Re: should we (the workers) have more say over the universal service obligation

[postslippete]

Seidenberg obviously picked out letter volumes when they were at a peak of 20 billion a year in 2004/5 and compared this with 7 billion in 2022/3. Letter volumes have halved since 2011 so it has taken RM 13 years. Why then is there a prediction that it will take just 5 years for letter volumes to then drop to 4 billion? RM typically increases the price of stamps annually but under the new proposals by Ofcom the price to send 2c letters will be pegged to inflation until at least 2029 so that postal services remain affordable.

[A2B]

I think there's a generational thing with letters as well, as the older population dies off so does a lot of our custom.

[postslippete]

As I've asked before how do you force a private company to offer a service which they no longer want to do?

Royal Mail is still accountable to Ofcom and its obligations have not changed since we became a private company. However, Ofcom is woefully inept at times. They couldn't find any evidence that RM's senior management had prioritised parcels over letters outside of the pandemic and industrial action! Would it have made any difference if they had? The fact that they fined RM for failing to meet delivery targets looked to be a step in the right direction but then they produce reports suggesting how much the company could save with universal service reform??

The paltry amounts of the fines for not meeting delivery targets for RM are now considered part of the cost of doing business. RM bosses have previously blamed covid, strike action, sickness and now they are saying that they are not making any money when parcel traffic have gone through the roof and everybody's workload has almost doubled due to delivering on bigger duties. We need to make RM more accountable but Ofcom seem largely unwilling to do it.

[Londonsburning]

The 'fine' Royal mail received was just a levy to continue the corruption of ripping off the public for a massively worse service than we used to provide for a higher price

[A2B]

OFCOM have no power over RM as it stands now let alone the RM we will see in 2025.

[Sean06]

OFCOM have no power over RM as it stands now let alone the RM we will see in 2025.

Not the answer on here many people would like but very true.

[postslippete]

Royal Mail's biggest threat to universal service has not come from the internet and e-mail but from regulation, its competitors and unfair competition. People will always receive credit cards, bills, statements, offers, mortgage details, pension and tax information through the post.

There has been no real enthusiasm from RM to deliver letters ever since downstream access (which is around 70% of the mail we deliver) which allows our competitors to collect and sort mail. These DSA providers are simply creaming our profits and none of them actually deliver the mail. When Whistl decided to start delivering letters in 2013, RM hated the fact that they were cherry picking the most profitable areas and introduced differential pricing to try and squeeze them out. This led to RM being fined a record £50 million by Ofcom for a serious breach of competition law in 2018 and this was only paid four years later in 2022 after a lengthy and unsuccessful appeal process in the Competition Appeal Tribunal, the Court of Appeal and even the Supreme courts.

People have commented that Ofcom have no powers over RM but this is not true. One of the reasons I believe that Ofcom have not fined RM too heavily last time round is because they want the company to maintain a universal service but are not prepared to allow the company retain any full monopoly. It is because of this that RM are desperate for USO reform. RM have had a business strategy of 'managing the decline' in letters for many years by consistently increasing the price of mail postage which in turn leads to less letters being delivered.

And it doesn’t just affect letters either. The competition in parcels is growing but most of our competitors have only concentrated their business in the profitable areas. They can keep their costs low by resourcing to a set workload and channel any surplus back to the universal service provider (Royal Mail) for onward delivery. Surely this is restricting our ability to rely on parcels growth to offset the impact of structural letter volume decline? Should there be instead an immediate cap on the competition so that we can secure the provision of the universal postal service?