Although the Royal Mail’s Chief Executive, Adam Crozier, insists that the service has improved recently, the regulator Postcomm has imposed fines of almost £20 million in the past two years because of the volume of lost, damaged or stolen mail. For many smaller firms, important post still does not arrive until mid-afternoon at best.
The added expense of guaranteed delivery charges to ensure that packages arrive early, minimum order values, and logistical problems caused by frequent industrial action, has left many of the FPB’s members doubting that the once iconic service can return to its previous heights.
The introduction of Pricing In Proportion (PIP) has been the last straw for some. Now, the price of sending a parcel depends not only on the weight of an item but also its size, length and thickness. A survey by the FPB in 2006 revealed that over 60% of respondents feared it would increase their costs. Our latest research shows that the majority in a survey believe that this and the other changes are increasing costs and time.
Rosemary Parr, of All About Pictures in Kings Lynn, recently tried to send an urgent package to a customer in London. She was taken aback by the sight that greeted her when she followed her husband and business partner, John, into the post office.
“He was holding the parcel and a tape measure and two women on the other side of the counter were holding onto the end of it,” she recalled. “They said it was two centimetres too long to send by guaranteed delivery. When I suggested we send it first class I was told that it could be sent back because it was too big. I blew a fuse.”
This story highlights how delays at one end can have a potentially disastrous knock-on effect right down the line. All About Pictures occasionally uses couriers to deliver larger items, but reckon they are being priced out by the bigger players who, according to Mrs Parr, prefer bulk contracts and do not offer the service to match their higher prices. City Link, which has introduced a minimum invoice charge of £50 per consignment (previously Mrs Parr’s rate with them was around £8), extended an urgent delivery to Belfast by 24 hours because it was re-routed through Dublin. Overcharging and subsequent difficulties in obtaining credit notes have left them seeking an alternative service, but expenditure remains an issue.
Many couriers are just too expensive and unreliable to be a viable option for businesses sending out smaller parcels infrequently. But those smaller companies that offer specialised services can provide better value for money.
Most of the bigger, next-day services have to work with Royal Mail, which still delivers packages to customers’ homes. However, smaller couriers like the Knutsford-based Sameday Plc take them directly from door to door.
“We step in at the higher-value end, when a critical package has to be delivered on a specific day and time. The risk of it not getting there is too high for a next-day service,” said managing director Tracy Hoather. “With many of the other operators the package could be handled by many employees in several locations and be transported in up to three vehicles. With us there is the added security that there is only one driver handling it.”
Smaller companies are also likely to be hit harder by postal strikes than their larger counterparts. Losing custom because goods are late, or the problems of cash flow created when cheques do not arrive on time, can have severe consequences. Mrs Hoather said that businesses like hers are on hand to resolve urgent issues such as cheques, passports and tenders. Often the expectation is too great for the larger companies to handle alone.
“The next-day companies have not got the staff in place to cope with this surge in demand,” she said. “So we can obtain business from the most urgent situations – which of course have an effect all the way through the network.”
Royal Mail’s online small business advice centre promises to: ‘take the bother out of bulk’, but the experience of the FPB’s members is that the changes so far have resulted in additional delays, confusion and expense for smaller businesses. This looks set to continue after the closure of many post offices that are vital to local communities. The process of rationalisation has, along with other factors such as industrial disputes, pushed the service into the hands of the larger operators. But the cloud’s silver lining is that it has, in turn, allowed smaller, specialist couriers to compete for a greater share of a pie worth over £7 billion a year, according to Postcomm.