Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Well that was a massively tedious waste of time. This bloke needs to get a life.
As it turned out the programme wasn’t particularly good for Royal Mail. The brief mentions RM got we’re about the £5.6m fine and how an independent courier in Merseyside was making a living undercutting the business of price, while beating it on quality on local to local items.
Evri on the other hand were positioned very positively as the UKs largest dedicated parcel carrier, and got surprisingly good coverage for the way they deal with damaged parcels.
I’m sure we will all be glued (or cellotaped) to this programme on ITV1 at 8.30pm. Is anyone on here making an appearance ?
Oli, I don’t think Royal Mail were ordered to lose customers. Postcom incentivised the largest customers to transfer their business to upstream competitors through a price control mechanism called the access head room control.
This required RM to set its retail prices at a level which provided headroom for competitors to undercut them and still make a profit.
This was done by Postcom in pursuit of the obligation imposed by legislation requiring them to create competition in the market.
“ That half will alternate every business day, meaning parcels, express and priority mail will be delivered daily, while ordinary letters and unaddressed mail will be delivered every second business day.”
Isn’t this what is already supposed to happen to machine sorted 2c and economy letter ? If so the incremental efficient benefit of including the manually sorted residue would probably be offset by the task of trying to work out, extract and set aside non-priority items in the daily workload.
It is pretty normal at this time of year for all the major couriers to be falling short of specification as they struggle with peak volume. Meta pack or IMRG used to publish a heat map showing the situation on a live basis and in this week relative to Xmas I can’t ever remember seeing more than one carrier without significant backlogs. Unless the sector was going to invest in massive over capacity against volume norms this is always going to be the case.
JB my fourth attempt to reply, because this bloody system keeps reloading and losing content.
From recollection Ofcom expects an economically efficient operator to make up to 5-10% on the provision of USO services within its price control approach. If RM is loss making on the current USO spec because it isn’t operating efficiently it could be even harder to make a profit on a less demanding USO because it would have to shed legacy costs as well as improving efficiency.
All the stats I’ve seen from sources like Eurostat, the EU, and Wikconsult seem to show that countries with the least demanding USO specifications e.g. Norway have seen the most significant letter volume declines, where those with the smallest declines also have more challenging USOs (e.g. Germany). This maybe chicken and egg stuff, but common sense would suggest that the more the service specification is reduced the easier it is to offer alternatives.
Mike you need to get out more. The subsidies La Poste received from The French government are mostly for subsidised delivery of newspapers and to keep open unviable Post Office branches for social reasons. The U.K. Government also subsidises these things and has handed out more tax payer money in these directions than the French since RM privatisation.
France, Germany and the U.K. are of comparable size by population, why wouldn’t we want to benchmark our USO provision against them rather than much smaller states ? Y
This Copenhagen Economics Document has a very detailed analysis of the scope of the USO in Europe. Most postal operators still provide a next day service under their USO and are therefore obliged to deliver to every address on each delivery day. As Broch says France, Germany, the U.K. and Malta still deliver USO traffic 6 days a week.
I still don’t understand why people think USO degradation is some form of holy grail solution for IDS profitability. It will inevitably be accompanied by a price control adjustment which returns large amounts of any efficiency gains to customers, and constrains RM profit potential on USO service provision to the same level as it does now, but on lower volume and revenue levels.
https://copenhageneconomics.com/wp-content/uploads/2023/01/Main-Developments-in-the-Postal-Sector-2017-2021-volume1-and-2.pdf
Sid, Q3 results which include figures for the Xmas peak are usually published in late January (this years were published on 26th January)
Full year results are normally published in Mid May (this years were published on 18th May)
It’s good to hear the network is busy as we pass from Black Friday through to Cyber Monday. Recent ONS data on retail sales suggest online is holding up better against cost of living pressures than high street retail.
It would be interesting to know if the growth in popularity of buying cheap rubbish from the Temu market place is resulting in volume for RM and GLS.
Cheers Oli, I’m currently in a very small minority who believes Marx was right but as things evolve the minority will move to a majority. That said I probably won’t be around by then and if we continue to do too little on climate change nor will any of the rest of you.
Please enjoy your weekend everybody :-)
Oligarch instead of banging on about how the USO spec should be diminished,
RM/IDS could take the more positive approach of telling Ofcom how it can be delivered, what it will cost, and how much the customer will have to pay, and then Ofcom should invite competitive quotes against the IDS/RM proposal.
Ispy
“ RM employees and non employees.
Can anyone here tell me why the USO is failing?
I don't expect a response from anyone not employed by RM. But give it your best shot.”
Failing to achieve USO requirements is either poor planning or management or a combination of both. We all know where the collection and delivery points are, there are multiple tools for working out optimise collection and delivery sequences and IDS/ RM has decades worth of data on how long this work takes. The inability to apply this knowledge is the problem.
On a more positive note, it is interesting to see that despite the significant fall in retail sales in October the online side of the equation held up reasonably well by growing slightly.
The biggest risk to the value of IDS shares at the moment appears to be the avarice of a competitor who wanted to cherry pick its way to profit growth by dragging service standards and employment conditions into the gutter. A true exponent of the type of parasitic capitalist greed that has plagued the U.K. since it was unleashed by Thatcherism.
JB and Sid, apologies, I miss read your posts I haven’t seen Seidenberg’s appointment to CEO of Royal Mail either.
JB the company announced Seidenberg’s appointment on 20th July, they announced Dr Pfaff as CEO GLS on 28 September.
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwiD-qemr8iCAxVcXUEAHcF0AloQFnoECBAQAQ&url=https%3A%2F%2Fgls-group.com%2FGROUP%2Fen%2FKarl%2520Pfaff%2520CEO%2520GLS%2520Group%2F&usg=AOvVaw30SdVhkb2hE7jAXVpfu7rJ&opi=89978449
The results show that they are in a mess as a Group. The plan going forward looks reasonable but is more about repair than growth. I don’t think a dividend payment is a good move, they should be investing everything they can to improve the value of company and our shares. Initial signs are that the market isn’t impressed.
Sid, the announcement of Seidenberg’s appointment as CEO of RM was made in July.
Oligarch, I’m surprised you were taken aback by Whistl’s statement. Their position on this issue has been transparent for years and will come as no surprise to the market in general. The massive weakness in their case is the size of financial damage they claim Royal Mail caused by proposing price increases (that were never implemented) for expensive to serve traffic dumped on it by would be cherry pickers. Their suggestion that it has been increasing at £50m per annum while letter volumes have declined will have people rolling in the aisles.
After seeing bank statements, ballot papers and all manner of other items dumped in parks, hedges and rivers around London by Whistl staff any involved member of Lloyds who is asked to testify would probably be committing perjury if they didn’t own up to being massively relieved at being able to bail on their relationship with Whistl/TNT.