Direct sellers are bracing themselves for possible postal strikes
this winter as the Communications Workers Union (CWU) vows to
fight the government’s plans to privatise Royal Mail.
The publication of a new report into the viability of Royal Mail
found that despite its recent modernisation efforts, it
“still lags well behind the leading postal
operators”. The report by Richard Hooper, former deputy
chairman of regulator Ofcom, concluded that urgent action should
be taken to accelerate the pace of modernisation. It called for a
cash injection into the postal operator either by means of a sale
or a flotation.
Business secretary Vince Cable said in a statement that the
government will act on the report’s recommendations, promising
new legislation within the next few weeks. It has already emerged
that employee ownership will be a significant part of the new
structure, with 10 percent of shares allocated for Royal Mail
workers. The Communication Workers Union slammed the share plan
claiming it is “deeply patronising” and says that
privatising Royal Mail would be “a disaster”. The
union says it “vows to fight the politically motivated move
by all means” and has received the backing of the Trades
Union Congress (TUC).
This vow could lead to postal strikes and disruption to
cataloguers and bulk mailers at their busiest period of the year.
Last year’s postal strikes caused widespread chaos in the direct
mail sector and cost businesses thousands of pounds. Gifts
business Nauticalia, for instance, switched from mailings to
inserts at a cost of £90,000 to avoid being caught up in the
mail backlog, whilst greetings-card business Flowercard saw a 20
percent drop in sales during the weeks affected by the
strikes.
A private matter
Royal Mail welcomed Hooper’s report. A spokesperson says it
“clearly demonstrates that to keep delivering the universal
service [one price goes anywhere promise], Royal Mail needs a way
of getting access to capital, a resolution of the legacy
£10.3 billion pension deficit and a strikingly different
regulatory approach which allows us to compete fairly in an
increasingly tough and shrinking market.”
Graham Cooper of postal consultancy Onepost, also welcomes the
proposal of relieving Royal Mail of its pension deficit, adding
that doing nothing to reduce the deficit will be a barrier to any
private investment. However, he is mindful of potential
industrial action by the CWU and the long-term damage it could
cause to the mailing industry: “think of falling revenues
and organisations that move away from using mail, possibly
forever,” he says.
Most of the direct retailers contacted by Catalogue
e-business were hesitant to make a public comment. For Wayne
Lysaght-Mason, managing director of IronmongeryDirect, a careful
balance must be struck between cost-cutting and customer
service-something that affects every business: “We don’t
know who the winning bidder will be for Royal Mail, let’s hope
they value customer service”. N Brown Group’s group
development director Paul Kendrick is reticent to comment, but
says that the multititle cataloguer has a plan for everything and
would “manage” should the union call a national
strike. Hilary Andrews of men’s grooming website Mankind, says
she is worried about the CWU’s declaration to fight the plans and
that any strike action is “very bad news” for online
and direct mail businesses. Another cataloguer, who wishes to
remain anonymous, says he is waiting to hear exactly what the
government has planned, but is worried that privatisation could
lead to those living in rural areas receiving a second-rate, or
more expensive, postal service due to the elimination of the
universal service promise.
Share