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RM proposes every other day 2nd-class delivery

Greeting card industry’s voice heard loud and clear on Royal Mail issues in mainstream media

 

The greeting card industry, largely through the GCA, has been a prominent voice in the mainstream media over the last few days very effectively pushing for a reliable and affordable postal service following watchdog Ofcom’s review for The Future Of The Postal Service.  

The GCA’s sustained and tenacious campaigning came good with coverage across national and regional newspapers, online news sites and radio stations sharing the industry association’s valid arguments.

Coverage reached new heights yesterday, 4 April, following the unveiling of Royal Mail’s new submission to Ofcom planning to cut second-class delivery to every day in a bid to cut costs while adding that it would keep the current six-day-a-week service for first-class letters – an improvement on previously-mooted plans to have all Saturday deliveries scrapped.

Above: Ofcom’s review has sparked significant media coverage
Above: Ofcom’s review has sparked significant media coverage

Royal Mail’s new proposal to Ofcom also included how the lucrative parcels side would still keep a seven-day service, with bulk business mail having a three-day time slot instead of two.

The plan was revealed after the GCA submitted an industry response to Ofcom’s consultation on Tuesday, 2 April, the same day stamp prices rose for the fourth time in two years, to £1.35 for first class, and with the jump to 85p for second class meaning it now costs the same as first class did two years ago – delivering an estimated £100m increase in income for Royal Mail.

The GCA had given a detailed 25-page analysis of Ofcom’s reaction to Royal Mail’s claim that the legally-binding universal service obligation (uso), where it must deliver letters across the UK six days a week for the same price, is too onerous to continue its current form.

The association expressed the view that the case against the current uso has not been proven, and the submission stated: “We believe the proposal of simultaneous significant price rises and service reductions will just unnecessarily accelerate British postal decline, trapping the country in a doom-spiral of increasingly-frequent requests for further bailouts or reviews.”

Above & top: GCA ceo Amanda Fergusson has been making the rounds of the media this week
Above & top: GCA ceo Amanda Fergusson has been making the rounds of the media this week

Sterling work by GCA pr agency Arena PR ensured the story was plastered across the media, including The Guardian, The Sun, The Independent, ITV, The Times, BBC, Sky News, Daily Mail, Daily Express, and regional newspapers, while association ceo Amanda Fergusson has been interviewed on a number of radio stations, such as LBC, BBC Radio 5 Live, and BBC Radio Leicester.

Amanda told PG Buzz: “This issue has brought our industry together; it’s been great to have so much input and support from members as we raise our concerns to Royal Mail, Ofcom and the government.

“It’s an important time for our voice to be heard – our industry needs an affordable, reliable and regular postal service. The GCA’s response to Ofcom is clear, we are concerned that more price rises and service reductions will accelerate a decline in the British postal service. Also there are no underpinned service recovery plans or evidence of meaningful progress to restore the Royal Mail service to legally-required levels.”

Royal Mail claims its latest plans would save it up to £300m each year, and admits there would be job losses but predicts “fewer than 1,000” voluntary redundancies would result with no compulsory cuts.

It also says the moves to ease the uso would not need a change in legislation as it would still meet the six-day delivery criteria with first-class letters, although it has not revealed a price for the service – and wants Ofcom to implement the changes within a year.

Above: The Daily Express flagged the issue on its front page as well as in its leader column
Above: The Daily Express flagged the issue on its front page as well as in its leader column

However, vociferous complaints about late deliveries indicate that won’t go down well with the public, as this Facebook post from Wednesday attests: “It has taken Royal Mail nine days to deliver a birthday card – with a first class stamp – from our son and grandson in Essex to my husband in Bedfordshire.

“It was correctly and clearly addressed with postcode, bearing the right postage, so I am stumped as to why it has taken so long.

“What on earth is the point of us splashing out on cards and very expensive first-class stamps if they can’t deliver them in anything like the time they advertise?”

And David Byk, ceo at Ling Design and GBCC and one of the GCA council members heavily involved in the submission to Ofcom, followed up with his personal view of Royal Mail’s new proposals: “It shows how inefficient and unbelievable they are if they say these reforms are only going to take out 1,000 workers. The Communication Workers’ Union can’t believe this, nor can the share price.

“They’re suggesting stopping second-class deliveries on a Saturday, reducing second class to only two times per week, not disclosing cost of first class so possibly putting it beyond everyone’s means so reducing demand for letters and effectively considering them as parcels, only having letters delivered when there’s more than one to go to each house so urgent post may never arrive,

“And they’re showing they don’t care about mothers by killing Mother’s Day and the greeting card industry.

Above: Complaints like this one show the public are not convinced by Royal Mail’s promises
Above: Complaints like this one show the public are not convinced by Royal Mail’s promises

“Without regulatory scrutiny on pricing whatever they say today can be disregarded as they push more increases through anyway on first class till it hits the price of parcels.

“Surely you will lose more than 1,000 of our hard-working posties with these enormous changes although, based on their current awful productivity failings, maybe they won’t – I don’t believe them.”

Online greeting card marketplace Thortful also responded to Ofcom’s consultation and, following Royal Mail’s updated proposals, ceo Pip Heywood commented: “We were pleased to hear that first-class days and speed would be protected under the RM proposal but remain concerned about the lack of certainty of next-day prices long term.

“We have heard and seen worrying price brackets for next-day letters delivery in the Ofcom modelling and in discussion with the Royal Mail – we have to be realistic about what customers are prepared to pay for delivery of a low-cost, high emotional-value item.

“We worry there is a false or outdated sense of price elasticity between the Royal Mail and Ofcom and contradictory research findings aren’t helping clarify the issue.

“I’m sure many GCA members are very concerned with the second class proposal – we know a key need for card sending is surety on when it will arrive. If Ofcom does accept Royal Mail’s proposal here, we will need an acute customer education programme and even more scrutiny on RM’s reliability and quality of service to ensure consumer confidence isn’t further eroded.”

“Ultimately, we need Ofcom guidance on whether the non-legislative proposals are sufficient or kicking the ball on to the next round of cuts.  We’d also welcome the Citizens Advice and CWU perspective to help inform us to ensure we’re adequately protecting consumers and our highly-valued posties.

Above: Either no delivery or all second-class letters at once is Royal Mail’s plan
Above: Either no delivery or all second-class letters at once is Royal Mail’s plan

“If we take a look at the proposals requiring legislative reform, we’d welcome regular net cost calculation as it’s essential to have transparency of costs. I am very worried about giving Ofcom greater flexibility to change the uso via regulatory change – I think legislative scrutiny will be key to protecting the consumer and small businesses like ours.

“The subject of government subsidy is incredibly tough to swallow after the profiteering from privatisation. Most businesses manage a category decline through innovation, business transformation and diversification, and the price paid for the Royal Mail reflected its ongoing uso commitment.  “

Royal Mail stated: “The proposal is designed to create a more financially stable future for the business and its shareholders, protecting tens of thousands of jobs and the best terms and conditions in the industry.

“It closely aligns to changes successfully made in comparable countries in Europe and around the world over recent years, with limited changes for customers.”

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