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a better article
Posted by 'kudos' on 22 Oct 2009 @ 18:07

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kudosJoined: September 2004
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.....that gives an outsiders view, not sure of the source taking from one of the newssites, better spelling than mine

"Royal Mail is facing one of its biggest crises yet as profit-driven management seek to slash costs at the expense of service levels and ordinary frontline staff
Millions of letters and parcels, particularly in the London area, have heaped up as a result of a series of postal strikes and industrial actions over the past several months, causing considerable anguish to mail users and post office staff alike.
The media and Royal Mail management consistently refuse to address the real cause of the dispute, which is the fact that Royal Mail’s budget gets cut by about 10 percent every year, which forces each office to make cuts or savings of that figure each year as well.
The reason for the cuts has been the so-called privatisation drive first mooted by the Conservative Party and endorsed by the Labour Party. The Government expressed its desire as late as last year to privatise the post office and only backed down because of threats from the trade unions which fund that party.
To make RM “acceptable” for privatisation means making it profitable. There is, however, an important problem in this regard. Royal Mail works under what is known as the “Universal Service Obligation.”
This means that Royal Mail’s charter obliges it to collect and deliver mail anywhere in Britain from the Cornish coast to the Scottish highlands for the same price.
It is obvious that this service could only be profitable in major centres where mail volumes are of such a nature that it is viable. The cost of delivering a letter to the Hebrides, for example, is therefore cross-subsidised by revenues generated in the major centres.
In other words, the geographic distribution of the bulk of Royal Mail’s customers mean that large amounts of the service can never be run on a profit basis, as the cost of delivery would simply be too high.
This fact has always been at the heart of Royal Mail’s service since it was instituted in 1840 — service to the public before profit.
Ignoring that basic reality, the new management at Royal Mail were tasked by the Labour Government with making a profit so that it would be attractive to outside buyers.
This has led to the appointment to senior management of people with no experience whatsoever in the ethos or culture of Royal Mail. This is personified by the chief executive, Adam Crozier.
Mr Crozier, who had never set foot inside a Royal Mail depot before becoming boss of that organisation, earns Ł3 million a year as a reward for shrinking the workforce by 45,000 and closing 4,600 post offices — with another 2,500 to follow.
Ironically, despite Mr Crozier’s ‘efforts’ at profitability, Royal Mail, which had made a profit of Ł537 million in 2004/5, ran at a loss of Ł279 million in 2007.
It is little wonder that competition for Royal Mail is continually on the rise. In the name of the “free market” the Tory and Labour regimes have allowed foreign post offices to set up companies in Britain to cherry pick the most profitable sections of the service network. This has resulted in decreased revenue for Royal Mail.
It is not widely known, for example, that delivery service TNT is owned and run by the Dutch post office, and DHL is owned and run by the German post office.
Would Royal Mail be allowed to compete head to head with the Dutch post office for Holland’s most viable mail delivery routes? Would Royal Mail be allowed to compete head to head with the German post office for mail delivery in Berlin or Cologne? Unlikely — yet in madhouse Tory/Labour Britain, this is precisely the problem facing Royal Mail.
To make matters worse — and this beggars belief — the Government has authorised major state institutions (such as local authority council tax bills and other state services) to contract directly with these competitors — who then merely feed the mail back into the Royal Mail delivery system under a scheme called “Downstream Access.”
The most scandalous part of “Downstream Access” is that these private companies can now set demands on Royal Mail for delivery prices, meaning that, for example, council tax bills are delivered for 13 pence per letter. If Royal Mail refuses to deliver at these prices, they “lose the contract” under the “free market system.”
This has the end effect of volume increasing, but revenue decreasing. And Mr Crozier and his management team still wonder why the losses are increasing?
What then are the conditions under which a front line postman works? In a nutshell: increased hours, pay cuts, heavier workloads — all in the name of a drive to profitability, no matter how that affects service.
Ironically, it is these very measures which are affecting usage levels of Royal Mail services.
As management demands more and more from employees by paying them less and less, so service levels drop. As service levels drop, customers are forced to resort to other delivery methods — and so the downward spiral continues, encouraged and supported by the drive to privatisation.
Previously, when a postman finished his delivery early, he would return to the office and sort mail until his shift ended and then go home, having done a full day’s productive work.
If, due to circumstances beyond his control, he finished his delivery late, he would be paid overtime, as per the industry norm.
In the interests of cutting this overtime budget, the new Royal Mail management invented something called “job and finish.”
This entailed letting a postman go home as soon as his delivery round was finished. This seemingly attractive offer had a downside: if the postman was delayed and finished late, there was no overtime pay.
The scheme saved Royal Mail a substantial amount in overtime and postmen got to go home early on quiet days. This worked well until the next policy revision: Royal Mail stopped taking on full-time postmen.
Every time a full timer left the service, he would be replaced by a part timer on a limited hour contract.
The effect of this was that the remaining full-time postmen had to ‘absorb’ (as the terminology went) the workload of the ‘missing’ postmen. This inevitably led to an ever-increasing workload for the remaining staff, with the inevitable decline in service. Today, the full-time to part-time ratio of most delivery office staff is 50/50.
Incredibly, if, as has happened, some postmen object to the massively increased workload, he is then told to “job and finish” — in other words, to “make up the time on quiet days.” Due to the increased workload, there are no longer ‘quiet days’.
The pension fund has also been stripped out. The chairman of Royal Mail, Donald Bryden, who started off with a salary of Ł200,000 per year, has said that if the corporation’s deficit continues to be so high, the pension fund will close.
The assets of the current pension scheme are valued at over Ł25 billion, however, and would make a nice addition to Government coffers to help fill out their expenditure black hole.
There is only one solution to the Royal Mail crisis: a return to the Universal Service Obligation in all its facets before the madness of the Tory and Labour regimes destroy the operating ethos of this very first of modern postal services in the world"

Message Thread:

Royal Mail situation - what do people think ? by 'DavyBoy' (21 Oct 2009 @ 10:11)

Re: Royal Mail situation - what do people think ? by 'QuickOldTimer' (21 Oct 2009 @ 10:47)

Re: Royal Mail situation - what do people think ? by 'davidmc' (21 Oct 2009 @ 10:55)

Re: Royal Mail situation - what do people think ? by 'QuickOldTimer' (21 Oct 2009 @ 11:04)

Re: Royal Mail situation - what do people think ? by 'DavyBoy' (21 Oct 2009 @ 11:07)

Re: Royal Mail situation - what do people think ? by 'QuickOldTimer' (21 Oct 2009 @ 11:33)

Re: Royal Mail situation - what do people think ? by 'DavyBoy' (21 Oct 2009 @ 11:42)

Re: Royal Mail situation - what do people think ? by 'QuickOldTimer' (21 Oct 2009 @ 11:46)

Re: Royal Mail situation - what do people think ? by 'DavyBoy' (21 Oct 2009 @ 11:58)

Re: Royal Mail situation - what do people think ? by 'davidmc' (21 Oct 2009 @ 10:52)

Re: Royal Mail situation - what do people think ? by 'QuickOldTimer' (21 Oct 2009 @ 11:43)

Re: Royal Mail situation - what do people think ? by 'Chris34' (21 Oct 2009 @ 11:12)

Re: Royal Mail situation - what do people think ? by 'kai' (21 Oct 2009 @ 11:13)

Re: Royal Mail situation - what do people think ? by 'DavyBoy' (21 Oct 2009 @ 11:46)

Re: Royal Mail situation - what do people think ? by 'MattScott' (21 Oct 2009 @ 15:07)

Re: Royal Mail situation - what do people think ? by 'QuickOldTimer' (21 Oct 2009 @ 15:33)

Re: Royal Mail situation - what do people think ? by 'MattScott' (21 Oct 2009 @ 15:57)

Re: Royal Mail situation - what do people think ? by 'DavyBoy' (21 Oct 2009 @ 17:00)

Re: Royal Mail situation - what do people think ? by 'QuickOldTimer' (21 Oct 2009 @ 19:08)

Re: Royal Mail situation - what do people think ? by 'DBaldwin' (21 Oct 2009 @ 21:26)

Re: Royal Mail situation - what do people think ? by 'kudos' (21 Oct 2009 @ 23:54)

Out of interest.,..... by 'itpro' (22 Oct 2009 @ 1:39)

Kudos you're exactly the problem ! by 'DavyBoy' (22 Oct 2009 @ 8:18)

DavyBoy by 'MattScott' (22 Oct 2009 @ 12:26)

Re: DavyBoy by 'QuickOldTimer' (22 Oct 2009 @ 12:42)

Re: DavyBoy by 'DavyBoy' (22 Oct 2009 @ 13:15)

Re: DavyBoy by 'QuickOldTimer' (22 Oct 2009 @ 13:53)

Re: DavyBoy by 'DavyBoy' (22 Oct 2009 @ 14:20)

Re: DavyBoy by 'QuickOldTimer' (22 Oct 2009 @ 15:40)

Re: DavyBoy by 'buzzinrussell' (22 Oct 2009 @ 17:58)

Re: DavyBoy by 'itpro' (22 Oct 2009 @ 20:00)

Re: DavyBoy by 'QuickOldTimer' (22 Oct 2009 @ 20:37)

Re: DavyBoy by 'davidmc' (22 Oct 2009 @ 23:51)

Oh.... no you don't, QOT! by 'itpro' (23 Oct 2009 @ 0:39)

Re: Oh.... no you don't, QOT! by 'kudos' (23 Oct 2009 @ 0:49)

Kudos by 'itpro' (23 Oct 2009 @ 1:08)

Re: Kudos by 'kudos' (23 Oct 2009 @ 22:44)

Re: Kudos by 'DavyBoy' (24 Oct 2009 @ 9:32)

Here we go again... by 'DavyBoy' (29 Oct 2009 @ 11:50)

Re: Here we go again... by 'Chris34' (29 Oct 2009 @ 13:40)

Re: Here we go again... by 'DavyBoy' (29 Oct 2009 @ 15:46)

a better article by 'kudos' << You are here!

why we need unions by 'NickyW' (22 Oct 2009 @ 20:26)

Re: why we need unions by 'MattScott' (22 Oct 2009 @ 20:41)

Re: why we need unions by 'rpatrese' (22 Oct 2009 @ 21:14)

Re: why we need unions by 'kudos' (22 Oct 2009 @ 21:29)

Why you two are talking ball locks by 'DavyBoy' (22 Oct 2009 @ 21:14)

Re: Why you two are talking ball locks by 'kudos' (22 Oct 2009 @ 21:31)

Re: Why you two are talking ball locks by 'DavyBoy' (22 Oct 2009 @ 21:42)

Re: Why you two are talking ball locks by 'kudos' (22 Oct 2009 @ 21:58)

Re: Why you two are talking ball locks by 'rotaxmxr' (22 Oct 2009 @ 22:21)

decent money for a paper round by 'RobF1' (02 Nov 2009 @ 21:23)

Re: Why you two are talking ball locks by 'NickyW' (22 Oct 2009 @ 22:19)

Re: Why you two are talking ball locks by 'NickyW' (22 Oct 2009 @ 22:47)

Re: Why you two are talking ball locks by 'DavyBoy' (23 Oct 2009 @ 9:36)

Re: why we need unions by 'davidmc' (23 Oct 2009 @ 0:10)

Give me a bag and ill go and post some letters! by 'ChrisAdams' (23 Oct 2009 @ 1:34)

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