Royal Mail seeks five-day service

[TrueBlueTerrier]

Royal Mail could be allowed to cut deliveries from six to five days a week following a review by the postal regulator into the need for a six-day service in a competitive mail market.

The state-owned postal operator was allowed to end second daily deliveries three years ago to help restore profitability.

Now Postcomm, as part of a sweeping review of the future of regulation, is considering reducing compulsory deliveries to every home and workplace to five days a week. The regulator is also sympathetic to a request from Royal Mail to limit this universal service obligation to stamped letters and packages.

Rest of story: http://www.ft.com/cms/s/5425941a-235e-1 ... 10621.html

[F0zziebear]

As part of my work last year we looked at all of these things. If we didn't deliver to every flat is that not social/economic discrimination? But then in Europe many more people live in flats and get their post from one central place?

Research suggests that people have more time at weekends to read mail, in fact Sunday's are the day when people have the most time, but no-one delivers on a Sunday. Then again decision makers want info before going shopping at the weekend. Is it worth having post delivered on Saturdays? For example RM does not deliver MS3 on a Saturday, is that not an infringement on the universal service obligation? Where does one draw the line? I reckon that the definition of the USO will be played around with in an attempt to cut costs. The reason is that most of the country (people density wise) is covered by a relatively small geographic region, and the rest costs huge amounts to cover, a bit similar to reasons for removing the second delivery, but with one delivery it is now delivered later on average.

No-one has the right answer on this, just opinions as we are entering new territory in this country.

F0zz

[Durden]

The rotating 5 day week spread over six days is a financial millstone around our neck.

Take away Saturday deliveries & RM would save a fortune. For every five duties we need a sixth person as a float but take out the Saturday & the float duty is no longer required. In my office we would lose 9 full time jobs overnight,imagine how many would go nationwide.

[Big Daz]

Durden

Thats almost indentical to my office with 10 floaters 9 FT and 1 AG

I think we should scrap sat deliveries and give the old timers early retirement.

My dad said to me the other week we should scrap sat deliveries, he said he wouldnt be fussed about not receiving any mail on a saturday.

All we need is a skeleton service perhaps on OT to do special deliveries and parcels/packets and collections/mail conveyance

[cruisey]

Yeah it's frightening. jobs galore could go if they get the regulator to agree to this. but would the people who would be left in the business see any of the money saved. NOT A CHANCE.
24 staff in my office work rest days on s/a, so it would bite hard on these people. Let's hope it's just hearsay

[F0zziebear]

As far as I'm aware no-one is calling for this either RM, the regulator or the competition. You are right that it would remove jobs and would therefore reduce the coswt per item for RM and make them more competitive.

As I've said before it's not in the interests of RM's competitors to drive RM into the ground. They need a strong good quality workforce to deliver large chunks of mail that they have won. The question is who is going to pay for this and how. Everyone is working behind the scenes on a model so it's not all bad news, just change. Change will continue for a good 10-20 yrs until the new liberalised market settles down, as it now has in the telecoms market with numerous buy-outs.

F0zz

[tpost]

There are plenty of people who want to leave Royal Mail and would take a redundancy payment

[Jimi]

I thought Postcomm were there to protect the customer and the postal market not put forward ideas that would beat Royal Mail's in the race to the bottom, what they should be doing is looking at increasing the services and holding our postal industry up as a example of what should be on offer, not devalue our industry and our workers to the point that it collapses. A “Rolls-Royce” universal service for the 21st Century not a Lada with one wheel missing.

[Durden]

There are plenty of people who want to leave Royal Mail and would take a redundancy payment

Count me in even though I'm too young at 39

[TrueBlueTerrier]

[quote="Jimi"]I thought Postcomm were there to protect the customer and the postal market not put forward ideas that would beat Royal Mail's in the race to the bottom, what they should be doing is looking at increasing the services and holding our postal industry up as a example of what should be on offer, not devalue our industry and our workers to the point that it collapses. A “Rolls-Royceâ€

[TheDoc]

I thought Postcomm were there to protect the customer...

As a customer of your service, I thought Postcomm existed to protect customer service also. Due to the type of work I do, I am invariably only home at weekends and therefore rely on a Saturday delivery so I can take any actions on that week's post before returning to the road on Monday.

Good luck on Friday lads and lasses, and keep a cool head.

[Carnoustie]

As far as I'm aware no-one is calling for this either RM, the regulator or the competition. You are right that it would remove jobs and would therefore reduce the coswt per item for RM and make them more competitive.

As I've said before it's not in the interests of RM's competitors to drive RM into the ground. They need a strong good quality workforce to deliver large chunks of mail that they have won. The question is who is going to pay for this and how. Everyone is working behind the scenes on a model so it's not all bad news, just change. Change will continue for a good 10-20 yrs until the new liberalised market settles down, as it now has in the telecoms market with numerous buy-outs.

F0zz

Fozzie, isn't there an opportunity for the Union and RM to have a "win/win" situation (where have I heard that phrase before ?) if we only have to deliver 5 days a week instead of 6 ? Anyone from outside the situation would conclude that RM could reduce the number of delivery staff by one-sixth but ...
What if the CWU said to RM that we will not oppose cuts in jobs caused by the reduction of the USO, so long as any redundancies are on VR terms, and the savings are used to keep the remaining staff on the same pay but with a reduction in the working week ? This would meet the union's aspirations of a shorter working week, whilst giving RM the reduction in workforce that a move to 5-day deliveries would demand.
Obviously, my suggestion could only work if Royal Mail are prepared to sit down and have meaningful negotiations with the CWU, the representatives of the people who generate the profits of this company. But in the current climate, it seems Leighton and Crozier's approach is to dictate to the union, not negotiate with them. How AL and AC have the nerve to say 'we listen to our people' is beyond me !!!

[TrueBlueTerrier]

I thought Postcomm were there to protect the customer...

As a customer of your service, I thought Postcomm existed to protect customer service also. Due to the type of work I do, I am invariably only home at weekends and therefore rely on a Saturday delivery so I can take any actions on that week's post before returning to the road on Monday.

Good luck on Friday lads and lasses, and keep a cool head.

Thanks for the support Doc.

[F0zziebear]

Fozzie, isn't there an opportunity for the Union and RM to have a "win/win" situation (where have I heard that phrase before ?) if we only have to deliver 5 days a week instead of 6 ? Anyone from outside the situation would conclude that RM could reduce the number of delivery staff by one-sixth but ...
What if the CWU said to RM that we will not oppose cuts in jobs caused by the reduction of the USO, so long as any redundancies are on VR terms, and the savings are used to keep the remaining staff on the same pay but with a reduction in the working week ? This would meet the union's aspirations of a shorter working week, whilst giving RM the reduction in workforce that a move to 5-day deliveries would demand.
Obviously, my suggestion could only work if Royal Mail are prepared to sit down and have meaningful negotiations with the CWU, the representatives of the people who generate the profits of this company. But in the current climate, it seems Leighton and Crozier's approach is to dictate to the union, not negotiate with them. How AL and AC have the nerve to say 'we listen to our people' is beyond me !!!

All redundancies are currently on VR terms, and my understanidng is that RM would have to seek permission from the government for compulsory redundancies. This isn't going to happen. Redundancies so far have been paid for by selling off real estate, and has cost the company hundreds of millions. We now have plenty of staff who are too expensive to give voluntary redundancy to.

Royal Mail have to pay back about £350m per year of the £3.5bn loan. I could be wrong on this so apologies. This means they need to find £350m per year, plus enough money to re-invest, plus giving money to the pension fund. As you can see RM need to be making in the region of plus £800m profit each year just to stay afloat. This is why the drastic cuts are needed. Having worked with Crozier he is not the type to pick a fight with the union and frontline workers unless he absolutely has to. It may not seem like this from where you are standing, but I can only talk from actually being in meetings with him and what he said in those meetings, which were top brass only affairs, me being the exception before anyone gets any ideas!

Basically they have made a pact with the devil. On the face of it they can now invest in new sorting machinery and compete on processing efficiency with TNT, UK Mail and DHL. They can also plug the pension deficit, but Satan has also insisted on massive savings each year. Personally I would put the blame on the treasury, but also on RM for agreeing such a thing without being prepared to resign.

The CWU need to somehow agree with RM to find £350m savings per year (maybe a bit of creative accountancy will help!) and agree to save face, or both parties go to the regulator and the government and say that the savings just cannot be found.

It's not the delivery postmen that have suddenly become less efficient or the mail centre workers, just that the mail centre workers have become relatively less efficient to brand new flat sorting machines and the latest and best letter sorting machines. Effectively the cost per unit of mail to Royal Mail has gone up. There is less money in the total pot as the main customers have saved millions of pounds. Volumes have not gone up to replace this lost revenue from the market place. Something has to give! It's simple economics. Either you put prices up, come up with new products that increase total volume/revenue, cut costs, or get bailed out by the government.

The best thing for the union and RM to do is get into bed together and realise that they are both fighting the government rather than each other. The government are getting away with this and I thought there were some clever guys at the top of RM who should have noticed this happening. Unfortunately they let people like me leave! Arrogant maybe but you have to believe in yourself.

Hope that answers your question?

F0zz

[Carnoustie]

Good post, which made some sense.

But... you say 'Redundancies so far have been paid for by selling off real estate, and has cost the company hundreds of millions. We now have plenty of staff who are too expensive to give voluntary redundancy to'

So are RM being economical with the truth when they give us these promises in WTLL sessions that there will be generous voluntary redundancy packages for those who wish to leave the business, if only the CWU would just play nice and accept this pay offer and all it's strings ?? Or are they saying that people who have many years of service would not be offered VR because of the cost to RM ? If you're saying VR would be offered by some criteria other than the 'Managing The Surplus Framework' agreement, isn't that again a direct challenge / provocation to the union ? An agreement is worthless if at some later date, Royal Mail arbitrarily ignore it ! If the union doesn't fight to ensure RM adhere to the wording of past agreements, then we might as well go and work for TNT or DHL, because our terms and conditions would get so severely eroded that we'd rapidly end up earning less their staff anyway

I have worked in other industries and seen money found for redundancy payments even when the company concerned has suffered a fall in profits. A calculation is made as to the one-off cost of the VR payments against the future wages and pension payments that will be saved, and a provision is made in the accounts and treated as an 'exceptional item' that hits the declared profit for that that particular year's results. Once the exceptional item has distorted (reduced) the declared profit, in subsequent years, the savings from not paying wages to the people that are no longer on the payroll flow through to profits and those up-front costs of VR are seen in hindsight as having been a good investment in the survival of the business !!