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@IsleworthSpy @OliGarch
I appreciate I threw those number together pretty quickly and no doubt generalised, and I'm talking with knowledgeable people so I'm not going to pretend otherwise.
The 22k number was based around assumptions and because it would still be on 6 day week for 1c it could reduce that. We're not talking about that many job losses in any case because of vacancies, etc. but either way we all agree that there are definitely significant savings from the USO proposal. The genius of RMGs proposal to dodge the requirement of any Government intervention does tend to suggest that Ofcom might lean towards it as the path of least resistance.
@ Talk2Much.
Duty structures? That was not shown in the correspondense that i've seen. If you haven't seen it, this is how it looks. Rouites 1 - 6.
Week 1, Monday:
Routes 1, 2 & 3 all items delivered by one postie on each. It doesn't say if they are single vans etc.
Routes 4, 5 & 6. Parcels and 1st class letters
Tuesday:
Routes 1,2 & 3. Parcels and 1st class letters.
Routes 4, 5 & 6 all items delivered by one postie on each.
And you keep flip flopping.
This lends you to a Saturday off every other weekend. Although, if you're a non driver, it would seem that you have every Saturday off. Rest day covers are in the mix as part of this structure. Reserves will be reduced as there will less duties.
However, if duties are reduced in size, everything increases.
I imagine because of the parcel structure within this new idea, DPR's (as stand alone jobs) will no longer be needed.
22,000 job losses in delivery? No chance.
I do wonder though, if outdoor actuals are being used to judge what can be lost, and where.
Talk2Much, thank you for the breakdown. 22,000 job losses in deliveries sounds extreme especially as the press have been reporting 1,000 job losses however even if we take the middle ground of 10,000 full time job losses, this would be a saving of around £300m to the business year on year once pension contributions and other sundries are taken into account.
Macro nonsense,? Macro economics?......lol.....
@IsleworthSpy
Depending on your duty structure, it's usually 6 covering 5 so the reduction isn't so significant. The 1-in-4 (Saturdays off) duty structures which force part time jobs would drop the part-time cover, so a higher proportion of full-time roles may support staff retention which has been a major issue lately. If I have 42 duties on a 1-in-6 then I'm down to 35, a reduction of 7, and this is now equal to the number of deliveries I have. My call rate example suggested 1 extra route for every 5 based on the increase, so we're back to 42 deliveries but only every other day, so on any given day 21 deliveries. That clearly won't be a reduction of another 14 heads because, as you rightly point out, there needs to be a solution for small parcels and first class on the deliveries that aren't going out each day. I think the theory suggest that 4-6 walks could be covered by one person in this instance, so we could add 7 duties back in. 21 deliveries, 7 1c/parcels could mean a reduction of 14 roles in this example, or 33% of duties in delivery. There's a lot of duties that are less likely to be affected - parcel jobs, indoor jobs, collections, etc. so that 33% isn't going to be replicated across the business. However, if we assumed everywhere is on 1-in-6 across approximately 55k deliveries, you'd be potentially looking at circa 22k delivery jobs going just for starters.
There would be a lot of work involved in the transition and it would take time, but I'm sure our CEO and his team have considered plenty of options, given how well thought out the proposal was in the first place.
AbjectPerformer, the biggest single expense for the UK operation is staff wages and salaries. We were always taught to "attack the biggest loss" first so it would naturally follow that getting the staff budget under control would be the first port of call? Given the sums involved, I wouldn't call it macro at all.
@ Talk2Much. 20.40 post.
You will need 5 posties instead of seven to cover 7 duties. 28% less.
Using an office with 42 routes as an example, that would be 12 routes gone, leaving 30. Using RM figures of an increase in call rate from 40% to 70% would then require an extra 75% of duties. An extra 23, making 53. This includes rest day covers, but not reserves, which i think is about 25% of staffing level. Not much saving there.
The one thing that i didn't see in RM's version of how this will work, is who delivers the small tracked parcels, on the days that the parcel/1st class letters postie is delivering on his route.
@ AbjectPerformer. Macro nonsense? This is what RM do. It would be so much easier just to strip out 15% of duties, and fail.
Talk2much not only do you talk too much, none of it is significantly relevant enough to bother saying. It’s all macro nonsense .
Change your name to talk2muchwaffle
@IsleworthSpy "I posted on here a while back that RM said that delivery size would reduce because of the increase in call rate. Thereby increasing the number of routes. Not so, it would seem."
There's more than one thing in play here. Yes, we can expect call rates to increase, but only on delivery days for each route. If each route gets delivered only every other day then the call rate will increase, but only by between 20% to 40% (I've quickly put some numbers together to clarify my thinking further down). Unless the number of deliveries increases significantly, because each delivery only goes out only 3 days a week instead of six, the suggestion of " a net reduction in daily delivery routes of 7,000-9,000." does not seem unreasonable. I am certain that the people building the proposal did far more detailed modelling than I've done.
Call rate variation - if on Monday and Tuesday you hit 40% of your addresses then, theoretically in a worst case scenario where every Tuesday address didn't get a letter Monday, you'd have an 80% call rate, increased by 40%. Many addresses receive mail regularly and many addresses receive very little, so I'd probably expect an increase of around 25%. On your busy days you start at a higher call rate (could be 60%-70%), which also makes it more likely that letters on day 2 will be addressed to houses that already have mail waiting.
If an average delivery has 600 addresses and takes around 5 hours at a 65% call rate, an increase to 80% is only an extra 90 addresses. These are addresses that the postie would have walked or driven past on any given day, so it's only a driveway and letterbox. If half of these extra calls required a door knock, you're adding maybe an hour maximum. It gets more complicated at lower/higher call rates where the impact would be more/less significant respectively. Either way, this would very loosely suggest that for every 5 deliveries you'd need to add one, but only half of the resulting total are delivered to on any given day.
There would be an increase in parcel deliveries because they'd still need to find a way to deliver any first class for the deliveries that are not going out on any given day, but those volumes are relatively small so not a huge impact.
Now I remember why I called myself Talk2Much :)
@ DerekR, JBT.
This is the interesting part from the RNS.
"""Royal Mail's proposal, if implemented, would reduce the net cost of the Universal Service by up to £300 million per year, through a net reduction in daily delivery routes of 7,000-9,000."""
I have a feeling that failure to meet delivery guidelines, will become more commonplace.
I posted on here a while back that RM said that delivery size would reduce because of the increase in call rate. Thereby increasing the number of routes. Not so, it would seem.
JB thanks for flagging up that RNS, it is good to see such an up beat announcement with forward looking information that looks far more credible and balanced than the stuff that was being published under Thompson and Back. The proposals about the 2 days to deliver DSA traffic looks a very sensible one, just have to hope that Ofcom don’t impose conditions on it (in price control or scope terms) that undermine it. There is also the risk that it will remove all the barriers to entry to end to end letter and encourage competitors to start cherry picking at scale again.
I cannot see the board accept anything under 4.30 , as it simply wouldn't pass
Mr k owns 27, small investors own 18% (I think) that leaves 55% in the hands of other major institutions...
Cannot see them selling out cheaply...
It's the usual play from a board under offer. Set out the future business case in order to push up the offer price.
Could see other bidders coming in as well.
Kretinskys updated offer should be out soon.
Interesting RNS on USO reform and Business progress update. In case anyone misses it in amongst holdings updates.