What is this five day letter delivery?
International Distribution Services PLC, the parent company of Royal Mail, published its half year results on 17 November. As several news outlets have commented, the section that deals with Royal Mail contains an unwelcome proposal. See the last point in the proposal below.
Here is the section in the IDS results that relates to Royal Mail.
- Revenue 10.5% lower period-on-period. Due to management action, strike impact has been contained. Revenue flat vs. H1 2019-20 (pre-pandemic)
- Five point plan to stabilise the business already underway with a focus on rightsizing the business, tighter cash management and improving operational grip
- Successfully completed Delivering for the Future management change and agreed a new pay deal with Unite/CMA
- Talks with CWU continue although we are already moving ahead with required changes. Talks will cease if further industrial action goes ahead
- Ensuring future sustainability depends critically on urgent reform of the Universal Service.
- Government has been approached to seek an early move to five day letter delivery, whilst we continue to improve parcel services
Same-Day Dispatch
Just think about a company that sends out goods to customers via Royal Mail. Anything mailed on Friday will only arrive on Monday. Anything ready to send out on Saturday will sit at the Post Office and only go out on Monday.
Companies that offer same-day dispatch by First Class Royal Mail will continue to do so. But letters that are dispatched on a Friday will now not arrive the next day. For some companies, same-day dispatch is a selling point. If Government says yes to IDS, companies will lose the selling point. That is, they will lose if for one of the five days that they offer the service. That is 20%.
And if you were wondering, we send singles and two and threes of orders in in board-backed envelopes.
Something irked me when I read the sentence about the approach to the Government about a five day letter delivery. A thought arose, and then floated down as I thought about the consequences. Now I am thinking about the use of the passive voice in ‘Government has been approached’. With that wording it is as though the approach to Government happened without anyone. It is as though it happened without anyone, least of all IDS, doing anything volitionally. It just happened, much to everyone’s surprise and consternation. Except that is not what happened. IDS did the approaching, thinking of the shareholders and not of the service.
The Demise Of The GPO
Oh for the days when the GPO was state owned and did the lot. Remember that:
In 1969 the GPO was abolished and the assets transferred to The Post Office. It changed from being a Department of State to a statutory corporation.
As part of the Postal Services Act 2011, Post Office Limited became independent of Royal Mail Group. The two companies signed a ten-year agreement. It allowed post offices to continue issuing stamps and handling letters and parcels for Royal Mail. Then in 2013, Royal Mail became a public company in which anyone could own shares. Somehow those shares have aggregated in a few hands. Today, the biggest shareholder, Vesa Equity Investment, owns more than 20% of the company.
Five Day Letter Delivery
Some things, the postal service, water, public transport, energy generation, should be in public hands. The direction and interest of Public ownership is in service, not a five day letter delivery.