden of regulation on BT.

These moves stem from Postcomm’s Strategy Review which was launched in August 2007. As part of this review Postcomm has made a commitment to evaluate the current access agreements and identify and resolve any problems with the existing arrangements.

A letter was sent this week to all postal operators, organisations representing mail users and postal watchdog Postwatch asking for their views on how best to regulate the industry from 2010 when the current price control arrangement expires.

In the letter, Postcomm chief executive Sarah Chambers said: “We want to begin by taking a top-down approach, based on what we have learned from our Strategy Review. We want to consider whether adopting a different approach could allow a significant reduction in the scope of regulation, whilst maintaining sufficient protection for customer and operators in those areas where Royal Mail has substantial and enduring market power.”

Source : Precision Marketing

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Postcomm Relaxes Licensing Rules - 17th January 2008

Competition in the postal market is set to soar further as Postcomm simplifies its licensing procedure for non-universal service operators, making it easier for small and medium-sized postal services to enter the market.

Postcomm, the independent regulator, has amended its licensing procedures following a consultation on proposals to move to less prescriptive licensing for smaller businesses seeking to enter the postal services market. The amendments will include a reduction in application fees from £1,000 to £50, which Postcomm hopes will help encourage small businesses to enter the market. It will also include the removal of the licence requirement on all licensees to have contractual arrangements in place to ensure the delivery of mail if an operator fails, allowing other operators to respond.

The amendments aim to protect the interests of postal customers and ensure that its licensing rules support the developing competitive market. The new procedures will not affect Postcomm¹s ability to enforce licence conditions or lead to any substantial reduction in protection for mail customers.

Source : Precision Marketing

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TNT Launch Print Management Solution - 7th January 2008

Global delivery services giant TNT Post is offering print management services to its clients after signing a 12-month agreement with TDG Group.

The private-sector rival to Royal Mail will use the tie-up with the London-based firm to offer end-to-end print management services, a creative review process and environmental consultancy to direct mail clients. It will also use TDG’s services for its own print.

TNT’s agreement makes it the latest postal operator to offer some form of print management. Most notable among those who have moved into the market is Deutsche Post World Net, which in February 2006 bought a controlling stake in Williams Lea.

TDG managing director and founder Tom Gorman said: “We’re delighted to be working with TNT and it’s a great opportunity for us to showcase our additional capabilities.”

TNT Post has recently launched an initiative to cut its carbon emissions and TDG is hoping it can help, having recently been awarded ISO 14001 environmental management accreditation. It also has the ISO 9001 quality management stamp.

“With this agreement, we can advise TNT’s clients on how to be greener and open up a creative delivery to ensure they maximise their demands,” said Gorman. He added that he hoped to increase turnover from £6m to £8m in 2008.

A spokeswoman for TNT Post said the firm had worked with TDG in the past and the renewed link was “a great opportunity” for the firm. The group had formalised the relationship after TDG, which has recently launched a green audit for suppliers, stepped up its environmental focus.

The spokeswoman said: “While it’s not an exclusive agreement, if a client is looking for bulk mailing printing, we will recommend working with TDG because we are happy with their service levels. It’s great for TNT to have access to the variety of pricing and services that TDG can offer.”

Print Week

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Mail Volumes in Decline - 3rd January 2008

Only 37 per cent of businesses predict their mail volumes will increase over the next five years, a 13 per cent decrease from predictions made last year, according to a Postcomm study.

Postcomm’s annual Business Customer Survey among over 1,800 businesses reveals that while in 2006 50 per cent of businesses believed there would be an increase in mail volumes over the next five years, in 2007 only 37 per cent believed mail volumes would rise.

Over 40 per cent predicted the volumes would plateau, while 11 per cent of businesses predict a decrease in their mail volumes over the next five years. Financial services firms remain the biggest mailers, but use of mail in sectors such as charities, and health are set to increase.

One in five businesses have explored alternatives to using mail and have switched to other media, such as email, in the past 12 months.

The survey shows that Royal Mail continues to be the main service provider to business customers, serving 100 per cent of firms surveyed. Even customers which have moved some mail to alternative providers continue to use Royal Mail for most of their mail. Overall, 97 per cent of mail across the total sample was sent via Royal Mail. While perceptions of service quality have improved across Royal Mail and the alternative operators.

The research also reveals that a larger number of small businesses are beginning to benefit from competition, but much more needs to be done before small firms can experience the full benefits that larger mailers have seen since the market was opened.

Source : Precision Marketing


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Postage Increase April 08 - 21st December 2007

Royal Mail said today the price of a First Class stamp for a standard letter weighing up to 100g would rise 2p to 36p from April 7 2008 in line with the price controls set by the regulator, Postcomm, in 2006.

A Second Class stamp for a standard letter weighing up to 100g will rise 3p from 24p to 27p.

When the new prices take effect, Royal Mail’s stamps will still be among the very lowest priced in Europe. The average household now spends 50p a week on stamps, a fraction of the amount spent on telecoms.

Stamped mail makes an average loss of around 6p per letter and packet - and it will continue to be loss-making as the increases will not be sufficient to cover the deficit. The total loss last year on stamped mail was £178 million.

Luisa Fulci, Royal Mail’s Director of Commercial Pricing and Policy, said: "For many years profits from business mail have funded stamped mail losses - but it’s getting harder all the time to maintain that subsidy as competition for business mail from rivals, electronic communications and the wider communications market is increasing while mail volumes fall."

Business customers who use franking machines will continue to get a discount against the price of a stamp. A franked, standard First Class letter will increase by 2p from 32p to 34p in April, while a standard Second Class franked letter will rise 2p from 22p to 24p, increasing the discount for Second Class franked mail discount from 2p to 3p.

For the first time, medium-sized businesses will get discounts on volume - the more they post, the lower the postage bill.

The full details of new prices are published on Royal Mail’s web site. Prices for bulk mail will also be changing, and in some cases will fall in real terms. Some prices for heavier weight items will also be falling to improve Royal Mail’s competitiveness in the growing home-shopping market.

Ms Fulci added: "It’s crucial we do all we can to ensure postage prices reflect the costs of providing services as that’s the best way to ensure we can continue providing a one-price-goes-anywhere stamped mail service to the UK’s 27 million addresses."

Source : Royal Mail

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Zonal Pricing Rejected Again - 18th December 2007

Royal Mail’s new proposal for zonal pricing has been thrown out for the second time, despite the organisation’s aggressive stance.

Regulator Postcomm has not ruled out any future moves towards zonal pricing, although Royal Mail will have to propose another alternative.

The proposal seeks to charge large mailers – using products that are not part of the universal service – different prices depending on where in the UK the mail is delivered.

However, not satisfied that the change would avoid unreasonable change to users as it involves discrimination, Postcomm has rejected the current applications. A full insight into the rejection will be unveiled in January.

The move comes as Postcomm also welcomes the Government’s review of the UK postal services market. The review will look into Royal Mail’s functionality, evenhandedness amongst rival operators and Postcomm’s regulatory strategy.

Postcomm chairman Nigel Stapleton says: “The introduction of competition and choice has brought direct benefits to business customers, and social customers have benefited from the boost to service reliability prompted by competition and regulation. But the impact of alternative media and other market changes is bringing new challenges. Postcomm itself is in the middle of a high-level review of our regulatory strategy that is looking at all aspects of the regulated postal services market. We are pleased the Government's review will cover all aspects of the market and of Royal Mail's structure and performance. The forward looking approach can ensure the public continues to benefit from an evolving universal service it values and the market develops to provide innovative, efficient and reliable services that meet the needs of all users.”

Source : Precision Marketing

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Competition Review - 17th December 2007

A wide-ranging review of the effect of competition on Royal Mail is expected to be announced today amid concerns that the group’s ability to provide a core service is being damaged.

John Hutton, the Business and Enterprise Secretary, will announce the review amid pressure from unions and Labour MPs who fear that Royal Mail is suffering because its rivals can take on lucrative business contracts but do not have the same service obligations to the public as it does.

However, the review is also likely to trigger strong pressure for a major revamp of Royal Mail, including splitting it in two.

As part of its licence to operate, Royal Mail must provide a universal service, meaning that post can be sent anywhere at a flat rate. This is profitable in cities and for short distances but is not economic across long distances and for remote destinations.

The postal group has asked Postcomm, the industry regulator, to modify this obligation to reflect its costs. It has been unsuccessful in its request, although it has been allowed a series of stamp price rises.

In the review, rival postal operators, such as TNT and Business Post, are likely to be asked to help to fund Royal Mail’s universal service obligation.

John Grogan, the Labour MP for Selby, who has campaigned to keep full public ownership of Royal Mail, said: “If the private sector companies are strong enough, then I think they should make a contribution to the universal service. The more successful they are [the more] they should contribute accordingly.”

The rival players are likely to resist such moves because they claim that they are disadvantaged by Royal Mail charging too much for them to use its infrastructure and also that Royal Mail is exempt from VAT while they have to charge it.

Instead they are expected to use the Government’s review to demand that Royal Mail’s operations are split up to promote more competition. They want to see Royal Mail’s letters division, with which they compete, separated from its network operations, which they have to use for the final-mile delivery.

Source : The Times

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Delay Investigations - 10th December 2007

Royal Mail is facing an investigation over claims that letters are being delivered late because postmen are failing to complete their rounds.

The mail watchdog, Postwatch, will look into the issue after receiving complaints from the organisation's staff as well as customers.

Problems with postal deliveries have been blamed on new working practices introduced after strikes by the Communication Workers Union, and a new 56mph speed limit for lorries, which means that mail is arriving later at sorting offices.

Postwatch will survey thousands of householders to find out whether mail is arriving on time.

The investigation will focus on a practice known as "cutting off", where workers take undelivered mail back to the delivery office at the end of a shift, rather than finishing the round in overtime.

Royal Mail says it has already fitted its lorries with speed limiters in advance of European Union rules which will restrict their speed from January 1.

Postal workers, writing in an online forum, have threatened to disrupt deliveries at Christmas. One said: "I am cutting off every day in December." Another said: "I for one will be finishing at my time."

Postwatch has raised its concerns with the postal regulator, Postcomm.

Under the terms of the deal which ended the strikes, Royal Mail is expected to scrap a system which allows workers to go home early if they have completed their round.

Royal Mail insisted there was no evidence of an increase in cutting off.

A spokesman said: "There's no change to our pledge to customers to deliver the mail by 2pm in urban areas and by 3pm in rural areas. The focus of every­thing we're doing now is to deliver the best possible Christmas service."

Source : The Telegraph

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Compensation to be Simplified - 6th December 2007

Postcomm, the independent regulator for postal services, has outlined proposed changes to Royal Mail’s compensation schemes for lost, damaged and delayed mail to make them fairer and more suited to customer needs.

The regulator has conducted a public consultation and worked closely with Royal Mail and Postwatch to address concerns about the complexity of Royal Mail’s current compensation schemes for retail customers and some inconsistency in how they are applied.

Following this review, Postcomm is proposing to remove bulk mail from a regulated compensation scheme for delay. Competition for bulk mail customers has developed to a point where the regulator is proposing that it is more appropriate to move towards a market driven option allowing the growth of schemes which reflect the differing needs of large mailers.

Royal Mail’s retail customers should face less difficulty in pursuing their claims because, for retail mail that has been lost, damaged or delayed, the proposals aim to simplify and align:

* the processes for making a claim;
* the evidence required to support a claim; and
* the compensation payments themselves.

Postcomm chairman Nigel Stapleton said:

“Royal Mail’s compensation schemes for their retail customers have developed over many years and have become difficult for customers to understand. Recognising this, Postcomm has worked closely with Royal Mail and Postwatch to try and find ways to cut through the complexity and make sure mail customers have access to a clear, fair and user-friendly compensation system.

“Postcomm is committed to remove prescriptive regulation where possible and the development of competition for the business of the largest mailers means we are proposing to do so by withdrawing the regulated bulk mail compensation scheme from April 2009 in favour of solutions based on individual customer need.

“While the overall volume of lost, damaged and delayed post is very small in the context of the total amount of mail carried by Royal Mail, every item is valued by customers and they should be properly compensated when there are such problems.”

Source : Postcomm

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Positive Research for Direct Mail - 3rd December 2007

Scan the marketing press and you may be forgiven for thinking that the future of the industry lies in one discipline: digital. And with adspend now topping £2bn, according to the IAB, there is some strong evidence to back up these claims.

But this year's exclusive CCB fast.MAP/PM Marketing-GAP Report - carried out among 4,000 consumers selected to mirror the UK population profile and more than 200 marketers - suggests a slightly more cautious approach, with increasing numbers of consumers opening their direct mail and widespread resistance to mobile marketing techniques.

The so-called 'year of the mobile' has been predicted virtually since the prototype 'yuppy brick', but outside the confines of media land there are few signs of a breakthrough.

For instance, according to the CCB study, only one in 100 people likes to be contacted at all via mobile or SMS messaging. And while there are exceptions - 3 per cent like to receive banking information; 4 per cent competitions; and 2 per cent mobile phone services; local restaurants and takeaways; events, entertainment and DVDs by SMS - are clients wasting hundreds of thousands of pounds on services consumers do not want?

About a tenth of marketers correctly thought that 67 per cent of people would opt out completely if there were a text preference service (up from 65 per cent last year) - many marketers expected a far worse result.

Telemarketers should be heartened by the fact that the number of people who would not opt out has almost doubled, from 4 per cent to 7 per cent.

Meanwhile, the number of people opening and reading their direct mail has increased for the third year running.

Some 87 per cent of respondents said they did so, with very similar results appearing across all age bands and income groups. This breaks down to 48 per cent who open mail from any company and 39 per cent who only open mail from a company with which they already have a relationship - an increase of just over 3 per cent in each category - and 7 per cent more than in 2006;14 per cent more than in 2005.

More than half of the marketers were wrongly pessimistic in their expectation that less than a third of consumers would open mailpacks.

Awareness of the telephone preference service has increased steeply since last year when 28 per cent said they had heard of it. This year awareness had shot up to 60 per cent.

However, three quarters of those who knew of it felt it should be tailored to allow them to opt out of calls from specific market sectors or companies, rather than from all calls. Only 3 per cent of marketers expected there to be this high level of demand for a more sophisticated opt-out service.

Consumers have their price when it comes to what they believe to be an acceptable incentive, but surprisingly, that price is dropping - and since three fifths of coupons are delivered by direct mail (Valassis 2007 Coupon Report) this is good news for the direct marketing industry.

Last year, two-thirds of consumers said they would not bother to redeem a 20p coupon, this year half said they would.

All the coupon redemption figures reflect a massive increase in enthusiasm since the 2006 study, when only 46 per cent said they'd bother with a 50p coupon, now it's 57 per cent. Now 68 per cent will respond to a £1 coupon (57 per cent in 2006) and 70 per cent to one worth £5 (60 per cent in 2006).

"It seems that people are becoming more used to receiving and using coupons and vouchers delivered to their doors via the loyalty schemes of trusted retailers such as Tesco, M&S and Homebase. They are becoming more motivated to look for and use these rewards and the lower-value, door-dropped FMCG coupon is benefiting from this overall uplift in popularity," says David Cole, managing director of CCB fast.MAP.

The number of people saying they would never redeem a coupon when they had not bought the product specified on it remains the same as in 2006, at 49 per cent. But 76 per cent of sceptical marketers judged that far fewer would take this honest approach.

The number who admit to often misredeeming has fallen by 1 per cent to 8 per cent, as a third of the marketers anticipated - although most, 44 per cent, overestimated, judging that 11 to 30 per cent of people would often misredeem

Of course, digital vouchers are gaining ground but marketers need to be cautious here, too. Gap has found to its cost that digital is not the be-all and end-all, following the news that bogus 60 per cent off Web vouchers are in circulation.

As the old saying goes, buyer beware.

Source : Precision Marketing

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Royal Mail Performance Suffers - 30th November 2007

Royal Mail has confirmed that a summer marred by strikes and widespread flooding led to a downturn in service levels and a 15 percentage point drop in first class delivery rates during the second half of the year.

Rolling strike action, which was finally brought to a close after the Communication Workers Union and Royal Mail management reached an improved pay, pensions and working conditions agreement earlier this week, badly affected performance levels according to the company and its regulator, Post Watch.

Meanwhile, widespread flooding in Gloucestershire and South West England in July badly impacted on Royal Mail delivery rates.

According to Royal Mail figures, 78.4% of first class letters hit their next working day delivery target during the second half of the year when severe flooding and industrial strikes took place. This compares with a 93% on-target success rate for the first quarter of 2007.

Royal Mail said ongoing strike action and the aftermath of the floods would continue to affect service levels into the autumn, but that it was optimistic its agreement with CWU would allow it to invest in new technology and modernise.

Post Watch said it doubted customers would be surprised at the service drop-off levels, while Alex Batchelor, marketing director at Royal Mail, said the company was "very sorry" customers had been let down.

Batchelor said: "We are very aware that our customers simply didn't receive the service they deserve as a result of this year's strike action by the Communication Workers Union, and we're very sorry that they were let down.

"Customers are all too aware that strike action continued during the third quarter of the year, which means that targets will also be missed for the autumn period. But this week's vote in favour of our pay deal is good news for customers."

He added that the deal reached Royal Mail reached with CWU earlier this week would be a "green light" to invest in new infrastructure and build for the future.

The CWU members vote in favour of the improved 6.9% pay rise over two years stood at 64%, matching the 64% turnout. Meanwhile new working practices will now be trialled throughout Royal Mail.

Source : Brand Republic

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Royal Mail Zonal Fightback - 29th November 2007

Royal Mail has mounted an aggressive defence of its proposed zonal pricing scheme, claiming Postcomm’s rejection of its original plan was ‘fundamentally flawed’.

The 44-page response comes five months after Postcomm threw out the first proposal (precisionmarketing.co.uk) but includes only a few minor amendments. Royal Mail is sticking to its guns – the main tenet of its argument is that increased competition in the postal market is allowing private operators to cherry-pick areas where it is cheaper, and therefore more profitable, to deliver mail.

It has put forward a strong legal argument, claiming Postcomm has not “undertaken a competition economics assessment of the application” and that its stance is “inconsistent with EU and UK competition law on discriminatory behaviour”. It continues: “This is a fundamental flaw in Postcomm’s consultation proposal which Royal Mail believes is legally incorrect.”

Under zonal pricing, brand-owners will pay more for deliveries of items in many rural and some urban areas. Royal Mail maintains that the move is in line with its aim to make its services ‘cost-reflective’.

Source : Precision Marketing

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Postal Workers agree on deal - 27th November 2007

Postal workers have agreed a pay deal that was ratified last month between Royal Mail and the Communication Workers Union (CWU).

The decision ends a long-running dispute over pay and concerns about job cuts resulting from Royal Mail's modernisation plans.

Today's agreement will see postal workers receive a 6.9 per cent pay rise over two years and will ensure that they play a role in implementing change, a CWU statement said this afternoon.

"Rather than accept market rate strategy for pay this deal sets the benchmark for the whole of the postal industry to follow," said CWU deputy general secretary Dave Ward.

"The CWU has always recognised that change is needed in Royal Mail and this agreement demonstrates that the union is leading the change agenda."

Mr Ward added that the acceptance of the deal by postal workers "shows that they also recognise that change is needed in the business".

Royal Mail insists changes are necessary in order for the company to remain competitive following the liberalisation of the postal market.

Fears had been raised that 40,000 workers could be laid off as a result.

Source : Inthernews.co.uk


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DSA Pricing Rejected - 26th November 2007

Postcomm has rejected a request by Royal Mail, TNT Post and UK Mail to amend existing charges levied by Royal Mail on
downstream access mail. DSA or Downstream Access is where rivals of Royal Mail can sort and prepare mail themselves before sending it on for final delivery by Royal Mail.

Royal Mail had asked Postcomm to consider increasing DSA pricing to increase its profit margin. In contrast, TNT Post and UK Mail were calling for the exact opposite. Postcomm rejected calls for any changes to DSA pricing for the foreseeable future.

However, Postcomm has agreed to a further increase in the cost of a second class stamp - 29p by 2010 instead of 26p as
originally planned. Postcomm intends to release more concise documentation on the decision in due course but felt that it was prudent to announce the results of the consultation now to reduce market uncertainty and to allow Royal Mail to announce the increase in price for second class post as part of its licence agreement.

Source : Hellmail

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Data Gate - Missing Millions - 22nd November 2007

The Communications Workers Union has refused to get involved in the so-called ‘data-gate’, claiming that, as the union has members in all the postal operating companies, it cannot comment.

In the past, the CWU has been a fierce opponent of privatisation of the network but a spokeswoman declined to comment on the situation to precisionmarketing.co.uk

The company responsible for the loss of the two discs, TNT, won the contract from Royal Mail in April 2002 following a tender process, but has picked up a raft of business since the market was opened up to full competition at the beginning of 2006.

This shift of business has been widely criticised, as the Government is the sole shareholder of Royal Mail.

One industry insider says: “If Royal Mail had been responsible for this, they would have been hauled over the coals. What questions are being asked of TNT?”

In a statement, TNT says: “We are co-operating fully with Her Majesty’s Revenue & Customs and the Metropolitan Police in relation to the ongoing investigation into the missing HMRC computer discs.

The company co-operated fully with HMRC when the problem first arose and has continued to do so throughout the period since the discs were reported as lost.

“TNT operates a general internal mail system for the HMRC and other associated Government agencies. Options exist for the sender to choose a consigned service e.g. full track and trace.”

General mail does not carry a track and trace mechanism and hence it has been impossible, in this instance, to conduct an audit to identify if the item entered the system.

TNT carries up to 100,000 items of mail each night on behalf of HMRC.


Source :Precision Marketing

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Backlog after Strikes - 10th November 2007

Postal deliveries in a part of south London are still being affected by last month's postal strikes.

Mail delivery watchdog Postwatch said it had received a number of complaints about deliveries in Streatham, south London, since the official strikes.

It said some residents and businesses were getting late deliveries, and on some days no delivery at all.

The Royal Mail said unofficial strikes and "poor industrial relations" were to blame for the backlog in Streatham.

The October strikes were the results of a bitter dispute over flexible working conditions. The Communication Workers Union (CWU) has since endorsed a Royal Mail offer.

The series of 48-hour stoppages and unofficial walkouts was estimated to have cost Royal Mail more than £200m.

"Royal Mail need to resolve the operational and industrial relations problems behind these services failures," said Terry Stafford of Postwatch.

"In the meantime we are asking that they keep customers informed about the extent of the problem, so that people can make alternative arrangements where possible."

A Royal Mail spokesman said: "We apologise for the delay in clearing remaining backlogs in the Streatham area.

"This is due to the unofficial industrial action in parts of south and east London which followed the CWU industrial action and is also due in part to strained industrial relations.

"Customers can be assured we are doing all we can to clear the remaining few backlogs as soon as possible and this has included drafting in extra management volunteers and reserve staff."

Source : BBC News

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Ballot voting this week - 5th November 2007

Postal workers will start voting later this week on whether to accept a deal aimed at ending their long-running dispute over pay, jobs and working conditions.

The Communication Workers Union said it will send ballot papers to its 130,000 members from Friday.

The ballot closes on November 27 and the result will be announced soon afterwards.

Postal workers have been involved in a series of strikes and other forms of industrial action since the summer which crippled mail deliveries.

A deal aimed at resolving the row was agreed between the union and Royal Mail.

Source : Guardian Unlimited

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Postcomm Rebuke CWU Claims - 5th November 2007

Postcomm has hit back at union claims that Royal Mail’s fall in profits has been fuelled by the regulator’s ‘irresponsible decisions’, instead blaming it on the rise of new media and recent strike action.

In a statement yesterday the Communications Workers Union (CWU) said: “Royal Mail’s profits are disappointing and come as a direct result of mismanagement, Postcomm’s irresponsible decisions, and unfair competition.”

But the regulator refutes this accusation, citing the fact that consumers and businesses are increasingly turning to the Internet, a move which has been exacerbated by the CWU strike. It has also blames pension fund costs.

Royal Mail has also defended its decision to pay chief executive Adam Crozier a bonus worth more than £500,000 despite widespread criticism that the move sends out the wrong signals to postal workers who are still battling to save their jobs (precisionmarketing.co.uk).

Source : Precision Marketing


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Letters Business Down - 1st November 2007

Royal Mail said on Wednesday revenue in its letter business was down 78 million pounds ($162 million) in the first five months of the current year and annual operating profit dropped by one third.

State-owned Royal Mail, which lost its 350-year monopoly on postal services last year and recently faced strikes by workers, said it expected to be trading around breakeven this year and next due to declining mail volumes and investment.

The group reported operating profit for the full year 2006-2007 year of 233 million pounds, in line with expectations, following a sharp rise in pension fund costs to 722 million pounds from 193 million, falling mail volumes and increased competition.

Royal Mail said it faced making annual payments of 800 million pounds over the next 17 years to cover both its pension deficit of around 5 billion pounds and ongoing contributions.

MODERNISATION

Royal Mail's Chief Executive Adam Crozier has said the company desperately needs to modernise, and was investing around 4 billion pounds to do so, to compete and prevent the business from failing.

The firm has plans to reduce its workforce by around 40,000, or 27 percent, by automating mail sorting processes and to fight private competition from Business Post, Dutch mail company TNT NV and others.

The growth of email, text messages and the availability of vehicle tax discs and television licences online have also dented profits.

The Communications Workers Union (CWU) said earlier this month over 130,000 staff walked out in a dispute over pay, pensions and shift changes, causing delays and disruption, particularly to firms dependent on mail order business.

Source : Reuters

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Sunday Collections - 31st October 2007

The Royal Mail was urged to perform a u-turn over its controversial decision to axe Sunday collections. A cross-party group of MPs, headed by Labour's David Drew (Stroud), signed a motion condemning the move, which the Royal Mail says will cut costs and improve efficiency.

Mr Drew's motion stated: "This house notes with concern the decision taken by Royal Mail and endorsed by Postcomm and Postwatch to end the collection of mail on Sundays and bank holidays." The MPs were "equally worried that this decision appears to have been based on a survey of 1,000 people".

Source : Guardian Unlimited

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Senses through the mail - 30th October 2007

Royal Mail has partnered with sensory marketing specialist Brand Sense to cater for brands and marketers interested in engaging direct mail recipients by using two or more of the five senses.

Royal Mail plans to offer marketers the ability to develop and deliver mail packs that appeal to senses such as taste, sound and smell.

Royal Mail said it would be training more than 300 of its sales staff in the coming months to work with business customers to foster new methods of attracting better response rates from consumers, by creating mailing campaigns that leverage two or more of the five senses.

The partnership follows the April launch of Royal Mail's Personalised Integrated Media service, which allows direct marketers to specially create CDs using Sony's manufacturing, printing and packaging facilities business Sony DADC.

Brand Sense said its own research had found consumers responded to mailings based on their ability to establish an "emotional connection" through the use of sight, sound, taste, touch and smell.

The agency said the more a mailing campaign can connect with people's senses, the more likely it is to appeal to recipients and produce a better response rate.

Antony Miller, head of media development at Royal Mail, said: "Brand development continues to be a significant activity for major advertisers as they seek new and innovative ways to communicate with their customers, as Brand Sense research shows they increasingly need to provide a connection at a deeper emotional level.

"We are therefore working in a unique partnership with Brand Sense to develop a sensory approach to direct mail to demonstrate direct mail's role beyond direct response, focusing on its ability to enhance brand communication."

Source : DM Bulletin

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TNT Scoops Homeserve Business - 26th October 2007

Homeserve, the emergency policy and repair business, has handed TNT Post its mailing contract, signaling another blow to Royal Mail.

The deal, which will see Homeserve move its business from Royal Mail to TNT, is due to competitive prices and TNT’s clearer view of its business delivery service.

The move will cause another blow to Royal Mail - already in the midst of internal turmoil - as Homeserve is just one of the many businesses that has moved its business out of the postal operator in the past year. Royal Mail lost out to TNT for Emap’s £1.6m subscriptions contract in August and BT’s delivery of The Phone Book contract in April (precisionmarketing.co.uk).

The repeated loss of business and necessity to keep up with competition is one of the main reasons why Royal Mail wants to modernise its business, which has resulted in weeks of postal strikes recently (precisionmarketing.co.uk).

TNT also handles contracts from customers including Centrica, Lloyds TSB, HBOS and Barclays

Source : Precision Marketing

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CWU Executive Endorse the Deal - 25th October 2007

The deal to end the ongoing and bitter postal dispute between Royal Mail and the Communication Workers Union (CWU) has been agreed.

The union's postal executive has endorsed a deal aimed at ending the row over pay, working practices and job losses.

The CWU's 130,000 members will now be balloted on whether they will accept the deal before the long-running dispute is finally ended.

Dave Ward, CWU deputy general secretary, was bullish on the deal: “This has been a long dispute but the agreement reflects the fact that change in the company will only be managed with the union and the workforce,” he said.

“We have made significant gains on pay and related issues and the union’s role in negotiating change in the workplace has been strengthened.”

The key areas of the agreement include:

Pay: A pay rise of 6.9% over 18 months, coupled with a lump sum of £175 immediately and a further lump sum of £400 linked to local implementation of change.

Flexibility: All flexibility and change will now be directly negotiated with the CWU. There will be no change to working hours without agreement. All automation to be subject to further agreement with CWU.

Other areas: The agreement also includes productivity arrangements, attendance patterns – including no change to Saturday attendances – and network changes.

Pensions: Any pension reform has been formally de-coupled from the pay agreement. The issue will now be subject to a formal 90 day consultation process. The union wants to protect existing worker’s final salary scheme and secure rights for new staff.

In a joint statement the CWU and Royal Mail said: “Royal Mail and CWU recognise that the scale of the recent dispute has the potential to damage relationships between managers, reps and employees.

“Everyone wants to put the dispute behind us and we are all committed to restoring good industrial and employee relations at all levels.”

Source : Personnel Today

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Union to vote today - 18th October 2007

After one of the most bitter industrial disputes of recent years, unions will today vote on whether to accept a deal with Britain's Royal Mail covering pay, pensions and modernisation.

But as hopes rise that further one-day national strikes can be avoided this week, the question is whether Royal Mail has won the freedom it needs to bring in far-reaching changes to its working practices, which are essential if it is to survive in a competitive postal market.

Since the 1980s, management at what was then called the Post Office have struggled to improve efficiency in an organisation whose sorting and delivery operations would be recognisable to a visitor from the 19th century. From early in the morning, bags of mail are hauled around the 1,400 delivery offices across the country and sorted by hand so that the post can be delivered to 29m addresses.

In other European countries machines speedily sort the post for delivery - making post offices 40 per cent more efficient than their British counterparts.

Eighteen months ago the government gave Royal Mail a £1.2bn ($2.4bn, €1.7bn) loan to invest in such equipment - modernisation that could lead to the loss of as many as 40,000 jobs.

In February it gave Allan Leighton, the postal operator's chairman, the go-ahead for a "phantom share" scheme that would reward staff for co-operating with efficiency improvements. But the management was unable to persuade the union to agree to changes in working practices needed to extract the maximum efficiency gains from automation - or to accept a 2.5 per cent pay increase coupled with up to £800 of productivity bonuses.

Four years ago members of the Communication Workers Union narrowly rejected a strike over a 14.5 per cent pay increase tied to staff cuts following abolition of a second daily postal delivery. In return they were rewarded with a £1,074 "share in success" bonus in 2005 after Royal Mail notched up a record £537m profit.

That defeat for the union was seen as heralding a new era for Royal Mail but Mr Leighton and Adam Crozier, his chief executive, seem to have lost the support of the rank and file since 2003. The 130,000 members of the CWU voted overwhelmingly in June for the first national strike in 11 years on pay and the latest modernisation plans, sparking more than three months of industrial action.

Up to a third of staff had been turning up for work in the latest strikes but wildcat action over a later starting time introduced last week showed the depth of opposition to changes in working practices.

The agreement sealed on Friday at the Trades Union Congress is thought to involve a 6.9 per cent pay increase over two years and the closing of the final -salary pension scheme to new members.

Previous attempts to modernise foundered on the rock of union militancy. But now that private sector operators can bid for lucrative -contracts for collecting and sorting post for big mail users, the former monopoly faces a bleak future unless it can compete with its new rivals.

Source : Financial Times

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At least a week to clear backlog - 16th October 2007

The postal strikes have left 120 million letters and parcels stranded in sorting offices, with the post watchdog warning that the backlog will take until next week to clear.

The news came as it emerged that more than of half of small firms want to stop using the Royal Mail after the strikes which have cost the London economy alone more than £300 million.

Postal workers' leaders were last night meeting to decide whether to recommend calling off the dispute over pay, jobs and pensions which has crippled mail deliveries for weeks.

However, the conference was adjourned and will resume today.

Sources at the Royal Mail said there were one and a half days worth of post — 120 million letters and parcels — stuck in the system after last week's five-day strike and unofficial stoppages.

This could take "several days" to clear, the source said.

However Postwatch, the industry watchdog, estimated the backlog at 200 million letters and parcels. This would take a week to clear, it said. Andy Frewin, a spokesman, said: "We would expect things to be back to normal next Monday if they work as normal this week."

A survey by the British Chambers of Commerce found that 55 per cent of small firms are now more likely to use private delivery companies. Natalie Evans, the head of policy, said: "This result really hammers home the damage that this dispute has done to Royal Mail.

"Small businesses rely on a decent post service and have been let down badly over the past few weeks."

The London Chambers of Commerce found that four out of five company directors believe the series of strikes had a negative effect on their business, costing the Capital's economy alone more than £300 million.

The survey of more than 250 company directors showed that almost half thought the strikes had cost their firm at least £1,000 each.

Most of the unofficial actions subsided yesterday, with thousands of workers in east London and Scotland returning to work. However, in Liverpool a hard core of 800 postal workers voted not to return.

Mark Walsh, a Communication Workers Union official, said the workers were waiting to see the response to the peace deal from the union's executive.

"The members have made the decision that they are not going to accept something that they have not seen in black and white," he said.

More than 50 delivery offices and mail centres were hit by the unofficial action at one stage last week when fresh rows blew up over changes to shift times. The 15-strong executive of the CWU was considering a "terms of agreement" document drawn up between union boss Billy Hayes and the Royal Mail chief executive, Adam Crozier, on Friday.

The union's 130,000 members will vote on the deal if it is accepted by the executive.

The deal thrashed out last week includes a 6.7 per cent pay rise over two years, as well as agreements on flexible working and pensions.

More strikes, affecting thousands of van drivers and mechanised centres, are scheduled for tomorrow and Thursday.

However the CWU is likely to postpone these if its executive approves the new deal.

News of the peace deal will be a vindication of the hard line taken by Gordon Brown and the Business Secretary John Hutton.

However, there could be a backlash with the CWU understood to be examining whether to withdraw support for the Labour Party in protest at the "hands off" approach.

Last week some local union officials were being asked by representatives whether they wanted to continue contributing to the union's political fund.

The CWU contributes around £500,000 to the party every year. A union spokesman said she had not heard that they might withdraw support for the party.

Source : Telegraph

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Agreement Reached - 13th October 2007

An agreement has been reached that could lead to an end to strike action by postal workers.

The breakthrough came late on Friday after marathon talks between Royal Mail and the Communication Workers' Union at the TUC in London.

Details are yet to be announced, but it is hoped the deal will end the dispute, which centres on pay, pensions and flexible working.

The terms reached will be considered by the union's executive on Monday.

The deal was ratified by Royal Mail boss Adam Crozier, Communication Workers' Union (CWU) general secretary Billy Hayes and his deputy Dave Ward, and TUC general secretary Brendan Barber.

If it is supported by the executive, it is likely to be put to the vote by the CWU's 130,000 members.

It is hoped the resolution will bring to an end the long-running row over Royal Mail's modernisation plans, which union officials had feared would see 40,000 jobs lost.

Injunction

Earlier on Friday, the Royal Mail was granted an injunction to stop CWU members at sorting centres and delivery offices striking next week.

The company argued that the union had not given accurate figures for the number of staff affected by the strike - a legal requirement.


PLANNED 24-HOUR STRIKES
15 October from 1800BST: Mail sorting offices and airports
16 October from 0300BST: Deliveries and collection hubs
17 October from 1200BST: Royal Mail drivers
18 October from 1200BST: Manual data entry centres
18 October from 1400BST: Heathrow world distribution centre
Source: CWU

The union insisted the strike was legitimate.

The CWU had announced rolling 24-hour strikes to start on Monday and end on Friday, designed to cause maximum disruption to mail services with minimal financial loss for its members.

The injunction did not apply to all parts of the Royal Mail, and in the wake of Friday's agreement it was not clear whether some groups, such as drivers, would take part in the walkouts.

Thousands of Royal Mail customers across Britain have suffered from disruption since official protests by workers began in June.

Source : BBC

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2011 and Full Liberalisation - 11th October 2007

(Dow Jones)--The European Commission must be pleased with Royal Mail's efforts in preparing the U.K. for the full liberalization of E.U. mail industry.

Poor service and intermittent strikes continue to spur the company's customers to patronize competitors such as TNT and U.K. Mail Ltd, as resistance to using alternatives to the Royal Mail erodes as the British market opens to competitors.

The anger among Royal Mail's customers caused by the disruption should be good news for the likes of Deutsche Post that are eyeing the U.K. market post-liberalization in 2011.

Royal Mail customers have unsurprisingly looked elsewhere for postal services after four days of strike action this week and threats of more disruption to the Royal Mail's postal service.

Royal Mail has lost 20% of the business collection segment to its competitors in the last four years - Amazon canceled a GBP8-million contract with Royal Mail in June - and saw a decline in its 2006-2007 financial year volume of 10% compared with the previous period. However, it retains a 99% share of deliveries.

That loss of business is the last thing Royal Mail needs as it prepares for full competition in four years' time.

It's 40% less productive than rivals such as Deutsche Post, down mainly to the strong labor union that prevents the automatization seen in rivals' operations. The union's also ensured that Royal Mail workers are paid 25% more than competitors' too.

Management has a long way to go to get the company ready for full competition.

But as good as the strike may be in the long-term for Royal Mail's competitors, in the short-term it's bad for the U.K. economy.

Retail sales are one of the few remaining drivers of an increasingly fragile U.K. economy, after house prices have begun to fall, business confidence has dropped and the official outlook for GDP growth in the U.K. for 2008 has been cut by 50 basis points.

Retail sales over the Internet stand to be hit by the postal strike. That's worrying because they comprise 15% of total sales, worth GBP4 billion in July, according to the Interactive Media in Retail Group.

And small businesses have found the strike devastating as they don't have the resources to arrange to use Royal Mail's rivals on short notice or afford the alternatives over an extended period.

What's more, they make up 95% of all U.K. businesses, and 94% of them use Royal Mail exclusively.

And they're just one of Royal Mail's market segments that rivals are waiting to snap up in 2011.

Source : The Business

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Wildcat Strike Action - 11th October 2007

The official 48-hour strike ended at 3am yesterday, but postal workers staged wildcat strikes in 24 delivery offices after a new row broke out when workers were told their shift times had been changed.

The crisis in the postal service threatened to spiral out of control as workers in east London and Nine Elms, central London, joined workers at about 30 sites, including Glasgow, Merseyside and Lancashire on the second day of unofficial strike action.

The show of defiance came despite both Gordon Brown, the Prime Minister, and John Hutton, the Business Secretary, telling the unions to stop the strike action immediately.

The pressure seemed to have worked last night with the Communications Workers Union confirming that talks over pay, pensions and changes to working practices had restarted.
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The negotiations had broken down after eight days earlier this week and a rolling series of 24-hour stoppages next week is likely to bring the national service to its knees. The unofficial action sparked fears the union was losing control and, by last night, 1,900 workers had still not returned to work at 12 depots, including Liverpool and parts of east London. The protests were at changes to their hours imposed by managers.

The protesting workers said they arrived for a shift starting at 5am but were told that the Royal Mail had implemented changes to shifts so they could not start until 6am.

Up to 400 workers at the Royal Mail depot in Liverpool city centre staged the protest in their staff canteen. Ray Lucas, a local union spokesman, said: "The workers are still in dispute with management over shift start time changes which are being imposed on the staff."

Around 130 workers at the Royal Mail sorting office in Victoria Road, Glasgow refused to work after being told their hours had changed. They returned to work after a few hours. Union leaders were meeting yesterday to review progress in the dispute. A spokesman for the Communications Workers Union said: "We do understand the frustration of members and the provocation they are receiving from Royal Mail managers. This is what happens when the Royal Mail tries to impose change."

The Royal Mail played down the wildcat strikes. A spokesman said: "Royal Mail got back to work today and is making good progress in clearing and delivering delayed mail.

"Out of a workforce of 130,000, fewer than 1,900 were not working normally which means that today more than 98 per cent of our people have simply got on with the job of getting mail to our customers."

Gordon Brown urged postal workers to settle the dispute, telling MPs that there was "no justification" for the row continuing.

Forty Labour MPs have tabled a Commons motion urging the Government to intervene in the dispute.

John Grogan, the MP for Selby, said: "One of our greatest public services is grinding to a halt and business and individuals are being significantly affected. Ministers need to pick up the phone and get talking to both the union and management."

The motion states ministers should take "a more active and interventionist role in trying to ensure a fair, just and negotiated settlement to the current dispute".

It urges Mr Hutton to "use his influence to urgently obtain a settlement".

Source : The Telegraph

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Flexibility Key to a Deal - 9th October 2007

The strike that has disrupted postal services is set to escalate after talks broke down last night, possibly igniting Britain's most serious industrial dispute for 20 years.

Up to 130,000 union members remain on strike, while Adam Crozier, the Royal Mail's chief executive, today traded accusations with union officials.

Mr Crozier said union claims of "slavery" over the way Royal Mail makes its staff work were "cobblers" and said the company was only trying to make people work the hours for which they were paid.

He told the BBC Radio 4 Today programme that the two sides were close to reaching an agreement on pay and pensions, leaving flexibility as the outstanding issue.

"All we are asking is that people work the 37 hours 20 minutes for which they are paid. If they work longer than that, of course they will receive overtime," Mr Crozier said.

He argued that Royal Mail staff were paid 25% more than workers in rival post firms and said other companies in the business were 40% more efficient, which was why the Royal Mail needed a long-term solution to the dispute.

The Communication Workers Union has been in talks with Royal Mail bosses for eight days, but they have failed to reach a deal. The union said a series of fresh actions would start on Monday unless the dispute was resolved.

The planned series of new 24-hour strikes by different departments is designed to disrupt services while ensuring workers lose just one day's pay.

Brendan Barber, the TUC secretary general who chaired the negotiations, said: "I am very disappointed that this phase of intensive talks has not resolved the dispute when real progress has been made and we have been edging towards an agreement."

He said he would keep in close touch with both parties to "continue to seek to find a way forward".

Gordon Brown told MPs yesterday that the government would not intervene in the dispute, but would not "stand idly by".

Analysts said the strikes would severely damage Royal Mail after it had appeared to be over the worst of its deep-seated problems.

"Royal Mail has been moved from a position of being reasonably profitable, now to a position of being zero profitable," Ian Senior, an economist, told Reuters. "And I suspect after this strike it will be a loss-maker."

He said that ever since postal regulator Postcomm was established, it had attempted to "interfere, micro-manage" the postal service, holding prices down well below rates charged by competitors in Europe.

The action would serve to "hasten the long-term decline of the letter as a form of communication", a process started by the advent of email, he said.

The cost to Royal Mail of the dispute has been put at £260m and householders are being warned it could be up to three weeks before deliveries get back to normal because of the backlog. Royal Mail deals with 80m letters and parcels a day.

Thousands of concert tickets, passport applications and house sale documents are unlikely to be cleared before the next round of stoppages kicks in and there are fears that the dispute could last for months.

Guardian Unlimited

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Further Action Announced - 9th October 2007

CWU has today (Monday) served notice to Royal Mail for further strike action to take place next week unless an agreement is reached.

This action will follow a programme of 24hour functional strikes commencing Monday 15th October. This means Royal Mail will face a further week of continuous disruption to mail services and all postal staff will carry out one full day’s strike, as outlined below.

* Mail centres and airports - duties, scheduled attendance and overtime commencing at or after 18.00 Monday 15th October 2007 and before 18.00 Tuesday 16th October 2007.

* Deliveries and separate collection hubs - duties, scheduled attendance and overtime commencing at or after 03.00 Tuesday 16th October 2007 and before 03.00 Wednesday 17th October 2007.

* Network (drivers) - duties, scheduled attendance and overtime commencing at or after 12 noon Wednesday 17th October 2007 and before 12 noon Thursday 18th October 2007.

* MDECs (mechanised data entry centres) - duties, scheduled attendance and overtime commencing at or after 12 noon Thursday 18th October 2007 and before 12 noon Friday 19th October 2007.

* International/Heathrow World Distribution Centre - duties, scheduled attendance and overtime commencing at or after 14.00 Thursday 18th October 2007 and before 14.00 Friday 19th October 2007.

Talks continue between CWU and Royal Mail.

Source : CWU Web Site

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Managers Strike Averted - 8th October 2007

As frontline Royal Mail workers continue their series of 48-hour strikes, the possibility that Royal Mail managers will also strike has been averted after a deal with the union Unite.

Royal Mail and Unite reached an agreement on Friday, which is expected to pacify the 12,000 Royal Mail managerial staff who are Unite members.

Unite had threatened strike action over pay, pensions and modernisation.

Paul Reuter, national secretary of Unite, told BBC Radio he hoped the deal would help Royal Mail and the Communication Workers Union reach an agreement, but recognised the CWU had other issues to resolve.

The Royal Mail and Unite deal consists of a 2.5% increase in base salaries, promotion increases and allowances from April 1 2007 (backdated) to March 31 2008, with further increases of 2% from April 1 2008 and 2.8% from July 1 2008. It also covers bonus arrangements and pay grade changes.

Unite has agreed to support Royal Mail's pension proposals, which call for the final salary scheme to be closed to new members on January 31 2008 and replaced by a defined contribution scheme.

Source : Brand Republic

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Buoyant UK Mail Results - 4th October 2007

Business Post Group Plc, a U.K. mail delivery company, said fiscal first-half sales increased 9 percent as its mail unit won more contracts.

The company's U.K. Mail division boosted revenue 60 percent in the six months through September as it secured ``a significant number of substantial contracts,'' Business Post said today in a Regulatory News Service statement.

The market for delivering parcels to householders was ``increasingly competitive,'' the Slough, England-based company said. Results for the period will be released on 14 November.

Source : Bloomberg.com

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Strike Action Brings Innovation - 27th September 2007

Digital media firms are capitalising on disruption to the postal system to court print customers.

YUDU Media, which offers a service to convert printed documents into digital editions, is offering companies half-price discounts over the strike period in order to attract new business.

The company claims that taking a document from print to digital takes a few minutes and can help companies that need to get time-sensitive material to people at a time when the postal service is unable to cope.

A spokesperson for YUDU told printweek.com: "Typically, enquiries increase by a third in months where there is a postal strike and we also experience a significant increase in orders for one-off jobs."

However BPIF public affairs executive Bob Toal said he was unaware of any companies abandoning post for electronic means in the light of the strike.

"We have had no companies approaching us with details of any changes due to the postal strikes," he told printweek.com.

He added that Royal Mail's modernisation plan, which is at the heart of the industrial dispute, is necessary to ensure the service remains a competitive platform versus email and other digital formats for communication.

"I am attending meetings held by Postwatch, the postal regulator, to have an input into the regulation process. It is evident from these meetings that the Royal Mail needs to modernise if they are to win new business.

"New services and a more customer-focused approach are key to its success. In the long run, if it does not rise to the challenge, companies that depend on business mail will look to other mediums to deliver goods and messages," he said.

But the Direct Marketing Association's head of postal affairs Alex Walsh was more downbeat about this latest round of strikes.

He told printweek.com: "I've not heard of any major or permanent changes up to now. Companies have made temporary arrangements to cope with the effects of industrial action such as using alternative media or delaying/bringing forward mailings.

"The new wave of strikes however are much more serious as they put doubt in users minds about the reliability of post in the long term and prompt them to find alternatives - and having changed they don't come back."

Source : Print Week

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D2D Activity Suspended by Royal Mail - 27th September 2007

Royal Mail has cancelled its door-to-door deliveries of leaflets for the next three weeks, as the next round of national strike action looms. The group has told its door-to-door, mainly advertising, customers that it will not be able to carry out the work for more than 80 million items in a move that shows its lack of confidence in being able to avert four days of national walkouts beginning next week. Talks between the two sides resumed yesterday, but the Communication Workers Union is angry over Royal Mail’s plans to cut costs and close its final salary pension scheme to all employees.

Source : Times Online

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Royal Mail condems CWU Strike Plans - 25th September 2007

Royal Mail today condemned the decision by the Communications Workers Union to call further strikes. The decision comes after five weeks of discussions, under the auspices of the TUC and ACAS, to try to resolve the issues that lie behind the dispute. During those talks we offered both short and long term solutions, while keeping within the 2.5% available for pay this year but rather than accept a way forward the union tabled proposals that would cost the business £2.4 billion over four years.

The company also criticised the CWU for failing during seven months of talks to produce any serious proposals that could help resolve the issues that lie between us and move the business forward.

It is clear from our discussions that the CWU leadership does not begin to understand the challenges facing Royal Mail and the very serious consequences for the business if we do not push ahead and modernise.

Instead of developing concrete and viable proposals for the business, which they have publicly committed to do, the CWU is clinging to its historic stance of promising “working groups” to discuss changes in the future for money upfront – changes which in the past have always failed to materialise. The union’s unrealistic and unreasonable demands show how the CWU leadership has again failed to understand that no change is not an option and that talking shops will not secure the future of the Royal Mail.

Royal Mail also criticised the union for misleading their members over the important issue of pensions. The union has wrongly said that we have taken “executive action” on pensions when they know the company has not yet started its official 60-day pension consultation, which will begin in the first week in October and during which we will be listening to the views of all our people and other stakeholders. Any other future operational changes recently announced by the company have been done in line with our existing agreements with the union and give the proper notice period before the change.

The call for further strikes does not change the urgent need for Royal Mail to modernise and become more flexible and efficient if it is to survive. For our people, flexibility would simply mean working the hours they are paid to work and to do what they are trained to do in a safe environment – something which has been taken for granted for many years in almost every company in the UK.

The union’s repeated refusal to contemplate the changes we must make if we are to be able to compete in an increasingly tough market simply shows that they are completely out of touch with UK industry and the reality of how competitive markets work.

We have been negotiating with the CWU over pay and flexibility since March 2007 and, as a result of the CWU decision to return to strike action, we will now begin to make the changes that we have been discussing with the union and our people for many months.

Royal Mail would like to thank both the TUC and ACAS. As ever, we remain willing to meet with the union at any time.

The facts remain:

* The mail market in the UK is declining by 2.5% per year
* Royal Mail has lost 40% of bulk business mail to rival postal operators
* Overall this year, rivals will handle one in five of all letters posted in the UK
* Our rivals are 40% more efficient not because their people work harder but because they have already modernised – as we must now do - and have much more technology
* Our rivals pay their people 25% less than we do at Royal Mail

Source : eGov Monitor

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RFID Opportunities in the Mail Supply Ch - 24th September 2007

At the IDTechEx RFID Europe event in Cambridge last week, a conversation with Motorola's RFID specialist Andy McBain threw some light on the business drivers for organisations' dabbling with RFID.

It appears that the demands of satisfying the regulator, Postcomm, is what may ultimately drive the Post Office towards RFID adoption, while in Europe, other postal organisations have already become RFID cheerleaders.

In February last year, Postcomm proposed financial penalties of £11.7m for breaches of its licence regulations in 2004/5 to protect the mail and deliver it on time. The driving role of the regulator means organisations such as the Post Office now need to know where breakdowns in the network occur, so customer service levels increase, and the Post Office doesn't incur future fines.

In fact, the postal sector offers the largest potential market for RFID by volume of tags. According to IDTechEx, the International Postal Corporation's Automatic Mail Quality Measurement (AMQM) system is the largest RFID network in the world. The IPC is a cooperative association of 23 postal operators around the world set up to develop and monitor postal services, and is using RFID for quality of service monitoring.

The Spanish Post Office, Correos, claims to have implemented Europe's largest UHF system in any sector, and is using 5000 passive RFID tags to monitor the movement of the tags in the system and log the performance of the system in real time. Some good background on the various postal services' usage of RFID can be found on this IDTechEx brief by Raghu Das.

For now, the Post Office has embraced mobile technology more than RFID, simply to ensure that the audit trail for package delivery is more immediate. (Sign for a package at your door these days, and it's more likely to be with a stylus on a handheld device than a pen on a ragged piece of paper)

But you can expect the Post Office to perhaps follow Correos' example in detecting bottlenecks or delays in the mail supply chain. And ultimately help keep the regulator sweet!

Source : Computer Weekly

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Strike may escalate - 24th September 2007

Thousands of Royal Mail managers could be balloted for strikes in a dramatic escalation of the industrial unrest currently hitting the postal organisation.

Unite said its 12,000 members working as managers in the postal service could soon vote on whether to take industrial action in a row over pensions.

The Royal Mail is already embroiled in a bitter dispute with the Communication Workers Union which has called two 48-hour strikes next month in a long running dispute over pay and jobs.

Unite described a possible proposal over pensions as "the great mail robbery" which it claimed could reap the Royal Mail £1.5 billion.

The union will meet the company to discuss planned changes to the pension scheme, and said it expected employees to be presented with the proposals this week.

Unite said it believed the proposals included closing the final salary pension scheme to new workers and raising the retirement age.

National officer Paul Reuter said: "We call upon Royal Mail to honour its commitment to preserve the past service benefits that have been built up and paid for by our members."

The union said it had been given a commitment earlier this year but the final salary pensions scheme would be safeguarded.

"Failure by Royal Mail to respond positively will leave Unite with no option other than to ballot its members for strike action."

A spokesman for the Royal Mail said: "No decisions have yet been taken as we have been clear that we will consult our people on proposals with the clear objective of protecting our existing people's pensions in a way that is both affordable and exposes no one to unacceptable risks going forward."

Source : The Press Association

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UK Mail's Response to Strike Action - 21st September 2007

UK Mail has slammed rival Royal Mail over continued strike action, warning it will damage the future of the mail industry. Guy Buswell, chief executive of UK Mail parent Business Post Group, has spoken out following this week's announcement of further Royal Mail strike action.

He says: "The long-running nature of this dispute is extremely detrimental to the whole mail business. In short, we believe this action, if it continues, is in danger of damaging the future of the mail industry. Someone needs to wake up and smell the coffee. Who's thinking about the customers here?"

He adds that he is keen to maintain good working relationships with Royal Mail and the Communications Workers Union, because UK Mail relies on Royal Mail for the "final mile" delivery.

"This is a business model we intend to stick with in the future, as we believe it is the most sensible option for delivery of mail in the UK," says Buswell.

Talks between Royal Mail and the CWU have been taking place for seven months in a dispute over pay and working conditions. The union this week announced two further strike dates in October, in a move condemned by Royal Mail, which says it is still willing to talk, but needs to modernise in order to prevent the business from failing.

The CWU said in June that its members had voted in favour of industrial action due to Royal Mail's "below inflation pay offer", and its plans to reduce the workforce by about 40,000, or 27%, by automating mail-sorting processes.

Marketing Week

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More Strike Action Announced - 20th September 2007

The Communication Workers Union is announcing today (Thursday) that there will be further strike action in response to Royal Mail’s draconian and destructive proposals on pay and business changes. There remains no agreed pay deal, which was due on 1st April 2007, and the pay offer is linked to unacceptable propositions on flexibility and decreased pensions benefits. Royal Mail has announced the implementation of unagreed operational changes.

The CWU’s Postal Executive have agreed the following strike dates:

A 48 hour strike on the 5th & 6th October.

A 48 hour strike on the 8th & 9th October.

Week commencing 15th October a rolling programme of functional strikes to continue weekly until the resolution of the dispute.

Dave Ward, Deputy General Secretary, said: “Despite five weeks of negotiations Royal Mail have failed to take on board the union’s message that in order for the business to succeed Royal Mail need to invest in their workforce.

“Strikes are a proportionate response to an employer that is completely out of control. Rather than running the business, Royal Mail’s actions demonstrate they are intent on destroying it.

”The workforce has had enough of Royal Mail messing them around. We’re not going to tolerate an employer that ignores its workforce, ignores the union and ignores its customers.”

Source : CWU Web Site

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CWU and Royal Mail in fresh talks - 19th September 2007

The prospect of an end to the postal dispute – first launched in June – has moved a step closer after the Communications Workers Union (CWU) agreed to hold fresh talks with Royal Mail.

The move follows an invite from Royal Mail to sit down and thrash out a deal to finally resolve the action. CWU has agreed to engage in a counter proposal, which the Postal Executive is currently finalising.

The Executive will also be looking at the union’s latest strike action plans over operational changes and pensions.

Last week, talks between postal chiefs and workers broke down, which resulted in fresh postal strike action plans by the CWU. Royal Mail claimed to be ‘extremely disappointed’ at the CWU’s decision to take further strike action after a four week ‘period of calm’ (precisionmarketing.co.uk).

Source : Precision Marketing

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Business Mail Redirection - 18th September 2007

The Royal Mail is planning to launch new post redirection services to all businesses - even those in multi-tenanted buildings.

The once universal service has not been available for more than five years because Royal Mail could not justify the cost of sorting high volumes of mail delivered to offices housing more than one firm.

But a spokesman said Royal Mail was aware that many businesses would pay for such a facility. "The service we are looking to develop will have a variable price depending on how much mail we will have to sort through," he said.

Royal Mail does offer a "diversion" service to some multi-occupancy buildings but only when local sorting offices have the capacity. More than 4,000 companies use this service, which costs £185 a year.

The new service comes too late for one Your Business reader, who is critical of the Royal Mail for failing to say clearly that it does not redirect such business mail.

Solicitor Adam Cohen moved his firm, Adam Cohen Partnership, from Hammersmith, west London, to rural Suffolk.

He said a form from a post office was used to request a redirection of business mail.

Unaware of any problem, Mr Cohen paid for the £70 service in mid-August and the move took place on August 31. But the mail did not appear. A letter finally arrived from Royal Mail on October 4, saying the redirection could not take place.

He is now using an overnight courier and picking up the mail himself once a week in London.

Source : Telegraph

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CWU Update - 17th September 2007

Negotiations have taken place between CWU and Royal Mail over the last five weeks, but ended on Sunday without agreement.

However, there has been progress in a number of areas, including pay. Although talks are set to continue the union is disappointed that Royal Mail has ended the agreed ‘period of calm’.

Royal Mail have announced that they will implement unagreed operational changes. The first of these will be a change to delivery start times from the 8th of October 2007.

As a result, despite being committed to further talks and being determined to reach an agreement, CWU will announce further strikes. The union's postal executive will meet on Monday 17th September to finalise their decision.

A summary of the latest rejected proposal is as follows.

SUMMARY OF REJECTED PROPOSAL

Pay
A number of options that amount to 6.7% on basic pay over two years with additional lump sums. This includes more money in the first year.

Flexibility
A range of proposals which amount to total flexibility where postal workers will not know what job they are performing from day to day.

Pensions
The company has virtually re-tabled the previous rejected proposal as revealed by the Daily Mirror, including a reduction in benefits, increased employee contributions and later retirement age.

No final agreement on a number of areas including job security, personnel procedures, automation, productivity and network changes.

Source : CWU Web Site

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Further Strike Action... - 12th September 2007

The Communication Workers Union (CWU) and Royal Mail remain at odds after extended negotiations failed to broker a deal, leading to more strikes planned for September.

According to Royal Mail, the CWU turned down a new offer in the latest round of talks, which would have increased the pivotal 2.5% pay offer to 3% through an employee "share of savings" scheme and included provisions for a 6.7% pay rise over two years.

It accused the CWU of continuing "to ignore the stark challenges facing the company and [refusing] to agree a way forward for the business".

The CWU said that the proposed deal included unacceptable terms for pensions and job expectations.

The failure to reach an agreement looks unlikely to derail Royal Mail's plans for modernisation. The breakdown marks the end of the "period of calm" during which these were put on hold.

Despite further talks scheduled for 20 to 22 September, the potential for further disruption to postal services remains as Royal Mail forges ahead.

"The union therefore can only presume that Royal Mail are set to implement unagreed operational changes," said the CWU in a statement.

"As a result, despite being committed to further talks and being determined to reach an agreement, CWU will announce further strikes to be held prior to the end of September."

The CWU was unavailable for comment.

Print Week

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Talks fail to reach an agreement - 12th September 2007

Royal Mail is extremely disappointed that, despite a four week “period of calm” to allow talks to take place, the Communication Workers Union continues to ignore the stark challenges facing the company and refuses to agree a way forward for the business. During these talks, Royal Mail offered the CWU both a short term resolution to the dispute within the amount available for pay this year and at no extra cost to the company, as well as a longer term solution which we believe is in the interests of all our people and the business.

Royal Mail has a unique opportunity in its history to invest in its service and improve its efficiency and competitiveness as a result of the £1.2 billion funding made available by its shareholder, the Government, through a commercial loan. It is time now to grasp this opportunity on behalf of our customers and our people - Royal Mail is already losing business because our costs and therefore our prices are too high and our business customers are choosing to go elsewhere. We will be announcing our next steps in due course.

Royal Mail would like to thank both the TUC and ACAS, who have been involved in the talks at various stages over the last four weeks, for their help. As ever, we remain available to talk to the CWU at any time.

Source : eGov Monitor

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Mail Theft Figures - 12th September 2007

Royal Mail has run into trouble over its use of private vehicles to deliver post after being forced to disclose, under the Freedom of Information Act, how many items are being stolen.

The move follows a request to the Office of the Information Commissioner after the postal operator was accused of withholding details of the extent of the problem. Royal Mail had claimed the disclosure could increase the likelihood of these vehicles becoming targets for criminals.

In his decision, Information Commissioner Richard Thomas considered whether releasing the statistics on thefts from private vehicles would prejudice the prevention or detection of crime or interfere in any Royal Mail investigation. He decided that it would not prejudice, or be likely to prejudice, the prevention or detection of crime.

The Information Commissioner considers that disclosure of the information would enhance the public’s understanding of the risks of delivering mail by this method and their ability to assess Royal Mail’s performance, ruling that it is in the public interest.

Royal Mail must now disclose the withheld information within 35 days but has the right to appeal against the decision.

Source : Precision Marketing


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End to Sunday Collections - 9th September 2007

Royal Mail could end Sunday collections from post boxes from next month.

The company said demand for collections on Sundays was "very low" while the handling costs were about four times higher than mail posted at other times of the week.

It is proposing that the last collections would take place on Sunday, October 21.

But it is one of several issues being discussed with the Communication Workers Union.

Brian Jeffries, area distribution officer for the Oxford branch of the CWU, said last night that, as far as the union was concerned, the end of Sunday collections was "not a done deal".

He said: "This is being discussed as part of the current national negotiations on pay and other issues.

"The business is saying Sunday collections are ending, but our position is that we need to discuss this and meet each other half way.

"It is our hope that in Oxford Sunday collections will be maintained, not only because of the effect it would have on earnings potential of workers, but also from the customer service point of view."

Royal Mail said no other aspects of its business would be affected and notices warning of the change would be placed on pillar boxes.

During consultation with post watchdogs Postcomm and Postwatch it said Sunday collections were not part of its "universal service obligation".

Source : Oxford Mail


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Targets Missed - 7th September 2007

Strike action and bad weather hit Royal Mail First Class delivery targets in much of eastern Scotland over the early summer, figures have shown.

The next day delivery target of 93% was missed in the Dundee, Edinburgh, Falkirk, Kirkcaldy, Perth and Borders postcode areas between March and June.

This followed unofficial strike action at the Edinburgh Mail Centre.

The Royal Mail said it hoped the areas could make up the difference to hit the full-year 2007/08 target of 93%.

MISSED FIRST CLASS MAIL TARGETS 2007/08 Q1
DD Dundee: 86.3%
EH Edinburgh: 91.2%
FK Falkirk: 90.3%
KY Kirkcaldy: 85.9%
PH Perth: 86.3%
TD Borders: 85.9%

The figures showed 20 of the 118 postcode areas across the UK failing to meet the target, eight of which were in Scotland.

Amongst the lowest performing were Lerwick, Kirkcaldy, the Borders, Dundee and Hebrides, although the Lerwick and Hebrides areas are exempt from the 93% target.

The report for the Royal Mail said the delivery rates in eastern Scotland were affected by unofficial strike action at the Edinburgh Mail Centre and Edinburgh Airport on 24 and 25 March.

It also said adverse weather had disrupted air network services into and out of Scotland.

Royal Mail Scottish affairs director Ian MacKay told BBC Radio's Scotland Live programme: "Unfortunately if the central pin of your mail centre goes out it makes it difficult for all those postcode areas

"Certainly what we will be looking to do in the longer-term is to continue to perform at the levels that we have done over the last two years, which are the best that we've had and we really apologise to customers that this local event has had this bad effect on their service."

However, Gary Langlands, chairman of the Dundee and Angus Chambers of Commerce, said the late arrival of post was a recurring problem for businesses.

He said: "The Royal Mail is going to lose out unless it pulls its socks up.

"What we've got to do is react to evidence, we've got to understand what's actually happening out there before we take it up with Royal Mail but we'd like to work with businesses and the Royal Mail in order to improve that service."

Source : BBC

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Print to Post Innovation - 5th September 2007

A new business post service has been launched that offers a faster, cheaper and more simple service by utilising a network of firms to print and insert the documents near the point of delivery.

ViaPost uses free software that integrates with most desktop applications to send customers' documents securely to a print site local to the recipient for production and inserting. The Royal Mail provides final-mile delivery.

The service will be rolled out next month. Nearer the launch, ViaPost will reveal the details of it print roster, which is made up of "the same printers, in essence, that work for the big banks", although it is still seeking partners for some locations via its partner Publicis Productif.

Source : Print Week

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Talks Extended - 5th September 2007

National talks between the CWU leadership and Royal Mail have been extended until Sunday.

Two weeks of rolling strike action was suspended for the talks, and many local strikes have also been postponed while the talks continue.

Royal Mail workers on the royalmailchat.co.uk forum expressed frustration at the deadline extension, suggesting that the CWU leadership may be preparing for a climb down.

Many postal workers are keen to resume strike action, seeing the 22 "strings" attached to the below inflation pay deal as the final nail in the coffin for both their conditions of work and the postal service as a whole. At the same time there is a concern that continued delay of industrial action will lead to a loss of momentum, or possibly require a re-ballot for further strikes.

Source : LibCom

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Talks En - 5th September 2007

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Non Exec Appointment to Royal Mail Board - 3rd September 2007

Royal Mail has announced that Stephen Carter, Chief Executive of Brunswick Group LLP, has been appointed as a Non Executive Director.

Stephen was Chief Executive of OFCOM between 2003 and 2007 and before that Managing Director of NTL Ltd, the cable, broadband and telecommunications business between 2000 and 2002.

Royal Mail Chairman Allan Leighton said: "I am delighted to welcome Stephen to Royal Mail. He brings a wealth of experience from the worlds of telecoms, marketing and regulation to the Board at a time when we are facing increasing competition from a range of other communications media as well as rival postal operators."

Stephen is also a Non Executive Director of Travis Perkins plc.

Source : eGove Monitor

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Bulk Mail Deregulation Possibility - 24th August 2007

Postcomm has suggested that Royal Mail's bulk mail services could be removed from its universal service obligations in a two-stage process.
The suggestion comes in the regulator's strategy review of the postal market beyond 2010, published yesterday. Postcomm is now seeking responses from the postal industry and postal users to its review.

The review document states: "Although we see merit in removing the remaining bulk mail services from the universal service in 2010 to afford Royal Mail fuller flexibility for larger customers, there are risks that need to be considered before this step is taken.

"To overcome these potential risks, a two-stage approach might be appropriate. As a first step, the uniform tariff constraint for bulk mail might be removed, thereby addressing the issue of pricing flexibility...Then consideration could be given to the services being taken out of the universal service at a later date."

The review also contains criticisms of Royal Mail, with which the regulator has had a fractious relationship since its inception, in particular it questions Royal Mail's response to the introduction of competition.

"Royal Mail's commercial strategy has not evolved to the extent necessary to enable it to address, and potentially benefit from, the challenges and opportunities of a changing market.

"There have been few changes in its product portfolio since 2003...Many of the other large international operators have been far more proactive in addressing the threats and opportunities, especially in the growing fulfilment and unaddressed markets."

Source : Precision Marketing


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TNT Post nets NHS Contracts - 24th August 2007

The biggest postal deal in Wales since deregulation of the postal service has been announced, after TNT Post won a contract to handle mail for two NHS trusts.

The deal will see TNT Post work with Cardiff and Vale NHS Trust and Gwent Healthcare NHS Trusts.

They will pass an estimated 12,000 mail items daily to TNT Post in South Wales.

TNT Post is looking to handle more than 100,000 items of post across the public sector each day by the end of the first year.

It says this will result in savings of an estimated £1m.

Nick Wells, chief executive for TNT Post in the UK, said, “We are extremely pleased that TNT Post will now be a key postal partner to the public sector in Wales.

“TNT Post is used to cutting the cost of post for its customers and it’s great to see that we are now helping public services such as the Welsh NHS to be a direct beneficiary of these savings.

“Growing our customer base in this region is a key interest for us and by working in partnership with Value Wales, we look forward to seeing more Welsh public sector bodies come on board and reap the benefits of excellent customer service, innovation and value for money that we can offer.”

TNT Post in South Wales and the South-West of England has secured a number of significant customer wins during the first six months of trading, with more than 50 customers in the area.

Source : ic Wales

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Postcomm Pressure on Royal Mail - 23rd August 2007

With no announcement of a resolution to the bitter dispute between Royal Mail and the CWU, pressure on Royal Mail continues as Postcomm calls on Royal Mail to raise its game and cut costs. If it can do that, Postcomm says it can scale back regulatory control.

All of this gives Royal Mail little or no room to manouver and it seems likely that the CWU will be faced with trying to tackle the government head-on or accept job losses and productivity initiatives. To be fair, Royal Mail has said this all along but the CWU, ever protective of its members and with a far more left-wing view of postal services than the present government, there is a deathly silence.

The recent shift to ongoing talks between the CWU and Royal Mail being held in private seemed wise given the often unproductive speculation in the press, but the CWU either has to to use the time productively and absorb the full picture on postal liberalisation to make for a speedy resolution or it will inevitably end up in a full scale battle with the government. The CWU has on the one hand welcomed change but has made it clear that they do not support Royal Mail's present leadership/direction and has even called for a halt or reversal to deregulation.

I too have little confidence in the deregulation concept - certainly in terms of maintaining a quality service. It was thrust upon the electorate with only cursory consultation periods in the wake of the intial decision - all a little too late. That said, reversing it would cost more than going forward now, and despite the protestations of postal workers, the chieftan tank appoach to clearing the garden seems to be winning out.

Postcomm wants Royal Mail to promote the strengths of mail versus other communications media, something that the CWU says Royal Mail has failed to do, but to be honest I'm at a loss to see what can be done to fight back against a world of high tech media communications. Online stamps, personalised stamps, new tracking services have all been introduced but Royal Mail is stuck between a rock and a hard place while restrictions are in place to allow competitors to snap at Royal Mail's heels. I mean, just how many ways are there to send a letter?

Postcomm claims that customers are benefitting from competition.

Which customers exactly? The present regime has merely brought domestic mail to a bare-essentials service, and only held there by targets set by Postcomm. The only customers actually benefitting from all this change are business customers. Mail is being delivered later, less frequently and we still have an unresolved postal dispute on our hands. With mail still largely untracked, there is no guarantee that a letter will arrive and if it doesn't, there is virtually no way of finding out what happened to it either.

Even with an undelivered email, it will often bounce back as 'undelivered' - its a tall order to compete with that.

Source : Hellmail

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Postcomm warning to Royal Mail - 23rd August 2007

Royal Mail should be split in two if it fails to modernise its business and cut costs, the industry regulator warns on Thursday.

Nigel Stapleton, Postcomm chairman, told the Financial Times the priority was for Royal Mail drastically to improve its efficiency. One option would be to separate its sorting operations from doorstep deliveries.

“We will press for more radical ways for cost reduction should the current process not work,” he said.

In a report on the long-term future of the mail services market, Postcomm raises the prospect of requiring the postal services operator to contract out parts of its collection and sorting operations to safeguard universal delivery.

It is the first indication of how the postal market might be regulated beyond 2010, when the current framework of price controls runs out. Postcomm said it saw the merit in a partial relaxation of the universal service obligation, the duty on Royal Mail to deliver post to every address in the country at a standard price.

The regulator wants to open up a public debate about the future of this obligation. With its two classes of stamp and six-day-a-week deliveries to every front door, it is more demanding than other European countries.

Postcomm says it will not make specific proposals until next year. But it rejects Royal Mail's argument that the obligation is unaffordable and should be limited only to stamped mail.

Removing the one-price-anywhere rule for franked mail and pre-paid postage would harm small businesses, particularly in rural areas, it says.

As a limited concession, Postcomm is prepared to remove bulk business mail from the obligation, allowing Royal Mail to vary prices from 2010 and cut six-day deliveries at a later date.

In its report, Postcomm mounts a strong defence for competition, saying it will help to spur innovation and cut costs and prices, thereby expanding the market.

It disputes the argument by Royal Mail and the unions that the service obligation is unaffordable, pointing out that operations covered by the obligation made a profit last year.

In effect, Postcomm calls the company’s bluff, saying if it thinks the obligation is unaffordable with 1 per cent competition, other options for providing that service should be considered. This could include contracting out or franchising parts of its upstream services.

Royal Mail said it would study the document before responding.

Source : Financial Times

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Postcomm's Strategic Review - 23rd August 2007

Royal Mail is pressing the industry regulator, Postcomm, to make radical changes to the universal service obligation, under which it must deliver mail to all the UK's 27 million addresses for the same price. It wants business post taken out of the deal to allow it to charge less for franked mail.

Postcomm is conducting a wide-ranging strategic review of postal services as competitors battle Royal Mail for a share of the market and all mail providers face a growing challenge from new communications media such as email. The review covers competition, innovation, regulation, governance and the structure of the universal service.

Royal Mail's proposals are revealed today in Postcomm's interim report on the review. The regulator, which has allowed changes to the universal service in the past, gives a cautious response to the plans. It acknowledges that removing business mail from the deal would help Royal Mail to be more commercially flexible. But it notes: "We believe that to manage some potential risks, a phased approach might be an attractive way forward."

One concern is that Royal Mail's proposals could harm small businesses unable to take advantage of competition in the bulk mail market. "We need to ensure the service remains aligned with changing customer needs and the economic costs of providing it," Postcomm says. "The basic right to post a stamped letter anywhere in the UK for the same price will remain at the centre of the universal service."

Royal Mail sources have privately expressed concern about the financing of the universal service, which made a profit of £27m in 2006/07. It is also concerned that if another operator were to offer end-to-end services, providing its own delivery system rather than relying on Royal Mail postal workers to cover the "last mile", it could lead to the service being "hollowed out" - with competitors battling for deliveries in urban areas, leaving Royal Mail with responsibility for the more costly rural collection and delivery. TNT, the Dutch group, is considering an end-to-end UK service and expects to decide within the next 12 months.

Postcomm said it believed a strong internally financed universal service was compatible with competition but Royal Mail needed to become more efficient and customers would have to accept the need for "a fair price" for postal services.

"We do not consider external financing is needed," the report said. "This could potentially lead to serious distortions and perverse incentives on Royal Mail's efficiency."

The letters market has been fully liberalised since the beginning of last year and Postcomm believes it has benefited from competition. One in five items is collected by an operator other than Royal Mail, though the state-owned service dominates delivery.

The report praises Royal Mail's improvement in meeting performance targets. Complaints are down and public trust is up, according to Postcomm, and postal prices are "fairly inexpensive".

But it says efficiency has not translated into lower prices, that modernisation is well behind schedule and Royal Mail has fought the competition on price rather than innovation. "Although some progress has been made, Royal Mail is still a long way from achieving its own vision of becoming a modern and efficient operator."

Postcomm argues that the mail has a number of advantages over electronic communications and an innovative approach could see the market grow. "There is no reason why we should resign ourselves to the prospect of a contracting mail market if operators focus on how their products can add value for mail users."

Postcomm says it also wants to consider "alternative ownership and governance", drawing on the experience of approaches in some government-owned and non-privatised regulatory sectors.

But sources at the regulator indicated it was not re-opening the debate about privatisation of Royal Mail, which it did not regard as an issue it should be involved with.

Source : GuardianUnlimited

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Increase in Magazine Publications - 20th August 2007

The Audit Bureau of Circulations (ABC) has released magazine figures for the first half of 2007, showing no end to the appetite for customer titles.

Offerings from entertainment companies, such as Sky, supermarkets, such as Asda, and even from the likes of Debenhams and Ikea continued to shift in massive quantities.

Sky capitalised on this success by bringing out editions targeted at children, sports and movies. The latter two accounted for more circulation than the original Sky magazine's 7m.

This was echoed across the sector, with satellite and cable listings publications increasing 59% to more than 11m copies year-on-year.

Royal Mail welcomed the news, as around two-thirds of these magazines are posted direct to customers rather than being picked up in store.

Royal Mail head of publishing Emily Travis said: "Hardly a week has passed without news of a customer magazine launch, painting a picture of a vibrant sector.

"Big brands, such as Sony, Bang & Olufsen, Fortnum & Mason, Superdrug, Virgin Media, Shell and Royal Bank of Scotland, to name but a few, have all committed significant budget towards producing a customer title."

"The continued success of the industry clearly demonstrates the continuing trend among marketers for more targeted, one-to-one communication," added Travis.

Source : PrintWeek

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TNT Post nets EMAP Business - 20th August 2007

Emap has handed TNT Post its £1.6m subscriptions contract, which will see the postal operator handle up to six million items of mail over a 12 month period.

The deal marks TNT Post’s first major contract in the publishing sector.

The magazine publisher will use TNT Post’s Premier service, a two-day sorting service with Royal Mail taking on ‘final mile’ delivery.

The contract was awarded following a successful eight-week trial period.

Ian Phillips, group circulation manager at Emap, says: “Subscription copies amount for a significant proportion of our copy sales so our postal partner is an integral part of the service we offer our subscribers.

“It is for this reason that TNT Post’s price and service will deliver significant benefits for Emap and its customers.”

The postal operator also handles contracts from customers including BT, Centrica, Lloyds TSB, HBOS and Barclays.

Source : Precision Marketing

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Cost of the Strike - 20th August 2007

Royal Mail could face a £350million fine after the recent strikes left services in turmoil.

The warning came as some workers voted for fresh action in a pay and modernisation row and simmering disputes threatened to spark wildcat walkouts.

A memo to managers says the strikes "cost us dearly. Our quality of service has been ruined.

"We will miss all targets this year and could be fined up to £350million unless we can convince Postcomm not to apply it.

"Our relationship with customers is damaged and many are moving away altogether." The Communication Workers' Union staged two 24-hour national strikes.

It suspended more action for fresh talks. But up to 5,000 posties in South London have voted to strike on August 24 and 28.

Staff at offices including Streatham and Watford will be balloted after pay was docked. Royal Mail refused to comment.

Source : The Mirror

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Lost Mail - 20th August 2007

Royal Mail is paying out more than £1million a month in compensation for its failures - including settling vast numbers of claims for lost and damaged items.

More than 800 claims a day are paid out for letters and packages that have been lost. There are another 80 a day for damaged parcels and 150 per day over delayed items.

The £13.6million annual bill to settle claims represents the tip of the iceberg of Royal Mail failings because the company has become notorious for refusing to pay up over complaints.

It received complaints and compensation claims for 651,582 lost items in the 2006-07 financial year, yet paid out on only 311,005.

The Federation of Small Business claims the decline in services has reached crisis point and is damaging the economy.

But customers' belief that standards are dropping as post charges rise have had no impact on the £1million-plus income of Royal Mail chief executive Adam Crozier, the former Football Association boss who is one of the highest paid public servants.

The price of a first class stamp went up by 2p in April to 32p. It will go up to 34p next April, while further rises to 37p are in the pipeline. Similarly, second class stamps went up 2p in April to 23p and will rise to 24p in April. By April 2009 the cost will be 29p.

Royal Mail's reorganisation and automation plans, which will cost 40,000 jobs, will also include delaying the daily post to 60 per cent of homes and businesses until after midday, the Daily Mail revealed last week.

The proposals, which have angered consumers, will also mean postmen not delivering any normal mail before 10.30am.

Royal Mail's £13,623,473 compensation bill for 2006-07 is likely to rocket in the current financial year because of industrial action by the Communication Workers Union, according to reports to the federation.

Its spokesman Matthew Knowles said: "Small firms are getting increasingly annoyed. The Royal Mail provides a vital service for small firms who cannot access other mail providers. But that service is getting steadily worse, despite the price of stamps being on the increase.

"The delays in mail arriving and items being lost can have a severe effect on cash flow, in some cases it can be terminal to a business - costing jobs.

"The Royal Mail has to raise its game, but if it can't then the regulator Post-Comm will have to make it improve. People's livelihoods depend on it."

The consumer body, Postwatch, has in the past accused Royal Mail of "cheating" customers by failing to pay proper compensation when items are stolen.

It was particularly worried that compensation was being refused even when customers paid more to send items "special delivery", which is supposed to guarantee a secure service.

It emerged in June that Royal Mail auctions up to 75,000 items a year that have been lost in the post and not reunited with their owners.

Lost items cause more complaints than any other issue dealt with by Postwatch. Another major problem is damaged parcels.

A Postwatch spokesman said: "Royal Mail will often try to blame the customer by saying a parcel was not properly packed.

"We believe that it is up to post office staff to make a decision whether something needs to be repacked when the customer first hands it over the counter. Once they take it, then they are responsible for delivering it safely."

For lost items, Royal Mail customers can claim compensation up to 100 times the cost of a first class stamp or the market value, whichever is lower. Compensation for damaged goods is awarded at the same rate, but not for glass or ceramics.

Royal Mail confirmed that it sells off around 15 per cent of items lost in the post. A spokesman said: "Each year 500,000 parcels are undeliverable because they are either incorrectly addressed or have no address or the intended recipient has moved. We do all we can to reunite them with their owners at a cost of £10million a year."

The company said that complaints and compensation claims fell in 2006-07 and were around 200,000 fewer than the year before.

Royal Mail, which employs 195,000 staff, handled almost 21billion letters and parcels last year. A spokesman for industry regulator Postcomm said: "In real terms, comparing the volume of mail they carry, the number of items lost and damaged is very small."

Source : Thisislondon.co.uk


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Royal Mail Losses - 15th August 2007

Royal Mail made an annual operating loss of £12m on its deliveries of first and second class and bulk business mail, according to results published on Wednesday.

The results of its price-regulated business, which made a profit of £197m in the previous year, underline the challenges facing the company as it seeks to cut costs and modernise its processes.

Royal Mail’s operating costs were up £181m at £5.97bn despite shedding 6,300 jobs.

Royal Mail is likely to use the figures, which were submitted to Postcomm, the regulator, to press home its demand for an easing of price controls.

The company said the figures suggested it “is unable to recover fully its allowed revenue within a competitive market”.

The results help to explain why Postcomm proposed last week that Royal Mail be allowed to increase the price of a second class stamp from 24p to 29p by 2010 to help what the regulator called its “deteriorating financial position”.

The downturn in its figures will also strengthen its hand as it talks to the postal unions about pay and thousands of potential job cuts.

Royal Mail argued that it was suffering from a shrinking market, intensifying competition and customers seeking cheaper products that had not been anticipated by the regulator when its set its last price regime only 18 months ago.

The postal operator’s regulatory accounts illustrate the rapidly changing nature of the mail delivery business since competition for bulk business mail was introduced last year.

Its first-class and second-class mail delivery shrank by 7.9 per cent and 5.6 per cent respectively last year. Meanwhile its doorstep deliveries on behalf of other bulk mail operators doubled in a fully competitive business mail market to over 2.4bn items.

However, Royal Mail continues to make an operating loss on this so-called “downstream access” part of its business.

Source : Financial Times

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Talks to 4th September - 12th August 2007

We are pleased to confirm that the current industrial action has been suspended. At a meeting last Thursday between Royal Mail and the Communications Workers Union, it was agreed:

• That both parties commit to talks on all the issues between them, hosted and facilitated by the TUC and supported by ACAS. Both sides commit to reach an agreement by 4 September

• That during this period the talks are on a confidential basis with no media or internal briefings unless explicitly jointly agreed. The CWU Executive and Royal Mail Board will receive regular updates on progress and would also be expected to undertake this confidentiality clause

• That for that period, Royal Mail will not serve notice or take any unilateral action to impose changes by executive action

• That for the same period CWU will suspend industrial action


Source : Royal Mail email

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Stamp Price Increase - 10th August 2007

The price of second-class stamps will increase by 21 per cent over three years to 29p as Royal Mail struggles with loss-making parts of its business. Postcomm, the industry regulator, approved the increase but said that Royal Mail needed to reduce costs. An application to increase the price of first-class stamps was rejected.

Source : Timesonline

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Royal Mail Response to Postcomm - 9th August 2007

Commenting on Postcomm’s proposals on a review of Royal Mail’s price control, Royal Mail’s Marketing Director, Alex Batchelor, said:

“Royal Mail knows that if we are to succeed in a very tough and open market we urgently need to modernise and become more efficient. Royal Mail is losing business to rivals whose costs and prices are lower than ours because they have the modern technology Royal Mail urgently needs to install. We have already made progress and have shown we can deliver the great quality of service our customers expect. What we must do is to move forward at pace to use the £1.2 billion loan which the shareholder – the Government – has made available to modernise the letters operation with new technology to give it world-class productivity. That’s the focus for Royal Mail.

“Our costs are too high and the simple fact is that our prices are being undercut by rival postal operators and that’s resulting in one letter in every five this current financial year being handled by rivals.

“We know that the UK mail market is declining by 2.5% a year – after decades of growth – and the competition from postal operators as well as other forms of communication, such as broadband internet, is growing rapidly. Royal Mail has long argued for lighter-touch regulation and a level playing field on which to compete with large rivals – and we’ll continue to press Postcomm on these issues."

Mr Batchelor added: “We absolutely reject suggestions from Postcomm that we have not capitalised on growth opportunities in the postal market. Despite intense competition, Royal Mail is delivering around 60% of all items bought online and we continue to develop new products and services to support this sector.”

Royal Mail is studying the Postcomm proposals carefully and will respond formally in due course.

Source : eGov Monitor

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Strike Action Called Off - 9th August 2007

British postal workers called off a strike against Royal Mail Group Plc, Britain's state-owned mail service, so talks with management can take place aimed at preventing further industrial action.

Workers were due to walk off the job in a dispute over pay and cost cuts at 7:00 p.m. today. After a meeting it was decided ``detailed discussions'' by the company and the Communication Workers' Union will take place until Sept. 4 in an attempt to reach a long-term agreement, the two sides said in a statement posted on the union's Web site.

The talks will be on a confidential basis with no external or media briefings provided, they said in the statement. During this period the company has agreed that ``no unilateral action'' on pay or costs will be imposed, according to the statement. Industrial action by the labor union is suspended to allow negotiations.

Royal Mail Group reduced residential mail service and cut labor costs after last year's introduction of competition in Britain's postal market. The union says the company is aiming to cut jobs, slash pay and is refusing to negotiate.

Source : Bloomberg

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Possible end to Strike Action... - 9th August 2007

Creative Mail Solutions has been informed that the CWU may be ready to suspend national strike action in an attempt to re-enter talks with Royal Mail management. Our sources believe strike action may well be averted as early as tomorrow...

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Strike Action Hurting the Customer - 6th August 2007

A POSTAL watchdog has claimed strike action is “hurting customers” and called for an urgent resolution.

Postwatch East of England spoke out today after the Communication Workers Union (CWU) announced further industrial action up to August 17.

It warned that customers who could not use alternatives to mail were being inconvenienced while some businesses were starting to use other forms of communication - and more would do so if strikes persisted.

Postal customers - and the postal industry - had suffered from industrial action since June 29, with mail delayed despite post boxes and, for the most part, post offices still being open, the watchdog said.

Dr Charles Winstanley, chair of Postwatch East of England, said: “We have now had several weeks of postal strikes, and the damaging effects are becoming clearer by the day.

“The longer the dispute continues, the worse the cumulative effects will be for customers and the postal industry.

“Confidence in the postal service will fall. We are already seeing evidence of this as customers who can use alternatives to the postal service are doing so. Those who cannot are experiencing delays and uncertainty.

“The bottom line is that there are no winners in this dispute. Customers become ex-customers or reluctant mailers. An end is needed urgently, for the sake of both customers and the UK postal service.”

Last week, CWU's postal executive agreed a further round of strike action up to August 17.

A CWU spokesperson said the fresh wave of strikes was set against the background of Royal Mail confirming the first stage of a modernisation plan, which it said would be “imposed” on a large section of the workforce on August 13.

The union claimed it would involve significant changes - including later delivery start times and permanent reductions in customer services - adding that it represented an “unnecessary attack on postal workers' jobs, pay and conditions”.

CWU Deputy General Secretary Dave Ward said: “Despite Royal Mail's stated position and with the prospect of imposed change, the union has made a fresh offer for a period of calm.”

He added: “All Royal Mail have to do is take a step back and engage in meaningful negotiations.”

But a spokesman for Royal Mail said today: “We deplore the move by the union to attempt to cause further disruption to customers' mail. As the CWU is responsible for calling the strikes, they are clearly free to stop this damaging action at any time. Royal Mail urges them to do so, in the interests of our customers, our people, and the future of the business.”

Source : EADT

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CWU Annouce further Strike Action - 2nd August 2007

Exploratory talks facilitated by ACAS have taken place this week between The Communication Workers Union and Royal Mail. Further talks are planned to take place at ACAS later today.

The Union‘s Postal Executive has agreed a further round of strike action. A full programme of the next planned action is shown in the Mail Network Disruption page of the Creative Mail Solutions web site.

The fresh wave of strikes is set against the background of Royal Mail confirming the first stage of their so called modernisation plan that will be imposed on a large section of the workforce on the 13th August. This will involve significant changes including later delivery start times and permanent reductions in customer services. The imposition represents an unnecessary attack on postal workers’ jobs, pay and conditions.

CWU Deputy General Secretary Dave Ward said “Despite Royal Mail’s stated position and with the prospect of imposed change, the Union has made a fresh offer for a period of calm. We have made yet another offer to Allan Leighton and Adam Crozier to call off the next planned strikes. All Royal Mail have to do is take a step back and engage in meaningful negotiations.”

Source : CWU Web Site


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DM's Opinion on Strike - 2nd August 2007

Mention the words ‘post office closures’ to most members of the public and you are likely to be on the receiving end of an impassioned tongue-lashing about the state of the nation. Given the strength of public feeling towards the country’s beloved posties, it is somewhat surprising then that the current industrial action against Royal Mail – sparked by the threat of redundancies and post office closures – appears to have completely bypassed the national psyche.

One month in, and, if Paddy Power offered odds on it failing, most people would be tempted to have a flutter.

So, where has it all gone wrong for the Communication Workers Union?

First, one-day strikes were never going to have much of an impact, a fact CWU bosses seemed to have conceded by resorting the ‘roll-over’ strategy.

Second, whether they like it or not, the postal service has to modernise to compete in today’s market.

Third, and crucially, the fact is that Royal Mail chief Allan Leighton has won the argument in the corridors of power. The Government has been virtually silent; so too the opposition parties, Postcomm and Postwatch. Even the private operators which, by ‘final mile’ default are among of Royal Mail’s biggest customers, have not kicked up a fuss.

Our industry trade bodies – the DMA (UK), ISBA, IPA, the Advertising Association – have been equally taciturn.

It’s been said before, but it’s worth repeating, despite the rise of digital techniques, the direct marketing industry needs a strong postal service, nimble enough to compete against other media.

The country’s posties are often this industry’s frontline troops and no sector can thrive with a demoralised workforce. Isn’t it time that all the stakeholders got round the table and thrashed out a deal that will result in a strong and prosperous Royal Mail?

Charlie McKelvey, editor, Precision Marketing

Source : PM Briefing


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TNT Vision for E2E Services - 30th July 2007

TNT, the Dutch postal operator, will decide within the next 12 months on launching an end-to-end postal network to rival Royal Mail in the UK.

Chief executive Peter Bakker said his group believed the UK postal market would not get sustainable competition until private sector rivals ran their own delivery networks, rather than relying on Royal Mail for "final mile" delivery.

"Only if competitors like ourselves have their own networks will we get real competition," Mr Bakker said today.

Under current arrangements private sector rivals collect and sort mail from big customers but then hand it over the Royal Mail to make the actual deliveries under a series of access agreements. Less than one percent of UK mail is delivered without Royal Mail involvement, though about 10% is handled under access agreements between Royal Mail and competitors like TNT.

TNT has been looking at how to provide end-to-end services for some time, including trials in Manchester and Glasgow but has yet to make a decision on rolling out a national network.

"We expect a decision by TNT over the next 12 months on setting up this activity," Mr Bakker said today.

Mr Bakker said his company's plans would not involve setting up post boxes across the UK but would be pitched towards big business customers which sent out bulk mail. But it would mean TNT recruiting its own delivery personnel. "If TNT is going to set up an end-to-end network you will see people wearing orange uniforms delivering mail."

Mr Bakker said the current strike by members of the Communications Workers Union over pay and working practices had underlined the extent to which other mail companies depended on Royal Mail.

"We all rely on Royal Mail. If that network is ill or on strike we are ill as well. That's not competition."

Mr Bakker acknowledges that it will be difficult to build a competitive end-to-end network, given the current access price - the amount Royal Mail gets for delivering its rivals' letters - remains at 13p a letter.

"Royal Mail is complaining that those who get access pay too little money. We are saying the same. If network access is continued to be offered at such a low price it very hard for someone else to build a network that can compete."

Today TNT reported second-quarter operating profit fell 2.1% against a second quarter in 2006 where results were boosted by a series of one-off factors.

"If you look at profit from continuing operations we had a good quarter," Mr Bakker said.

TNT is also planning to spend up to €500m (£340m) buying back its own shares.

Source : Guardian Unlimited



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TNT Post's UK Expansion - 30th July 2007

TNT, the Dutch mail group, is planning a further aggressive expansion in the UK and elsewhere in Europe in a new drive to offset its declining postal business at home, it said today.

Executives said in Amsterdam that the company was raising its forecast for volume growth in its European mail networks (EMN) division - mainly Britain and Germany - to between 30 and 35% this year from 25% and its operating margin to 17.5% from 17%. Volume growth was 37% in the second quarter.

TNT, which has capitalised on the running series of strikes by postal workers at Royal Mail, said organic growth in EMN was up 21.3% in the first half, driven overwhelmingly by its UK business. It has started up a new parcels business in Britain. But mail volumes in Holland declined by 3.5% in the second quarter.

The former Dutch monopoly, one of Royal Mail's biggest new rivals, has already indicated that it plans to develop a full-scale network in Britain rather than use that of its UK rival to deliver mail. Peter Bakker, chief executive, said today the group's new strategy would be disclosed in December.

Giving an upbeat outlook for the full year, Mr Bakker said operating income fell 2% in the second quarter to €330m (£223m) because of one-off costs but half-year sales were up 9.6% at €5.4bn and profits up 2.6% at €681m. TNT is raising the interim dividend by 15% to €0.30 and initiating a further €500m share buy-back.

"This not because we don't know what to do with our money," Henk van Dalen, chief financial officer, told reporters. "We will have higher revenue growth but we need more investment to develop those higher sales and generate more solid organic growth." The planned investment drive, particularly in the UK, could depress overall mail margins.

Mr Bakker made plain that TNT is worried by the delayed date - 2011 rather than 2009 - for the introduction of full-scale liberalisation of EU postal markets and the impact of this in Germany which is due to bring in full competition for Deutsche Post next year. Britain's market has been open to competition since 2006 and TNT is active in eight of the 27 domestic European markets.

Source : Guardian Unlimited



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CWU Response to RM Statement - 30th July 2007

The statement by Royal Mail is deliberately misleading.

80 per cent of postal workers quoted by Royal Mail to be working were due to be in work. The outstanding 20 per cent employed in mail centres were taking part in strike action.

The twelve mail centres named in Royal Mail statement are large mail centres which have onsite delivery offices therefore for maximum impact they are due to begin strike action on Friday.

Royal Mail’s statement is an addition to a long line of public statements filled with misconstrued information. It proves how far Royal Mail are prepared to go to mislead their employees and the public.

98 per cent of postal workers in mail centres due to take part – did so.

Strike action continues to be strongly supported.

Source : CWU

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Royal Mail Strike Statement - 30th July 2007

Royal Mail said today that payroll figures show that 80 per cent of our people are working as normal. Collections and deliveries are taking place as usual throughout the UK.

12 mail centres - the large sites where mail is processed before being sent to delivery offices - are working normally throughout today, including sites in Belfast, Southend, Liverpool, Carlisle, Peterborough, Glasgow, Hull, Aberdeen, Gloucester, Portsmouth, Crewe and Gatwick. Large numbers of colleagues have also reported to work at the remaining 59 centres and are working alongside management volunteers. No mail centres are expected to be closed.

The action this week is not on a national basis but involves strikes at different Royal Mail sites at different times.

A spokesman for Royal Mail said:" We are grateful to everyone who has chosen to work as normal and to get the mail to our customers as quickly as possible in spite of the Communication Workers Union call for industrial action."

The union’s publicly stated aim of causing maximum damage to Royal Mail, and therefore its customers, is completely at odds with its claim to support the postal service. Strike action will inevitably drive customers away from Royal Mail to rival operators and to the internet.

Royal Mail is already losing business because its costs and therefore its prices are too high and our business customers are choosing to go elsewhere. The facts remain the same:

• The mail market in the UK is declining by 2.5% per year
• Royal Mail has lost 40% of bulk business mail to rival postal operators
• Overall this year, rivals will handle one in five of all letters posted in the UK
• Our rivals are 40% more efficient not because their people work harder but because they have already modernised - as we must now do - and have much more technology
• Our rivals pay their people 25% less than we do at Royal Mail

Royal Mail remains ready to meet the union leadership yet again at any time to explain our position and the tough reality of the completely open marketplace in which we now operate.

Source : Royal Mail

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EC Threat Over VAT - 25th July 2007

Royal Mail, reeling from a series of strikes by postal workers over pay and working practices, suffered a fresh blow on Tuesday when the European commission stepped up its threat to take the government to court over its decision to exempt all the former monopoly operator's services from VAT.

Laszlo Kovacs, EU tax and customs commissioner, formally requested the government to amend UK legislation allowing Royal Mail to charge zero VAT on high-value bulk mail and commercial deliveries for which rivals must pay the standard rate of 17.5%.

The zero rate applied to stamps for normal deliveries to more than 20m British homes under the "universal service obligation" (USO) — guaranteeing one delivery a day, six days a week, to every address in the UK for the same price — would be unaffected.

The commission's move is the second stage in the infringement procedure and could lead it to take Britain to the European court of justice, Europe's highest court. UK laws on exemption for all Royal Mail's services are deemed incompatible with the sixth VAT directive.

Mr Kovacs said the exemption should be "applied in a way that minimises distortions of competition between former monopolies and market entrants to ensure that all operators enjoy the freedom to provide postal services across Europe."

The government showed little sign of giving way to Brussels on the issue. "We are satisfied that our position is consistent with the EU VAT rules in this area, which require VAT exemption for services provided by the 'public postal services'," a Treasury spokesman said.

Royal Mail said it remained opposed to the imposition of VAT on its postal charges. "While the issue of VAT is a matter for the UK government, we have said that an increase in prices as a result of the imposition of VAT is the last thing we want for any of our customers, particularly charities and small businesses."

A spokesperson for TNT Post, one of Royal Mail's rivals, said: "This action supports our view that the VAT distortion needs to be removed."

Mr Kovacs's latest move comes in advance of measures to enforce full-scale liberalisation of the EU postal market by 2011 at the latest. The commission, which is also taking action against Germany and Sweden, argues that in competitive postal markets — fully open in Britain since 2006 — different tax liabilities distort competition and "can only be justified as regards the strict discharge of the USO".

Source : Guardian Unlimited

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Postcomm's Zonal Response - 23rd July 2007

Postcomm, the independent regulator for postal services, has announced that it is proposing to reject Royal Mail’s application to charge large mailers – using products which are not part of the universal service – different prices depending on where in the UK their mail is delivered (Royal Mail calls this zonal pricing).

Postcomm will issue a consultation document in August that will set out in detail why it is proposing to reject Royal Mail’s application. However, in the interests of reducing market uncertainty, the regulator is making this announcement today.

Nigel Stapleton, Postcomm chairman, said:
“We are proposing to reject Royal Mail’s application mainly because it has put forward a pricing structure that appears to have a number of discriminatory features and would have been introduced in a way that would lead to unreasonable changes for customers.

“This does not mean that we are ruling out any future moves towards more cost-reflective pricing, including zonal structures for non-universal service products, if Royal Mail can design an application that meets the requirements of its licence and our statutory duties.

“Although any decision must be based on these tests, we note that Royal Mail’s application has also proved highly unpopular with its customers – both senders of mail and recipients in rural areas. We hope that, following the publication of the consultation document in August, Royal Mail will engage constructively with its customers to see whether their concerns can be addressed.”

Source : Postcomm


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Two Weeks of Disruption - 18th July 2007

The Communication Workers’ Union has announced an escalation of the level of strike action in Royal Mail. Although postal workers will individually take 2 days of strike action in the next two weeks, the strikes announced mean that there will be two weeks of continuous disruption to mail services. The strikes call out separate functions nationally on different days and the timing is aimed at maximising the impact on mail.

The clear escalation of the strike has been called because Royal Mail have made it clear they are unwilling to engage in any meaningful negotiations

“We have contacted Royal Mail leaders on copious occasions, consistently asking for negotiations to find a resolution to the dispute. Royal Mail management continue to ignore the union and its’ workforce. This is absolutely unacceptable”, said Dave Ward, CWU Deputy General Secretary.

General Secretary Billy Hayes added “stepping up strike action is the inevitable response to an employer that refuses to take the strike seriously. Again, we are calling on Royal Mail’s business leaders to enter fresh and meaningful negotiations aimed at settling the dispute. The fact that they continue to refuse to do so is a failure to their workforce and the public”.

In addition to strike action, the CWU are stepping up their campaign to make pressure groups and the public aware that postal workers are taking this action in an attempt to defend and protect postal services.

Source : CWU

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Strike Escalation - 17th July 2007

The Communication Workers’ Union Postal Executive have met this afternoon and have taken the decision to escalate the level of strike action due to the lack of progressive discussions with Royal Mail.

As Royal Mail have made it clear they are unwilling to engage in meaningful negotiations, the postal executive will meet this evening and tomorrow morning to plan a programme of strike action.

The dates announced tomorrow will be strategically selected in order to maximise disruption to all Royal Mail services.

Source : CWU Web Site

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Royal Mail's Position on Strike - 17th July 2007

Royal Mail said today support for the Communication Workers Union strike had slipped and remained extremely patchy with the percentage of people coming to work ranging from 5% to more than 60% around the country. Royal Mail added that the network of 14,220 Post Offices was operating as normal.

The company said that, as ever, it is willing to meet the union at any time. Royal Mail met Dave Ward and Billy Hayes on Wednesday evening to explain again the company’s urgent need to change, as all its major rivals in the UK postal services market have already done, if it is to thrive in an increasingly tough marketplace. Chairman Allan Leighton and Chief Executive Adam Crozier set out the very serious competitive threat facing the company and its people but the union nevertheless decided to go ahead with a second damaging 24-hour strike which started at 7pm last night.

Mr Leighton said: "Yet again the union has refused to grasp or understand the harsh commercial reality of the market in which Royal Mail now operates and the consequences for all of us if we don’t modernise - and do it quickly. Their decision to call another strike changes nothing and achieves nothing other than to damage the business and our customers and drive more of them towards the internet or to rival operators."

The facts remain:

• The mail market in the UK is declining by 2.5% per year
• Royal Mail has already lost 40% of bulk business mail to rival postal operators
• Overall this year, rivals will handle one in five of all letters posted in the UK
• Our rivals are 40% more efficient not because their people work harder but because they have already modernised and have much more technology
• Our rivals pay their people 25% less than we do at Royal Mail


Royal Mail has offered a package of pay which gives a basic pay rise of 2.5% for change as well as an £800 dividend if we hit our targets - plus the opportunity to earn a 50:50 share of any savings over and above budget.

Mr Leighton added: "This pay offer is fair and it’s what Royal Mail can afford. Hurting the business and its customers with repeated strikes will only make it more difficult to afford."

"What we are focussing on is the long term business plan agreed with our shareholder - the Government - in which £1.2 billion pounds of public funds are being invested to secure a future for this company and its people, and enable it to continue to provide great quality of service for its customers for years to come."

Mr Leighton called on the CWU to accept the absolute need to modernise and take off their block on local change in 250 operational units where changes have been agreed with our people and the union locally but blocked by the CWU at a national level.

Royal Mail remains very willing to meet the union at any time to explain the company’s position.

Source : Royal Mail

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TNT Planning E2E Service - 16th July 2007

TNT, the most aggressive private sector postal services provider, said the wave of industrial action hitting Royal Mail underlined the need for it to develop a full-blown rival service.

The Dutch-owned company, which uses Royal Mail to provide "final mile" postal delivery, said its customers were suffering disruption from the action by the union but it would not be suing the Post Office because it accepted that the state-owned group was protected by "force majeure" contractual clauses.

TNT is the only company known to have been developing concrete plans to launch a complete rival service including the use of its own postal delivery staff. Its British boss, Nick Wells, said the impetus to proceed with such a project was higher than ever.

"It is still our strategic intent to create an alternative to the Royal Mail. It [the current dispute] highlights the fact that customers need options," said Mr Wells, although he refused to give any details about when the full-scale alternative would be launched, saying that would amount to releasing "sensitive commercial information".

TNT has been undertaking full-scale trials of next day door-to-door deliveries in Glasgow and Manchester although the vast bulk of its daily mail is distributed to homes through Royal Mail under the specially licensed "final mile" system used by several private operators.

TNT's group chief executive, Peter Bakker, said recently that Britain was one of its most important markets, showing healthy growth. The company is distributing more than 1 billion items of mail a year in the UK and many customers have migrated from Royal Mail, including telecoms group BT, which recently signed a contract worth up to £90m.

Others companies that have defected to TNT include food distribution firm Booker, mail order operation Express Gifts and another telecoms group, Caudwell Communications.

Business Post, another private sector rival to Royal Mail, said last week that its turnover had risen 13% in the first quarter thanks to a strong performance from its UK Mail arm which has won lucrative contracts from the financial services sector. Recent recruit Prudential takes the number of corporate customers to 400.

Among other postal rivals, DX has claimed it stands to make at least £10m this year out of the strikes, while Citipost has been trumpeting its winning of new customers such as the Economist magazine, which turned to the company to provide postal services during the dispute. "Regrettably, if the incumbent providers are unable to deliver what we need, then we'll have to go elsewhere and I'm delighted that alternatives exist," said Bob Milner, UK distribution manager of the Economist.

An estimated 10% of the 20 billion items posted each year in the UK are now handled by private firms while Royal Mail is also struggling against an overall downturn in annual mail volumes.

Source : Guardian Unlimited

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Mammoth Mail Task - 16th July 2007

Harry Potter and the Deathly Hallows is released on Saturday, marking the final chapter in an extraordinary publishing phenomenon.
Royal Mail has spent six months planning how to deliver 600,000 editions of the blockbuster on Saturday - that is, on average, one copy for every 43 homes across Britain.

The operation will see 180 extra trucks and an additional train service used to distribute the books from retailers' warehouses to 1,400 delivery offices across the country on Friday evening and the early hours of Saturday.

Alex Batchelor, Royal Mail's marketing director, said: "We have been working closely with retailers for more than six months to plan our Harry Potter delivery operation with military precision. "Postmen and women across the UK will be putting in a magical effort to ensure the delivery of these books is as successful as our performance for the previous two editions of Harry Potter."

Source : Telegraph Online

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Acas Called in.. - 16th July 2007

Ministers have asked Acas, the conciliation service, to report to them on the Royal Mail strike amid signs that the dispute could last for months.

Rita Donaghy, the chair of Acas, has been asked to give an interpretation of the dispute so far and the reasons for the entrenched positions.

Leaders of the Communication Workers Union (CWU) are scheduled to see John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, after informal talks last week. Acas has been present at recent meetings between Royal Mail and the union, although it has not been operating as facilitator because neither side has agreed to conciliation.

Royal Mail has suffered two national walkouts in the clash over pay and modernisation, and more strike dates are likely to be set tomorrow. The CWU could escalate the action beyond the one-day walkouts that it has called so far, or it may stage a series of regional strikes. The postal group has offered a 2.5 per cent pay increase but this was rejected by 77 per cent of members of the CWU who voted in a strike ballot.

Union sources say independent polling shows that support for strike action has risen to 84 per cent. Royal Mail claimed last week that Friday’s walkout was patchy.

— Allan Leighton, the Royal Mail chairman, recently held abortive talks with Sir Philip Green about buying BHS. He assembled banks to buy the stores group but negotiations failed.

Source : Timesonline

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BCC Criticise PiP - 13th July 2007

The Royal Mail have faced criticism from the British Chamber of Commerce (BCC) after their Pricing in Proportion initiative is shown to raise costs for small businesses.

60% of businesses participating in a survey conducted by the BCC stated that their postage costs had risen because of the change in pricing. Only 16% felt that Pricing in Proportion (PiP) had simplified the system, and fewer than 1% believe that it is an improvement on the previous pricing scheme.

“Royal Mail has increased costs for businesses and delivered no corresponding improvement in the service they provide”, stated Nick Frost, director-general of the BCC.

The PiP system was designed to be a revenue neutral exercise for the Royal Mail, basing costs on the size of mail as opposed to weight, reflecting the expense of handling larger pieces of mail. The survey indicates that PiP has failed to simplify the system for customers, and has even raised postage costs for some.

“Businesses are no longer wedded to just Royal Mail and incidents such as this will drive businesses away into the hands of competitors” said Nick Frost.

The Royal Mail are still working through the backlog of mail caused by Friday’s postal strike, and this survey shows further dissatisfaction with the company from small to medium sized businesses.

Source : Duport

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CWU Strike Statement - 13th July 2007

No Royal Mail services operated today as mail came to a standstill with close to total support for the CWU strike across the UK. Postal workers in every area supported the strike in overwhelming numbers. This support was at a level of 99% in big cities and all the largest Royal Mail workplaces and over 90% in all other areas of the country.

The strike was the second 24 hour stoppage in 2 weeks as Royal Mail continues to refuse to negotiate with the Union. The dispute between Royal Mail and CWU has developed over a 2.5% pay offer and the company’s intention to cut 40 000 jobs, cut postal services and implement a business plan that will reduce pay by 25% over the next few years. Additionally, the 2.5% pay offer was linked to a number of strings that meant that most workers would receive a pay cut. The Union has consistently offered to negotiate a settlement to the dispute but Royal Mail have refused. The Union offered to call off today’s strike if Royal Mail simply agreed to meaningful negotiations. They refused.

The company continues to offer to “explain its plans” to the Union. This was most recently repeated on Wednesday evening, July 11th when the Royal Mail Chairman, Allan Leighton and Chief Executive, Adam Crozier offered to meet with Billy Hayes, CWU General Secretary and Dave Ward, CWU Deputy General Secretary. This meeting took place and Royal Mail again refused point blank to negotiate. Allan Leighton did not even turn up for the meeting and simply joined via telephone link.

CWU General Secretary Billy Hayes commented:

“We are consistently trying to negotiate with Royal Mail but to be blunt they have no interest. They refuse to take the dispute seriously – to the extent that Allan Leighton can only spare 45 minutes from his other commitments for a virtual meeting by conference call. The public will see through his half-hearted approach to stop disruption to the mails services”.

The Union has continued to call on Royal Mail to take part in meaningful negotiations. Today, as part of that ongoing offer Billy Hayes and Dave Ward personally delivered a letter to Royal Mail HQ at 148 Old Street, London, again inviting Allan Leighton and Adam Crozier to take part in fresh and meaningful negotiations.

100 postal workers travelled on an open-top London bus through London to Royal Mail HQ to make their feelings known loud and clear to their boss and to demand a return to proper negotiations.

In total 500 postal workers attended the demonstration outside Royal Mail HQ. These striking workers supported the Unions delivery of the letter to their employers calling for negotiations.

General Secretary Billy Hayes told the demonstrating strikers:

“This is the only letter being delivered in the UK today and it is a very crucial one in that the future of the company and the postal services rests on it being read, understood and acted upon”.

The Unions executive will meet again on Tuesday 17th July. If there are no fresh negotiations, they are likely to call for more strikes.

Creative Mail Comment: The CWU have also said today that future action may be prolonged in order to deliver higher impact. As expected the single day strike strategy is in our view likely to be scrapped in favour of longer term action - 2 day action, or Single Day action from different sectors of the mail delivery process within Royal Mail. This strategy, if adopted, will potentially delay mail by up to 3 days or more.

Source : CWU Web Site

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Green D2D - 12th July 2007

Royal Mail is attempting to ease fears over the environmental damage caused by door-to-door mailings, by launching a new scheme to encourage and incentivise businesses to make their mailings carbon neutral.

The Carbon Neutral Door-to-Door scheme is designed to make it easier for companies to reduce the carbon footprint of their mailings by ensuring effective targeting of direct mail campaigns, as well as giving them advice on the types of paper, inks and varnish to use.

Ross Drake, general manager of Royal Mail’s unaddressed mail service, Door-to-Door, says: “The environmental issue is becoming more important to companies and consumers and it is moving higher up the political and business agenda.

“We want to change the industry and are prepared to spend any money to incentivise our customers to change to carbon neutral mail. And all this can be done without compromising the quality of a campaign.”

Businesses that sign up to the scheme can print a Royal Mail Carbon Neutral logo on their mail to demonstrate to their customers they are making a serious commitment to the environment. They will also have to display a WRAP Recycle Now logo to encourage the recipient to dispose of the mailshot in the most environmentally friendly way.

Drake adds: “Business’ commitment to reducing the impact of their operations on the environment is growing and this includes their marketing and advertising activities.

“Consumers are also increasingly demanding evidence of this commitment from companies they do business with. This helps our customers show they are taking this issue seriously.”

The scheme will have a set of standards companies must adhere to before they can register. It is initially being launched to businesses that use unaddressed mail as part of their marketing activities, but Royal Mail is also encouraging companies to apply the standards to addressed mailings as well.

The first raft of mailings bearing the Carbon Neutral logo are expected to begin in September.

Source : Precision Marketing

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Postcomm Anti-Competitive Ruling - 9th July 2007

Royal Mail is facing action from the postal regulator after a complaint from DX, one of its rivals, that it had breached pricing regulations.

Postcomm is due to make a formal ruling in the next few weeks, but the regulator has already outlined concerns over a new service that operates in DX’s area.

As the dominant incumbent, Royal Mail is not allowed to lower its prices selectively because that impedes emerging competition. Instead, if it lowers prices it has to offer those prices to everyone. DX argued that it had circumvented this by creating a new service and arguing that this served a niche market, rather than a broad one.

A spokesman for DX said: “DX remains very concerned about anti-competitive behaviour by Royal Mail and urges Postcomm to act decisively to meet their statutory duty to promote competition.”

Last year Royal Mail was fined £1 million by Postcomm for failing to ensure that it did not gain an unfair commercial advantage over its competitors in the “access to the last mile” market.

The move came after complaints from three of Royal Mail’s competitors at the time – Express, the dairies business, TNT and UK Mail – who said that they had been hampered in getting uniformly priced access to the final-mile delivery, which is carried out by Royal Mail postmen.

Two years ago the regulator found that Royal Mail’s advertising had breached competition regulations.

A spokesman for Royal Mail said of a potential censure from the regulator: “Royal Mail is operating in a fully competitive postal market and, in developing new products to meet the needs of our customers, Royal Mail’s approach is to ensure that we have fair, cost-reflective prices.”

Potential action from the regulator, which could involve a big fine, looms as Royal Mail faces another national strike this week in a pay dispute. The second walkout in an increasingly bitter dispute will begin on Thursday evening and will last for 24 hours. The timing is aimed to create maximum disruption in the run-up to the weekend.

The Communication Workers Union has asked Allan Leighton, Royal Mail’s chairman, to come to talks before the next walkout, but the union emphasised that new negotiations would be possible only if the postal group made a fresh pay offer. The existing 2.5 per cent increase was rejected by 77 per cent of CWU members in the strike ballot.

So far Royal Mail has said that it cannot afford to increase the offer. Talks at the conciliation service Acas have also failed to resolve the dispute. It is also likely that the CWU will set further strike dates tomorrow when the union’s ruling executive meets.

The last national postal strike 11 years ago stretched over several months.

Postal workers will demonstrate tomorrow outside the European Parliament in Strasbourg as it votes on Europe-wide proposals to remove all protections from incumbent postal operators and deregulate the market. European unions fear that full deregulation would lead to job losses and poorer postal services.

Source : Times Online

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2nd Strike - 6th July 2007

The postal union has ignored a last-minute plea from government ministers to drop its plans for further strikes by announcing yesterday a second 24-hour stoppage to start next Thursday night.

Royal Mail management said more strikes would achieve "nothing" except drive away further business to private rivals and lead to wider migration of customers to the internet.

Delivery services were badly hit by a staff walkout over wages and conditions last Friday which was followed by the closure of several large post offices on Monday in a separate dispute over plans to close 85 crown branches and move services to the retailer WH Smith.

The Communication Workers Union argued yesterday that Royal Mail's refusal to engage in fresh negotiations over pay and modernisation plans left it with "no alternative" other than to pursue further strikes. Dave Ward, deputy general secretary of the union, said action would be called off if the Royal Mail agreed to engage in meaningful negotiations.

In response, the employers said they were willing to meet at any time but expressed concern that the CWU appeared to be ignoring the challenge facing everyone inside Royal Mail "which is the absolute need to modernise". They pointed out that the mail market was declining by 2.5% annually, that 40% of Royal Mail's bulk business mail had gone to private firms already and claimed that rival firms were far more efficient than the state-owned group while paying their staff 25% less.

Adam Crozier, the chief executive of the Royal Mail, said in a letter to Billy Hayes, the general secretary of the CWU: "The business is already losing revenue. Your action on Friday has merely served to accelerate this process with more of our customers moving to other forms of communications media such as email and the internet. For some this is a temporary measure, but we know from experience that once businesses change the way they communicate to customers ... they rarely come back, if ever."

Source: The Guardian

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Further Strikes - 5th July 2007

The Communication Workers Union today announced a further day of strike action commencing the evening of Thursday 12th July and continuing through Friday 13th July.

Royal Mail group workers will begin 24 hours of strike action with shifts commencing after 1900 hours.

In announcing the strike, the union is again providing a further opportunity for Royal Mail to return to negotiations or face more strikes. The Union has written to Allan Leighton, Royal Mail chair, to personally take part in fresh negotiations. (Letter attached in full)

Deputy General Secretary, Dave Ward said “Allan Leighton has the personal opportunity to avoid more strikes, simply by returning to meaningful negotiations. If he again is dismissive of his employees then there will be further strike action.

Over 95% of the workforce took part in the strike action last Friday; it shows the extent of the overwhelming support of the workforce to achieve both a decent pay rise and an agreed approach to automation and major change.”

“This problem will not go away - Royal Mail are in denial if they think otherwise and it is in Allan Leighton’s hands to take the workforce forward with him.” adds Dave Ward.

Source: Communication Workers Union

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Royal Mail threatens 2nd postal strike - 5th July 2007

Bulk mailers are bracing themselves for another potential postal strike, which could happen as soon as next Thursday (12 July).

The news comes after Postcomm refused Royal Mail's request to suspend the payment of compensation to bulk mail customers for two years following Royal Mail's recent strike. Instead it will suspend payment until the end of the financial year.

In a statement on its website, the Direct Mail Association (DMA) said it was exploring alternative postal options for customers.

It stated: "Hopefully this industrial action won't last long. In spite of competition, there are only very limited opportunities to use another operator for delivery to customers.

"If it [the industrial action] looks likely to continue then the DMA will actively explore other viable options for members."

Royal Mail said it has well-developed contingency plans that it will put into place in the event of any action and that it "will do everything possible to minimise the impact on customers in the event of further strike action".

Robert Keitch, DMA director of media channel development, said that as long as the strikes didn't continue for prolonged periods, there wouldn't be a serious effect on the industry.

"There's been a fairly low-level impact on the industry, but if it's sustained and ongoing, it will not do us any good. Anecdotal evidence suggests that the world didn't end with the strike last week."

The first national postal strike in 11 years took place on Friday 29 June and since then there has been little movement on negotiations.

The strikes kicked off after talks broke down between Royal Mail and the Communications Workers' Union (CWU) over plans to modernise the service. The core issue was a 2.5% pay deal, which Royal Mail claimed it is not prepared to change.

The CWU said it would officially announce today (5 July) whether it will start new strikes, which reports suggest might span several days in different areas of the country.

Source : Printweek

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Royal Mail Strike Statement - 28th June 2007

The team at Royal Mail met with the union last afternoon and again went through the business plan and explained the reality of the commercial pressures we now face.

We explained again the need for Royal Mail to modernise, just as all our major rivals have already done, if we are to be able to compete for business in an increasingly tough marketplace.

Royal Mail is already losing business because we have not yet modernised and therefore our prices are higher than those that rivals are charging in the intensely competitive business mail market, which makes up 90% of all postings.

Unfortunately, we were unable to reach agreement and it now looks inevitable that the union will go ahead with a strike on Friday, although we remain available to meet with them at any time.

Royal Mail is extremely disappointed that the union has failed to grasp how damaging a strike will be for our customers, our people and the company.

The facts remain:
• The mail market in the UK is declining by 2.5% per year
• Royal Mail has already lost 40% of bulk business mail to rival postal operators
• Our rivals are 40% more efficient not because their people work harder but because they have already modernised and have much more technology
• Our rivals pay their people 25% less than we do at Royal Mail

Source : eGov Monitor

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Royal Mail 'May end six days a week Post - 26th June 2007

Royal Mail could be allowed to cut deliveries from six to five days a week following a review by the postal regulator into the need for a six-day service in a competitive mail market.

The state-owned postal operator was allowed to end second daily deliveries three years ago to help restore profitability.

Now Postcomm, as part of a sweeping review of the future of regulation, is considering reducing compulsory deliveries to every home and workplace to five days a week. The regulator is also sympathetic to a request from Royal Mail to limit this universal service obligation to stamped letters and packages.

Sarah Chambers, Postcomm chief executive, told a conference in London on Monday that the current rules provided more of a “Rolls-Royce” universal service than elsewhere in Europe, where five days a week was standard.

The requirement to deliver post to the front door was another Rolls-Royce aspect of the universal service obligation, she added. In other European countries, post was often put in mailboxes at the entrance to a property or block of flats.

At the annual postal service conference organised by the Institute of Economic Affairs, Ms Chambers said that insisting on a Saturday delivery could lead to higher prices for other services.

“If people see a rise in the cost of stamps to preserve the present universal service obligation, they may wish to look at the options.

“There are other ways to deliver a service to customers in far-flung areas than insisting on a six-day-a-week service.”

Business users warned Friday and Saturday deliveries were important for direct marketing.

“If you want to take it down to five, it doesn’t have to be Saturday you lose,” said Alan Halfacre, chairman of the Mail Users Association.

Source : FT.com

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Government will not intervene - 25th June 2007

The government have made it clear that they will not prop up Royal Mail.

Trade and Industry Secretary Alistair Darling said that whilst the talks between Royal Mail and the CWU had so far made no progress, it was something that would have to be resolved by those involved and if strikes continued, it would be extremely damaging for customers.

It gives a very clear signal that the goverment are not prepared to get involved in the dispute. Experts warn that Royal Mail could see its market share plummet through infighting when it should be modernising and tackling competition.

Postal workers are to stage the first strike in 11 years with a 24 hour strike on Friday 29th June. The CWU has made it clear it will not settle for anything less than a 4.8% rise (as opposed to Royal Mail's 2.5% offer) and a reappraisal of its modernisation programme which Royal Mail says is essential to match automation used by its rivals, and that the CWU says will lead to 40,000 job losses.

Source : Hellmail.co.uk

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Strike could go on for 6 months - 24th June 2007

Royal Mail executives are preparing for months of strikes as the company refuses to bow to union demands for an increased pay deal and changes to its five-year modernisation plan.

As the Communications Workers Union prepares to call out members this week for a one-day stoppage that will be the first national strike for 11 years, senior figures have told The Observer that Royal Mail's board is prepared to weather six months or more of action rather than dilute its proposals.

Article continues
Negotiators from both sides are set to meet tomorrow in talks called by Acas, but sources from the company and the union have indicated they do not expect a breakthrough as neither is prepared to alter its demands. The CWU has said this week's strike will be the first in a series.

A Royal Mail source said: 'It will go on for months and then people will realise it is serious. What happens is the turnout for the first strike will be high but by the time you get to the fourth it will fall. We don't mind having three to six months of disruption if in five years' time the company is in the right place.'

The CWU has rejected Royal Mail's offer of a 2.5 per cent pay rise and up to £800 in bonuses funded by productivity improvements, and is demanding negotiations over modernisation, which it claims will amount to 40,000 job losses. Its 127,000 members two weeks ago voted overwhelmingly for strike action.

Royal Mail points out that it has lost 40 per cent of the market for business post to private operators in the past year. It is refusing to alter its £1.2bn plans, which will attempt to close the 40 per cent productivity gap with private operators.

James Greenbury, chief executive of rival service DX, told The Observer it had received a 5 per cent increase in turnover in the past two months. 'People are coming to us and saying they are doing so because of the strike threat,' he said.

A CWU source said the union had written to Royal Mail chairman Allan Leighton and chief executive Adam Crozier saying it was prepared to talk, but the company would have to present new proposals.

Source : The Observer

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Royal Mail Request Suspension of Compens - 22nd June 2007

Royal Mail has applied to suspend the bulk mail compensation scheme in the light of the first national postal strike in the UK for 11 years.

The industrial action, announced today by the Communications Workers Union (CWU) deputy general secretary Dave Ward is to be held Friday 29 June.

A spokesperson from watchdog Postcomm told printweek.com that while consumer post will not be affected by Royal Mail’s bid, for bulk mailers, a successful application will result in the mail service having two years before having to compensate companies’ losses caused by the strike.

The spokesperson confirmed that “It has made a request in this instance,” and Postcomm’s decision would rest on Royal Mail’s efforts to “minimise disruption”.

The strike has been scheduled after talks broke down between Royal Mail and the CWU over plans to modernise the service.

The core issue was a 2.5 per cent pay deal, which Royal Mail claimed it was not prepared to change.

In a statement, Ward alleged that Royal Mail had been “deliberately misleading the public on what this dispute is about.

“We have tried to reach an agreement but Royal Mail are refusing to negotiate... We have also agreed further strike action within in two weeks from the 29th June that is designed to maximise the impact on Royal Mail but at minimum cost to the CWU members.”

The CWU said it is committed to reaching an agreement in the time leading up to the strike.

Source : Print Week

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Strike Date Set - 21st June 2007

Royal Mail workers are to hold a 24-hour strike on Friday, 29 June, the main postal union has confirmed.

For more on this news item, please go to the home page and follow the link to the Network Disruption page.

Creative Mail Solutions Limited

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Compensation delay - 21st June 2007

Royal Mail’s bulk mail customers will have to wait until the end of July to learn when they wi