The Royal Mail today blamed falling mail volume for a loss-making situation in its letters business. Despite a positive impact from its modernisation efforts, the number of letters delivered each day has fallen from 84 million to 68 million, echoing a decline in the number of letters being felt by postal operators around the world and further supporting the findings of the Hooper review which suggests that the Universal Service obligation is unsustainable without a major overhaul of the UK postal service.

As mail volumes continued to decline this year, increased competition saw operating profit fall to £52 million in the six months to the end of September. Operating profit in the first half of the 2010-11 financial year was just over 1% on Group-wide revenues of £4.4 billion.

Revenue actually fell more sharply than operating profit, which Royal Mail put down to a positive impact from modernisation, but the pace of change is still not keeping up with the negative impact of volume decline and increased competition. The latest figures are likely to bolster government plans to sell the business in 2011.

Mail delivered for other companies through access agreements rose by 13% for the same period. Royal Mail loses an average of 2.5p on access mail, which accounts for more than one in three of all letters delivered

The Group’s other two businesses, Parcelforce Worldwide and GLS, the European parcels business, both increased their operating profits in the first half of the year, despite intensifying competition in their markets, and both are leaders in their markets for customer service. First and Second Class mail, Standard parcels and key business mail services are beating their targets according to the latest preliminary figures.

Moya Greene, Royal Mail Group’s Chief Executive Officer, said:

“Trading conditions over the last six months have been exceptionally tough. I pay tribute to our frontline employees for the way they are getting on with the essential modernisation changes we are introducing. But with widespread predictions in the postal world that mail volumes will continue falling, perhaps by up to 40% over the next five years in the UK, it’s absolutely vital we step up the pace of modernisation to become more efficient to ensure we preserve the all-important, one-price-goes-everywhere Universal Service for all our customers and keep providing the services our customers need and want.”

Billy Hayes, CWU general secretary was more scathing and accused the government of setting the Royal Mail up to fail, saying:

“Today’s results are the strongest argument yet for keeping Royal Mail publicly-owned and fully integrated. Overall there was a Group profit and the quality of service has been maintained. Would anyone expect a private company to provide the universal service and good quality of service in this context? We think not.”

Dave Ward, CWU deputy general secretary, said:

“These stark results leave us in no doubt that regulation of Letters and unfair pricing controls are strangling Royal Mail. In our opinion, pricing and regulation – not mail volumes – are the main factors here. Mail volumes fell by less than the same period last year but the loss of 2.5p per item to competitors to deliver their mail is a recipe for disaster.

“There is no private company better placed than Royal Mail to deal with the challenges in the postal industry. The modernisation programme is fully-funded and is already delivering productivity improvements. If the pension issue is dealt with by government, Royal Mail’s cashflow will go into the black by removing the £282 million annual deficit payments.”

Steve Lawson, editor for Hellmail Postal News said:

“Not only are letters in decline in real terms, but from a financial point of view, access mail is “fluff mail” which does not deliver anywhere near the same revenues as mail that arrives directly through Royal Mail’s front door. In terms of profitability it is like filling out a good proportion of Royal Mail lorries with polystyrene to make up the numbers. From Royal Mail’s point of view, volume decline is actually greater than it is on paper. If you put quantity and profitability on the same graph, they would be heading in different directions” he said.

via Royal Mail Letters In The Red In Loss Making Year.

Copyright © 2008 Hellmail – All Rights Reserved

Today is ‘World Post Day’, marking the establishment of the Universal Postal Union (USU) and the beginning of the free flow of global mail. In the United Kingdom, the origins of the postal service date back to 1516 when Henry VIII established a “Master of the Posts” - which evolved into the office of the Postmaster General. However, it was not until the 31st July 1635 that the Royal Mail service was finally made available to the public, with, at that time, postage being paid by the recipient.

Next month sees another instalment of the “Future Of Postal Services” conference in London, hosted by Marketforce. The subject matter is a good indication (if any was needed) that all is not right with the post. We have a new government on an austerity drive, the future of the Royal Mail still unresolved, and privatisation apparently as controversial as ever. Essentially, the postman is facing the same fate as the milkman and the bread van, swept aside by our appetite for the immediate and the more accessible. As we edge closer to 2011, this 370-year-old postal service is squeezing yet more drops from the business in terms of efficiency savings, knowing full well that it will be insufficient to permanently cure its ills. Without urgent attention, it simply will not be able to continue as it is.

As has been noted, Royal Mail Letters is precariously close to the wire in financial terms (if not over the wire) and to make matters worse, there is neither the will or the money to bail it out – even if the EU would allow the coalition government to do so. The political dithering and the difficulties faced by Postcomm in trying to create a regulatory framework that encourages competition on the one hand, and at the same time protect the Universal Service (tall order), have not helped matters. Whilst not being suggested for the moment, reducing delivery days to five or even four days a week could ease some of the cost burden associated with providing the universal service, but even this would have a cost attached to it, both operationally and in weakening its door-to-door market which is increasingly vital for its survival.

This weekend also saw the closure of the Liverpool Mail Centre, despite a ferocious fight by workers and local people to keep it open, and with it, the Liverpool post mark. Mail is now to be sorted at a new site in Warrington and although a proportion of staff will transfer to the new sorting office, for some it will be impractical. Other centres forming part of a countrywide closure programme include Doncaster, Hull, Newcastle, Bolton, Darlington, Crewe and Middlesborough but the picture is becoming a common one across the UK as the Royal Mail brings in just a few super-centres close to main motorway routes, transferring sorted mail to smaller delivery offices within key towns and cities.

Even with a mammoth reorganisation of its distribution network, these changes cannot come quickly enough to help offset the huge financial pressures being felt as mail volume declines year on year. In many areas the bones, having already been picked clean, are facing another round of operational cuts as the Royal Mail digs even deeper to stay afloat.

Richard Hooper, whose second report on the future of the Royal Mail was as damning as the first, is adamant that private capital far from destroying Royal Mail (an accusation levelled by the Communication Workers Union), will sustain it. Given the difficult problems faced by the company I have no doubt he is right although for customers, the fallout from such a transition is likely to mean much less for considerably more money and there still remains a small problem of poor industrial relations between management and the workforce. Under private ownership, for profitability to become king, the rulebook would need to be completely rewritten and I imagine, working contracts redraughted unless the intention is to drag the remaining workforce, kicking and screaming along with it. The CWU is rightfully concerned.

The Communication Workers Union, which recently, in conjunction with Royal Mail management, agreed a way forward following a spate of strike action, is now being told, effectively, that despite a formal agreement it has all been too slow, too late, and there is no future in keeping the Royal Mail in the public sector.

To be honest, the transformation of the Royal Mail has been extraordinarily slow and in operational terms already falls behind most of the major operators in Europe – particularly with respect to mail sorting. Nevertheless, privatisation is the last thing the CWU wants and having used up all of its nine lives in terms of using industrial action as a bargaining tool, is now centred on political game-playing to gain further support in government for halting privatisation. Personally, I think that those highlighting the dire financial situation at Royal Mail are likely to have far more sway here, even if the CWU manage to gain some extra time. The need to reduce the national deficit is centre stage, and with nothing but a half crown and an old Spangle in the cash tin, privatisation is likely to win out.

Stamped mail is in decline across the globe and and is forcing Royal Mail Letters to shrink. A good proportion of its business has migrated, in a spectacular fashion, to email and text messaging and over the next few years, digital mail will have an increasing share of the marketplace. Eco-warriors will no doubt cheer at the prospect but whilst a paperless mail system may appear to be a wholly ‘green’ affair, the infrastructure (the PCs & servers etc) which would need to be on 24/7, also use energy. Consider also that many of the forests we have today are renewable and supply the paper industry. For that reason the jury is still out on whether digital really is as green as it claims to be. What it would do is reduce costs – the costs associated with paying thousands of salaries to the foot soldiers of the business.

I’m not singling Royal Mail out in particular since the same situation faces the USPS, and almost all postal operators, but to many, privatising the Royal Mail is akin to selling the crown jewels to a private consortium. The Brits still regard the Royal Mail as their own, as traditional as brown sauce on a bacon butty and a paper hat at Christmas time. We positively wince at the prospect – it simply isn’t cricket. That may be so, but we have also bought into the internet in a big way and the younger generation expects pretty much everything at the push of a button. There will undoubtedly come a point where the decline in stamped mail bottoms out and to some extent new business has been created through the growth in online sales but sustaining a universal postal service is going to be a neat trick to pull off.

There are the polls of course, those that suggest more people would prefer Royal Mail remain publicly owned, but opinion (with perhaps the exception of the poll tax) is rarely a basis for government policy, particularly when the economy is not only flat, but in debt. My concern falls into two distinct areas, that of protecting as many jobs as possible and in ensuring that the postal service is reliable, trustworthy, and affordable. Yes the Royal Mail probably would thrive if sold off, but business relies heavily on the mail, particularly those despatching small packets, and the change could mean we all pay significantly more for significantly less. Like the dropping of less profitable bus routes as bus companies became privatised, the postal service could fall well short of expectations when the driving force is wholly a monetary one. Regulation would need to be extraordinarily robust.

The optimists would say that a far more competitive environment is good for business, but even with a new boss at the helm in the shape of Moya Greene, I’m not sure there is enough value in a business that is seeing a year-on-year fall in mail. The Royal Mail, or whatever it becomes known as, will need its finger firmly on the pulse of digital mail systems lest its competitors seize the opportunity to provide lightning-fast alternatives.

© Hellmail.co.uk – The Global Postal News Site

Saving The Snail Mail.

The stamps will be the first in the world to work with image recognition technology. When activated by a smartphone on the iPhone or Android platforms the stamps will launch exclusive online content created by Royal Mail.

Philip Parker, Royal Mail Stamps spokesperson says: “This is the first time a national postal service has used this kind of technology on their stamps. We’re very excited to be bringing intelligent stamps to the nation’s post.

“Intelligent stamps mark the next step in the evolution of our stamps, bringing them firmly into the 21st century. Royal Mail’s special stamps mark key events and anniversaries in the UK’s heritage, through a programme which aims to be both educational and informative. Through Intelligent Stamp technology, our stamps will open up to a whole new world of information, interest and fun to stamp collectors and the millions of people who will receive them on letters in the coming months alike.”

The first Intelligent Stamps are incoporated into the Great British Railways special stamps issue. For the launch, Royal Mail has delved into its rich cultural history and created a short film of Bernard Cribbins reading W H Auden’s poem, The Night Mail – first made famous in The Post Office’s own film from 1936.

Bernard Cribbins says: “WH Auden wrote the Night Mail poem in 1936 for the Post Office’s own blockbuster film of the same name, which has, for years, remained in the hearts and minds of many. I’m excited to be bringing it to a brand new audience, and to help take Royal Mail Stamps into a new era by using state of the art interactive technology.”

Intelligent stamp technology is free to use and will be available on selected future special stamp issues.

How to use the Intelligent Stamp

Using an intelligent stamp is really simple. All users need to do is go to the app store on their smartphone and search for the JUNAIO application. Junaio works on both iPhone and Android phones. iPhone users will find the app in the iTunes store and Android users need to go to the Android Market. The application is free of charge and you can easily download it to your phone, just as you would any other app.

Once you have downloaded the Junaio application, open it and then go to the Royal Mail Channel and select the Great British Railways logo.

Once this has been activated, the phone will then open its camera. Place the camera over the stamp image as if you were taking a photo of the stamp. When the stamp is recognised, the exclusive Royal Mail content will run automatically.

BBC News

A postcard from Poland that was addressed “Khumi, Yellow Door, Wilmslow, England” has arrived at the correct house.

Which prompted this letter to the editor:

Sir, Congratulations to the postmen of Wilmslow (news report, Feb 16). My brother (6ft 5in in his socks), who lives in the second largest town in Orkney, once received a card addressed to “The Big Englishman, Stromness”.

Followed by this:

Sir, Like “The Big Englishman, Stromness” (letter, Feb 19 ), my late father also received prompt delivery of a letter with a descriptive address.

His was: “Colonel with three moustaches, c/o Buckingham Palace, London”.

Larger-than-average eyebrows are a (male) family feature.

Which in turn led to:

Sir, Some years ago, I had a similar postal experience to those of “The Big Englishman, Stromness” and “Colonel with three moustaches” (letters, Feb 19 and 22 ).

I received an aerogramme addressed to “Napoleon and Josephine, Halesworth”.

My husband (Nicholas) wasn’t sure whether its exceptionally speedy delivery was cause for congratulation or concern.

An Experiment

Take one blank postcard, write your own address on one side with a stamp, and your friend’s address on the other side with a stamp.

What do the sorting office do in this situation?! They could either

a) Send it back to me
b) Send it to Dave
c) Send it backwards and forwards, or
d) If they have a sense of humour, cut it in half with a cheese wire!

I thought that if I sent it from within my postcode area they would send it straight back to me as the nearest address. So, I popped the prepared postcard inside an envelope and sent it to a friend who lives approximately between me and Dave to send on from there.

Postal Tug of War
de omni re scibili et quibusdam aliis

Click for more signs of abuse from the UK

icWales – Jiffy bag bomb scare

“When letters were delivered with the stamps uncancelled, I used to cut them off and re-use them. But now I think that that was dishonest, so I ignore the temptation. After all, the Royal Mail has completed its obligation of posting that letter to me, so why shouldn’t it be paid?”

Click to read the response, which gets extra points for the use of the word ‘churlish’.

Modern morals – Times 2 – Times Online