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Post Office To Compete On Equal Terms

Comment 14th August 2010

One reason the Post Office is doing badly is that it cannot offer comptitive bulk deals to business customers the way that its private sector competitors do. It's rates are set by the regulator, its rate card published, and it sits there like a, er, sitting duck.

Second it cannot afford to modernise. It cannot borrow to do so. It's competitors can.

Thirs it's terms of business are defined by the regulator. Change is possible, but very difficult. Private business simply changes T&C on new contracts and offers existing customers enticements to sign up to the new T&Cs.

Want to change your delivery times, or targets for different mail types? Set a minimum charge for parcels? Offer personal delivery for big business, guaranteed so-many per day? Private business just does it. At best the Post Office takes 6 months to get regulator permission, at worst it gives up trying.

EITHER free the Post Office to compete on competitive terms,

OR free the Post Office from competition and having to balance its books.

Retain just these minimum rules

– at least one delivery per day to every front door in the UK, no matter how remote if they have post (and impose this on private letter carries too) 

– flat rate charge for letters and parcels across the entire UK for standard delivery

– standard delivery to be delivered in 2 days in 98% of cases

– standard delivery price to be set by the regulator (eg same as 2nd class now)

– daily collection from every letter box

And no others. No requirement for 1st class, recorded delivery, 2 deliveries a day, etc, etc. They might still do this, but it is not core, and they might charge competitive rates.

Why does this matter?

Unless the Post Office is allowed to compete on a level playing field it will curl up and die. It provides an essential core service, private business will cherry pick, disadvantaging the poor, the elderly and rural communities.

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