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Revealed: Why the Royal Mail is REALLY Making a Loss

Posted: 28/03/2012 08:58

You could say that the Post Office's days were numbered when some young boffin sent his or her very first email (presumably with the subject line: 'Test'). You could say that the nail in its coffin was the buzz of the very first text message - or at least the one sent from the CEO of Amazon to the CEO of Home Delivery Network asking them if they'd be up for fulfilling all its UK parcel orders.

You could say any of these things - but you'd be wrong. Oh yes. Because the Post Office's death knell was, in fact, sounded on the day that it introduced The Most Stupid Letter And Parcel Measuring System In Worldwide Postal System History.

I'm not quite sure what was going through the minds of the top bods at Royal Mail when they introduced this system, but it appeared to be: "You know what will keep our old-fashioned physical delivery company afloat in this age of digital communication and information transference? Making it more difficult to send things!"

Yes, instead of simplifying the UK postage system - making it ridiculously easy for any of us to pop a card/present/elephant in the post on a whim, for example - the Royal Mail decided to introduce a stupid, over-complicated method involving size, weight, thickness and aura (I may have made the last one up).

Is your letter thin enough to pass through the slot on this plastic thingummy the Post Office counter clerk is holding up? I don't know - let's ask them. Oh look, they don't know, either - they've got to try to pass it through the slot on their plastic thingummy! Is it heavy enough to be a packet? Is it too narrow to be a packet? Is it too large to be a letter yet too small to be a large letter but too light to be a parcel yet not wide enough to be a packet? Will it fit in a cat's mouth?

I don't know! And guess what? NEITHER DO THE COUNTER STAFF, 'COS THEY'VE GOT TO WEIGH IT AND MEASURE IT AND TRY TO PASS IT THROUGH THE HOLE IN THAT STUPID PLASTIC THINGUMMY!

Well done, Royal Mail. You could have been encouraging us all, young and old, to be writing more letters and sending more parcels simply by aiming to make the postal system in Britain the most user-friendly in the world.

But instead, you made it a chore. And now you say you're forced to increase the price of a first-class stamp because you're making such a massive loss.

Well, may I venture to suggest that one of the reasons you're making such a massive loss is because you've made it so massively complicated to post things? And may I venture to suggest that you possibly try to now make it easier for us all to send cards/presents/elephants to each other? I mean, I realise this might be trying to shut the stable door after the horse has bolted - but guess what? The horse has bolted because it's got to get to the post office during its lunch break to make sure its large letter fits through a slot on a stupid plastic thingummy. So stick that on your stamp and post it.

 

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You could say that the Post Office's days were numbered when some young boffin sent his or her very first email (presumably with the subject line: 'Test'). You could say that the nail in its coffin wa...
You could say that the Post Office's days were numbered when some young boffin sent his or her very first email (presumably with the subject line: 'Test'). You could say that the nail in its coffin wa...
 
 
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11:38 PM on 04/05/2012
she speaks the truth!
03:58 AM on 03/29/2012
The acid test will be next Christmas when I fear the world will fall out of Royal Mail's bottom. Sensible people will choose to e-mail their greating rather than spend more on postage than they do on the cards being delivered.
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02:31 PM on 03/28/2012
The Post Office has been purposely undermined by successive governments, both Labour and Conservative for years under instruction of the IMF and more recently the EU. Privatisation has always been greeted with fierce opposition by the general public, no matter their political persuasion but generally ignored by the politicians. Sure enough the Royal Mail have lost much business to email, other electronic forms of correspondence and inefficient private contractors who limit what they are willing to convey but even so the Royal Mail still carry something like 60 million packages per day. Their profits have reduced but then again when politicians try to sell the privatisation idea, they purposely neglect to inform people much of the profitable business has been dished out to private companies, leaving the post office with all the more expensive business, letters. Now the Conservatives have sorted out the pension problem, off loading it onto the British taxpayer, nothing stands in the way of them selling off a bit more of the family silver to more than likely, a foreign buyer. The whole business stinks, just as it does with all the other privatisations. You wait we will end up going from the most efficient postal service in the world to having one of the worse. Everything will end up owned by one foreign company creaming off the profits at our expense and treating their employees as no more that cheap labour.
12:45 PM on 03/28/2012
Great point, perfectly made. Very nice work.
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MissFrijole
My bite is worse than my bark.
12:23 PM on 03/28/2012
The U.S. Mail system isn't any better. We have to know the dimensions and weight of what we are sending, despite they offer flat rate boxes. The flat rate boxes themselves are in sizes that are not convenient from most things you want to send. Their "small" box is flat, wide and long, when I need a box that is more of a rectangular shape. I send small sculptures and they always arrive partially broken, no matter how well I pack it. A woman behind the counter actually caused me to drop a box with "FRAGILE" plastered all over it because instead of grabbing the top box, she reached for the middle on in the stack I was holding!
11:54 AM on 03/28/2012
Hi Andrea! You're absolutely right that the new system is totally nuts. But it's not true to say that this is the cause of Royal Mail's financial problems. Royal Mail has been disgustingly mismanaged by a series of lunatics who all have their eye on eventual privatisation and a way of offloading the pension fund. To get a flavour of what I mean, I strongly recommend reading 'Roy Mayall''s piece in the LRB. By way of example:

http://www.lrb.co.uk/v31/n18/roy-mayall/diary

Royal Mail has had service after service withdrawn from you and tendered out to private companies. The list of things it used to be able to offer are shocking. Hell, a cynic might even wonder if the management were out to prove the company wasn't profitable so it can more easily be privatised.

There is no reason on Earth why RM can't be profitable - especially in the age of internet shopping. But with idiots like Adam Crozier so intent on destroying it, it hasn't got a hope in hell.
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Andrea Mann
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10:08 PM on 03/28/2012
Hi David! Oh, I totally know that the system of postage isn't the cause of its problems - I am exaggerating for high-larious effect ;) - BUT I do think it's symptomatic of exactly what you say, ie. terrible mismanagement and bad decisions being made at top levels. How to survive in the digital age is something that so many businesses have had to address, of course - music, print media, film, etc etc - and the Royal Mail have managed their situation appallingly. Thanks for the LRB link - I shall check it out. :)
10:17 AM on 03/29/2012
Indeed. It's a sorry business from top to bottom :-(
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BelleL7
Life's too short for nonsense & drama ;-)
10:47 AM on 03/28/2012
BRILLIANT - Absolutely spot on and BRILLIANT!!!
10:27 AM on 03/28/2012
I have never had an Elephant sent to me.... I feel unloved....I realise now that there is a warehouse full of undelivered elephants..... poor things.... dam you Royal Mail!
10:23 AM on 03/28/2012
My local Postmaster (official title) now just says 'pop it on the scale' before he's even looked up! I went in for some cash and stood there like an idiot while he frowned at the weight of my debit card. I think eBay/Amazon/other online shopping experiences are available should carry the weight of these extra costs as they're the main reason anyone sends stuff these days and it's probably what's keeping the PO afloat.
10:18 AM on 03/28/2012
Having worked recently as a Royal Mail temp, I had no idea previously of the amount of work carried-out manually in their sorting offices. It is awesome!
10:17 AM on 03/28/2012
Obviously never tried posting a parcel in a post office in Delhi or Mumbai in India. Joking aside, the RM is an over-sized bureaucracy, and is inefficient even before these new measures. The rise of the electronic age has played a part for sure. However, thats not necessarily a bad thing. Its called creative destruction as Schumepeter coined. Should we go back to going into the bank instead of ATMS to withdraw money to preserve the status quo? Obviously not. Also there has been a proliferation in other companies offering the same services that RM do, only better, and at a competitive rate. I had a large delivery the other day from Fedex, I was not charged postage or delivery charges. However, competition is a good thing. Humans are forced to adapt, evolution forces animals to adapt,plants etc. Companys are no different, they too need to adapt, or perish. The fact that RM is loss making is a (positive) signal that they need to adapt. They need to take action. Loss making means they using up valuable resources that could be deployed more efficiently else where. If RM fail to fill the void, someone else will come in, or the existing delivery services will take up the share, for the simple reason, that they have learned how to send letters profitably. Customers are the ultimate form of democracy in the fortunes of a business. Customers vote with their feet.
02:42 PM on 03/28/2012
Royal Mail was always known as being the most efficient postal service in the world and to my knowledge nothing has changed, except for the amount of people willing to try and undermine it for ulterior motives i.e. personal gain. In business over a period of 18 years I sent our thousands of letters and other correspondence and to my knowledge only had one item go astray and even that turned up the next day. People use the excuse of not receiving post as an excuse to cover some form of inaction on their part, its so easy to do. I tried private mail with a couple of private companies but it was a complete and utter failure, I ended up going back to the Royal Mail and I can't see that changing unless the government ruin the company.
04:09 PM on 03/28/2012
Its hardly efficient when its making a loss and being subsidised by taxpayers. RM employs about 180 thousand people versus 280 thousand at Fedex, yet Fedex makes 3 or times the revenues, and those revenues result in much higher profits, rather than Rm losses. When you look at the numbers, the productivity and revenues and profits per person employed at each company you see that Fedex achieves much higher revenues. The RM it would seem would need to employ another 3 times the 176 thousand they employ to meet the same levels of productivity Fedex achieves going on productivity per person. Government privatisations are never true privitisations, hence the apparent failures. The government leases contracts out to private companies, but still pays those private companies with your tax money. True privatisation is when you the individual decides how to spend the money through your own choice.

An example of government quasi- privatisation that happens in the NHS, RM, trains goes like this. Lets say the government made cameras, cameras in the UK were in the public sector. They decide to privatise the camera business...the government would then go to Amazon (a private company) and buy the camera for me with my tax. Where as in the true freemarket, the middleman the government is not involved. I enter into a contract between Amazon and myself. I choose, not the government.
09:45 PM on 03/28/2012
most efficient, i don't think so.a mothers day card from my son in dorset took 8 days to get to cornwall.on the 9th day i had a card in the post from post office stating it was short on postage, extra postage & handling cost me £1.12. it then took them an extra 5 days to deliver it to my address which is only 1 mile from local sorting office, how's that for service.?
10:00 AM on 03/28/2012
True that.