Rumours are circulating that the privatisation of the Royal Mail is to go ahead as early as October, with a government announcement imminent. With 71% of the Royal Mail postal workforce against the sell-off, and Labour labelling the move “dangerous” this is a heavily contested decision.
At E-Gistics we think it is important to consider the potential repercussions this move will have on the logistics industry for all: carriers, companies and customers.
While it has been suggested that the privatisation of Royal Mail will remove their monopoly in the mail service industry resulting in a more competitive market, is this really the case? The greatest customer concern about level of service comes from those residing in rural areas, who fear that either service will be halted or held ransom for increasing delivery charges. This is not a lucrative area for other private mailing companies, there are practicality issues to take into consideration as well as labouring costs; carrying across long distances will result in higher delivery charges too. If these areas are to be effected it doesn’t seem like there will be any competitors running to uptake the challenge.
Does this mean that traditional courier services like DHL and DPD will benefit from this upheaval, with users looking to more reliable and established methods? With developed tracking methods and dependable transit times, these are the offerings that the Royal Mail is aspiring to but is a few years behind with. This may be the time for non-postal carrier companies to strike.
The main business and consumer concerns revolve around the effect on service and the threat of increasing delivery costs. If indeed the Royal Mail IPO leads to a more competitive carrier market, then perhaps use of multiple carriers will be the best solution for businesses. Use of multiple carriers that have different benefits may see your business needs catered to on a more individual level. Smooth running service, dependable and established carriers combined with the most cost effective solutions.
It is clear that the injection of capital into the Royal Mail is essential and promising, we can all look to benefit from investment in modern delivery methods, but are the risks too great? With suggestions that the IPO may not perform as hoped, with a listing on the FTSE100 not a dead cert, is the economy “quick fix” the government hopes for just wishful thinking? Is it too big a risk to be taking with the Royal Mail?
Where do you stand on the privatisation of the Royal Mail? What are your main concerns? Share your opinions in the comments below.