Thursday, 8 May 2008

Snail Mail shake up


Well, we have already said here that it wouldn't work.

The Independant Review Panel has pretty much decided that there is little or no benefit of mail privatisation to UK households or small businesses. In fact all it has really done is damage the universal service that everyone benefited from. Without the subsidy from the business customers the universal service cannot survive.

Royal Mail has lost or is losing its most profitable customers while being forced to keep its most unprofitable and loss making ones. Regulators already ruled out posting zones, the abolition of 2nd class and reduced collection and delivery times some while ago, but you can be sure they will all resurface soon.

Recently La Poste, France's national postal carrier has bought a controlling stake worth around £20 mil in BTB Mailflight, a British company that handles international business mail. La Poste already operates La Poste UK and this deal is an expansion to allow collection and sorting operations.

And here is the problem. La Poste has has a monopoly in France. It faces no competition in it's domestic market and is also allowed to operate in the liberalised UK mail market. It can pick the best bits from the business market here and ignore the less profitable. Meanwhile Royal Mail must take the less profitable and cannot pick up any business from France at all.

There are currently 19 licensed mail carriers in the UK, and that will only increase as there are almost no restrictions to entry and a license cost just £50.

Why did we allow this situation to develop..? erm, wasn't it to allow greater CHOICE for the consumer, cheaper postage rates and an improved service.
It wasn't a sneaky way of dumping Royal Mail,Parcel Force and Post Office Limited onto the private sector was it? Well now that the RM requires a "fundamental reform" then come on Mr Darling, you can tell us, we can keep a secret..

9 comments:

Ed said...

I fear that I may be turning into a Leftie: perhaps some infrastructure industries can't operate sensibly in a free market?

Anonymous said...

Blue Eyes has a fair point, but I still think there is a much better structure achievable within the Post Office. The Government cannot own the entire delivery network and expect any decent competition.

CityUnslicker said...

Post is a difficult one, universal obligations do require Government intervention. I don't think understanding that makes us lefties.

Otherwise markets can be undermined by the tyranny of the majority.

Bill Quango MP said...

lettersfromatory:

Very good article on hellmail about this...

"Deregulation has been of no real benefit to small business or domestic consumers so far, and we're already paying more for less services."

"and the future of the USO has been raised in the European Parliament, no one really knows quite how it should form part of a liberalised market or who should pay for it. The only really concrete statement from the EU was "Well, countries can pay towards their own USO if they want to."

Ed said...

Once liberalisation has failed, we can start down the glorious path towards a European Postal Service.

Anonymous said...

Um, I think you'll find it is all to do with an EU directive.

Nothing our provincial government can do about it, I'm afraid.

Just like so many other things.

Anonymous said...

Anonymous said...

Um, I think you'll find it is all to do with an EU directive.

Nothing our provincial government can do about it, I'm afraid.

Just like so many other things.

Except that Ireland has already exempted their post offices and successfully challenged the EU in court over it.
Germany has raised a minimum wage to keep other companies out.
Denmark and Sweden are combining their postal services together to prop them up.. and on it goes.
If you want something , you get it.
Here the government just doesn't want the mail

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