TNT Talk B****x

[POSTMAN]

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TNT Post UK is calling on Britain’s newly-designated postal regulator, Ofcom, to bring down barriers to fair competition in the British postal market.

In particular, the Dutch-owned postal operator wants to see an end to Royal Mail’s exemption on VAT for business mail services.

It says concerns about the danger of more competition on Royal Mail’s universal service obligation are unfounded – even with the growing threat of electronic substitution.

The company has released new research, commissioned from German postal consultancy WIK-Consult, reviewing fully liberalised postal markets in Germany, the Netherlands, Spain and Sweden.

The report found that those countries have seen much higher levels of competition than the UK, but there has been a postive impact on the incumbent postal service provider’s ability to deliver to all households in their territory in the last decade, because it has prompted modernisation and efficiency of postal services.

Generally, it said quality of services have improved with better routing times and longer opening hours, although it noted that in some cases regulators had to step in to prevent service disruptions. Such situations require “close regulatory surveillance”, particularly on the post office and public postal tariffs, it suggested.

Alex Dieke, head of WIK-Consult’s postal unit, said: “In the four countries studied in our report, we believe end-to-end competition has helped to achieve a sustainable universal service and, indeed, improve universal service quality, by putting pressure on incumbent operators to modernise.”

TNT Post UK said that zonal pricing for business mail – where prices are higher for Royal Mail to deliver to rural areas – will also help to ensure the survival of the universal service obligation.

Nick Wells, CEO of TNT Post UK, said of the research: “The report findings will help allay fears that competition will have a detrimental impact on the ability of Royal Mail to meet its obligation to deliver to every household in the UK.”

Competition

Although it has been open to postal competition since 2006, the UK has seen “hardly any” companies entering the postal market providing end-to-delivery services – less than a 1% market share – with Royal Mail still providing the last mile for “almost all” letters, the report noted.

But while some may think true end-to-end competition may endanger Royal Mail’s universal service, the researchers point to Germany, Sweden, the Netherlands and Spain as proof that competition can actually improve universal postal service.

Aside from Correos in Spain since the 2009 downturn, the postal operators have been profitable despite declining mail volumes, and have provided universal service products on “very successful” commercial terms, said the report.

But, partly because of the presence of competition in the end-to-end market, those postal operators have transformed to modernise and improve operational efficiency.

In Germany, where TNT Post is the biggest competitor to Deutsche Post, Deutsche Post restructured in the mid-1990s and has seen its employment in its mail segment remaining “relatively stable” in the past 10 years, despite a 5% drop in volumes, with competitors holding a 10% share of end-to-end delivery.

In the Netherlands, PostNL has lost 27% of mail volume since 2001, and since liberalisation in 2009, competitors now have a 17% market share, mostly in direct mail.

In Spain, competition existed in intra-city mail services long before the rest of the market was liberalised at the start of this year, with competitors holding a 12% market share.

In Sweden, where liberalisation took place as far back as 1993, Sweden Post’s competitors hold a 12% market share – which has remained “largely stable” in the last decade, the report said.

Legal powers to set up industry-contributed funds to support provision of universal services are in place in all of the studied countries, but aside from Spain, the report said none of the countries’ regulators have so far deemed it necessary to implement such arrangements because universal services are sufficient.

In Spain, expectations are that a fund could be established in the second half of 2011 to support universal services, with competitors providing up to 0.5% of their net revenues to fund it, while Correos also receives EUR 60m in state aid each year to support its heavy dependence on letter services.

Level playing field

In the UK, communications industry regulator Ofcom formally takes over responsibility to regulate the postal industry from October 1 – taking on the mantle from Postcomm in accordance with this summer’s Postal Services Act.

TNT Post, which describes itself as the largest private-sector postal operator in the UK, said it has long-held ambitions to launch a full end-to-end service to compete with Royal Mail.

But, the company said Royal Mail’s VAT exemption on business mail makes it “uncompetitive” for rivals to provide such a service, since major customers like financial and charity sectors cannot recover their VAT using private sector services.

TNT Post UK, which has its head office in Marlow, Buckinghamshire, called on Ofcom to ensure mailers in the UK have a “real choice” in the market.

Wells said: “We want a strong Royal Mail but it has to modernise to meet the needs of the market today and in the future and also be open to competitive forces that will ensure its future efficiency and prosperity.

“With Ofcom taking over regulation of the postal industry, we call upon on it to back our fight to get a level competitive playing field in the UK which will enable us to make the business case to invest millions in an end to end service as well as thousands of new jobs,” added the TNT Post UK chief executive.

[Night Tonic]

We'll assume the heading is your opinion rather than a statement of fact then shall we?

[POSTMAN]

We'll assume the heading is your opinion rather than a statement of fact then shall we?

Hello,where you been.

[TrueBlueTerrier]

We'll assume the heading is your opinion rather than a statement of fact then shall we?

Its a pretty accurate title or did you miss the 2 gaping holes in their paper. The report is all about the businesses and highlights how its helped them, but it has ignored the fact that competition in Europe has meant 3 posties from different companies delivering mail to the same addresses. Where the USO has been weakened and reduced, where posties are working on a freelance basis for 2 different companies at hourly rates lower than the minimum wage, or on piece rate. It has ignored that social mail is more expensive in the more liberalised markets, and that these companies have cherry picked the high volume and high value deliveries and left the rurals and low volume areas to the incumbent USO. It has not mentioned (well not explicitly) reduction in headcount (perhaps they think its more efficient) and predatory practices (such as sacking all FT and reintroducing PT contracts - this is ongoing), and reduction in both take home and hourly pay rates.

Buy hey if success is based on the bottom line then its a very accurate report, but if you think a report should highlight all the points both good and bad then to my mind - yes its a load of bollox.

[Straight4ward]

Good old TNT, always championing the cause of 'liberalised' postal markets.

Well, that is until it happens to be their home market.
Funny how they managed to drag their heels until April 2009, over 3 and a bit years after our arses were sold off to any spiv who could arrange collections.

(POSTMAN, can we have a f**k off TNT smiley?)

[feduppostie]

I say let them come and try and do what we do

we all know what would happen - they would realise they can't do it cheaper and go back to DSA where it is easy

so let em come and try to do what we do

hey cant and they wont

and nice to see ya NT where you been :-)

[somerset]

So TNT want to do an end to end delivery ? OKAY THEN! Carry on,That will confuse the public when they have to pay twice for a keepsafe or redirection ?

[POSTMAN]

Primitive,but does the job

[Straight4ward]

Cheers, POSTMAN!