Alex Singleton says that this is good news:
The Royal Mail will lose its monopoly on delivering Britain’s letters on Jan. 1, an industry regulator announced Friday – 15 months earlier than originally planned.
Regulator Postcomm said that from the beginning of 2006 private companies will be able to bid for licenses to deliver letters, previously the sole preserve of the state-backed Royal Mail Group PLC.
Postcomm chairman Nigel Stapleton said more competition would create “a more innovative and efficient postal industry.”
“This is only the first step in a process which the commission hopes will eventually see market forces replace regulation as the main driver of an efficient and effective mail industry,” he said.
Bulk mail delivery is already open to competition, but domestic letter services are the exclusive domain of the Royal Mail.
I agree. I have no problem with the principle that postal services ought to be competitive rather than monopolistic, and most of the arguments I hear which allegedly defend that monopoly strike me as misguided. For instance, I have never understood why sending a letter to people living at the far end of beyond in the deep, deep countryside, should cost no more than sending a letter from a dweller in a city to another dweller in the same city. If a competitive postal delivery service wants to have a one-price-fits-all policy, as many do, for simplicity’s sake, fine. If it wants to deliver non-urgent packages sent by me to someone half a mile from me by sending them to Birmingham and back, again: their problem (and their solution) rather than mine. But if other postal services want to ‘skim’, that is, do only easy deliveries (and maybe do them really, really quickly), and thereby force a little product differentiation into this market, well, again, why not? Making a bicycle is easier and cheaper than making a luxury car, and bikes accordingly change hands for far less. Where is the problem with that? Why should both cost the same?
Add all the obvious advantages associated with competitors competing with each other to establish reputations for reliable, efficient and really clever service, and you get a compelling case for a free market.
There is also the point, which I was only reminded of when deciding whether to label this as being about “globalization”, that postal services these days cry out to be global, rather than merely national with global stuff treated as a bolted-on afterthought.
However, I believe that I do see one problem with this particular exercise in demonopolisation. I recall a few years ago getting one of those cards through my letter box, saying that some non-governmental, acronymic, postal delivery service had tried, but failed, to deliver to me a package. There was a phone number on the card, and although I did not feel in any way obliged to, I did ring it.
I was told that I would have to make my way to Battersea to collect the package.
Excuse me, I said. You have promised someone else that you will deliver a package to me, and I am somehow obligated to go to Battersea to collect it? Who is it from? I mean, if it sounds good, I might come and get it. Oh, no, they said, we could not possibly reveal that over the phone. Well then forget it, I said. You can try to redeliver the thing, if you want to, but I do not promise to be in when you call again. Or, you can tell the person who gave you the package that you have failed to deliver it, and it will then be between you and them.
They were amazed. Such insubordination from non-customers was apparently unheard of.
(I think I may have told this story here before. If I have then my apologies to all those irritated by the repetition.)
The problem here is that final bit of the journey, people’s front doors. As more and more people go out to work, and at more and more unpredictable hours, fewer and fewer households can conveniently guarantee to have anyone present all the time to receive incoming clobber.
Is the answer to give every postal service that wants it a key to the front door of my block of flats, and of every other block of flats in Britain, such as the monopoly Royal Mail now seems to have? Somehow, I think that might be a bad idea.
But meanwhile, does the Royal Mail retain its privileged ability to open the front door that I share with my neighbours? There is a lot to be said for someone having this right.
This is one of the big reasons why ‘offices’ still exist. An ‘office’ is a place that is, among other things, sort of definitely, going to be open from 9 to 5, to receive incoming stuff. And phone calls, and visitors of all kinds.
Maybe the answer for incoming mail is to have an ‘office’ which specialises not in fronting for all the work done by a particular business, but which instead specialises in receiving incoming clobber for lots of businesses, and more especially for lots of people, people who live near enough to be able to drop round whenever anything shows up for them. What might such places be called? ‘Post offices’ perhaps? Maybe the combined urges of the newly liberated private sector in postal delivery will come together to create such places.
But what if some people are unable to make even this small journey? This is where privileged access to front doors might still be a good thing. But, I suppose I give privileged access to my bank card details to Amazon (and to many other enterprises) such as I would not give to just anyone. (And with regard to Amazon, see also the afterthought about globalization, above.)
Maybe the Royal Mail will decide to specialise in being the universally trusted British deliverer of last resort, so to speak, trusted to open shared front doors, and achieve final delivery of all mail, both its own stuff and everyone else’s, should the need arise.
The problem with that being that during the last few years, and this is one of the more depressing things to have happened to Britain during the last few years, the Royal Mail has become, in many areas and in many ways, seriously unreliable. The worry must be that if this demonopolisation goes ahead, the Royal Mail’s descent into criminality and chaos will become vertiginous, before the private sector has learned to sort out all the problems which the Royal Mail used to solve, re front doors and re everything else.
By the way, let no one claim that in the age of email, internets, blah blah blah, that postal services no longer really matter. Why, that most modern and internet-blah-blah-blah-based business, Amazon, depends for its very existence on efficient postal services to deliver the stuff you have ordered by such modern means.
Well, I dare say the private sector will solve this and similar problems if it sincerely wants to, which I think it will. One should never regard one’s own failure to solve a problem in twenty minutes as proof that capitalism will never solve the problem ever.
In particular, there are no doubt places beyond Britain where they faced all such problems and solved them decades ago, perhaps because their version of the Royal Mail has been run by corrupt thieves from the start, and they have always had a free market in postal delivery.
Nevertheless, I do foresee some, let us say, transitional difficulties, with this particular exercise in demonopolisation.
To generalise, the move out of politics and towards commerce is a political process as well as a commercial process, and we all know that political processes can go very wrong.
Or, in other words, see also this hockey stick posting.. This explains that the current decline in the quality of service offered by the Royal Mail was probably a precondition for the decision to demonopolise postal delivery in the first place.
> Is the answer to give every postal service that wants it a key to the front door of my block of flats
No. I once ordered some CDs from amazon for my (then) girlfriend (now fiance). Deutsche Post delivered them to the front door of her apartment while she was out at work, from whence somebody else in the house stole them.
When I complained to Deutsche Post they said I had no contract with them and amazon should complain. Fair enough. So I spoke to amazon, and they just sent some more CDs – cheaper for them, presumably, than kicking up a fuss with the post office.
Amazon realise, I assume, that delivering to people who aren’t at home is a key weakness in their business model and they need to bend over backwards to keep people happy if anything goes wrong with it. It worked in this case – I was most impressed.
There was probably a time when government subsidized, inexpensive mail was much more important than it is now. When cross-country travel was difficult and there were no better ways to communicate, having a reliable mail service was extremely important and probably too expensive to be privatised.
That probably hasn’t been the case for quite a while. With telephones, email, easy travel, etc… as alternatives, mail is no longer the only way to communicate and advances in technology have made mail delivery inherently cheaper. So it’s high time that mail delivery be privatized.
In the US package shipping has been private for a while, now, and the USPS still gets some business. As far as letters and such go, I wouldn’t mind paying more as I rarely send one and when I do, it’s usually a special occasion, so paying more than $0.34 (or whatever it is these days) wouldn’t bother me.
Unfortunately for package delivery, I usually have ordered whatever package is being delivered and want to get it, so a shipping company holding it hostage has an advantage, though most places in the US will leave packages outside your door. Though that doesn’t work as well for apartment complexes with secure entry.
An apartment complex I lived in would receive packages at the office, which works if there is a staffed office.
Also, the US has seen a spread of private post offices which handle multiple delivery companies, mail drop boxes, packing, and other related services. I suspect you will see a similar trend.
Bolie IV
Indeed, private post offices are quite common in the US. Mail Boxes, Etc (recently bought out by UPS) is one of the bigger chains of them. Other businesses, like Kinko’s copy-shops also do this as a side business.
It’s not perfect, mostly due to the resistance of the USPS, but it works well enough. When I lived in an apartment with no office, I had a private mailbox at one of these, and had all of my online purchaces sent there. They give the customers the key to the store, so you can get your mail when they are closed, and the more astute ones have package lockers for larger deliveries.
The answer is probably to seperate storage from carriage. Carriage providers could partner with a mail-drop company which has many local branches. These then would act like the “postal sorting office” you have to go to if you miss a parcel. I suspect that a privatized Royal Mail could sell this service to other companies as a way to make their many rural post offices useful.
IMO a lot of the delivery services there are right now, are spoiled rotten by the postal monopoly. Their prices are high and their attitude is snooty because competition is very weak, and because they are competing over speed and traceability, not convenience to the recipient. Letters will probably be quite a shock to them.
I think you may be misreading what is being offered. They will be accepting bids ….
I read that as the Royal P.O. is going to subcontract out the monopoly to an outside vendor. Worst of both worlds.
It really, really annoys me that because I happen to live in a Town rather than a City, when I get home and find a Post Office card on my mat from a failed delivery in the morning, I have to wait until 7am the following morning to visit the sorting office because it isn’t actually open at any times that are convenient to those of us who make up their customer base.
I’m on first name terms with the staff there as I do a lot of eBay & Amazon buying. I find them very helpful and obliging individuals. Not much use after 1pm though when the gates are shut (or 10am on Saturdays).
Parcelforce are another basket case- their whole system revolves around keeping stuff on the van to attempt to deliver again on the following weekday- a business model that has to lead to a 95% repeat failure for everyone not actually out at the shops.
ParcelForce- they used to call it Knocky-Nine Doors when I was a kid- ring the bell and run away….
“I have never understood why sending a letter to people living at the far end of beyond in the deep, deep countryside, should cost no more than sending a letter from a dweller in a city to another dweller in the same city.”
Can’t speak for Britain but in the U.S. the decision to implement universal flat-rate letter delivery was an explicitly political decision embedded into the Constitution itself.
Because America was so physically large, the founders feared that city dwellers would exert undue political influence if they could more cheaply communicate in writing with elected officials and each other. At that time, letters were the primary means of long distance communication of any sort, so creating a flat rate for letters leveled the communication playing field for people living far from the urban cores.
IIRC, up until the time of the U.S. Civil War, 85% of the employees of the Federal government worked for the postal service. In effect, the Federal Government was a postal service, the coast guard (to enforce tariffs) and a few people in the military.
I use Mailboxes Etc. in Costa Rica. A letter from England seems to take 8-10 days to arrive, and I’ve never had one go missing so far. The only disadvantage is I don’t check there every day, so a letter can be sitting there for a while. But that’s why they call it snail mail.
Rather like VoIP is to standard telephony, wouldn’t it be cheaper for postboxes/post offices to have scanners? The letter is then reproduced in perfect technicolour at the nearest post office, and only local delivery is needed.
There is also the point, which I was only reminded of when deciding whether to label this as being about “globalization”
“Europeanisation” would be more accurate since it is the EU which is pushing for liberalisation of postal services.
Although your Royal Mail predates Benjamin Franklin’s establishment of the USPS by several hundred years, his professed reason for putting the State in charge of the mail probably applied to Henry VIII’s brainchild too: He thought that the government should have ultimate control of communication!
Franklin’s excuse was as a precaution in case of war (the usual excuse for this sort of thing).
Most monopolies are justified on grounds of supposed necessity and economics – it would be impractical and uneconomic to have two or more of a thing when one will do. In the last few decades we have repeatedly seen that this isn’t true even in businesses, like telephone system(s), that seemed to fit the ‘one is enough’ model. This excuse never even applied to the Postal system. It was a monopoly purely as a matter of government control. Sending all sorts of illicit things through the mail, and even writing things in the mail, will get one in serious Federal trouble, when the same act outside the mail is at most a local infraction.
Technology has made an end run around this particular monopoly so I suspect it will disappear soon as its value to the State has now eroded. I also expect governments to try hard to repalce it with more complete controls on communication.
I noticed, for example, that the Federal Election Commission in the US is looking closely at the use of the internet in election campaigning. They managed to muzzle free speech in most other areas in the last campaign finance bill while our shameful Supreme Court ignored this obvious breach of the Constitution. After all that hard work violating the Bill of Rights it must be very frustrating for them to see technological changes let the serfs get away with saying whatever they want anyway.
it sounds to me like you are just used to cronic service. there is absolutely no need for anyone to have keys to your block of flats or anything like that.
i live in japan where parcel delivery is privatised and incredibly efficient. i fairly regularly get one of those cards in my box, give it a call, tell them i’m in, and within about half an hour the man’s back with my parcel. on the rare occasions when the deliverer is particularly busy, they ask me when i’m in until and give me a rough time – rough means within half an hour, rather than the am/pm option available in the uk. out of hours delivery is the norm here. even the government postal service delivers at least until seven (the private ones go to at least nine). both private and government services regularly deliver on saturdays and sundays.
i live on the edge of a small town in the middle of the countryside, not a big city.
the japanese also have another great improvement: cash payment at the door. it is how i pay for almost everything i buy off the internet. admittedly such a system would probably not work in crime-ridden britain, where i avoid carrying even as little as twenty quid. here i don’t think twice about carrying a grand in cash, although i usually only keep about two-fifty on me. i apparently carry much less than most, no doubt residual paranoia from life in britain.
btw, koizumi is currently attempting to privatise the rest of japan’s postal services, bringing predicatable bleating.
“But meanwhile, does the Royal Mail retain its privileged ability to open the front door that I share with my neighbours?”
They can do what?!?! You have any idea how shocking that is to US ears?
The original decision to charge a flat rate was based on an analysis that the costs of sorting predominated over the costs of transportation, but both were amenable to economies of scale.
Odlyzko’s magisterial paper on the history of communications pricing explains why flat rate services eventually predominate.
I think that a lot of the problems we experience in the UK with the Royal Mail have to do with the rather profound lack of interest or enthusiasm that anyone in that organisation now has for their job. Many people in the UK seem to regard their local postman with distrust – stories in the press abound of postal workers not caring which house they deliver to, intercepting mail and parcels etc. etc, which must serve to further diminish any attempt to re-ignite the pride that postmen once held for their employment.
As a result I can certainly envisage a failed attempt by Phoney to sell off the Royal Mail in yet another form of “private/public partnership” where, as we have seen with London Underground, private investors are left on their own to deal with a completely entrenched closed-shop union that refuses to accept any form of new employment practices or contracts and places ridiculous demands upon its management – such as 32 hour working weeks or 52 days paid holidays, to name but a few. In the past I have always managed to circumvent postal strikes, postal failures, go-slows etc. by the Royal Mail by making use of DHL’s excellent letter service, where they used to offer to send a first class letter to the USA for £1.00, guaranteed to be posted in New York within 24 hours.
I have been running a mail order second-hand book business for the last five years. So far as I can recall, out of the thousands of packages (I’d guess about 3000) sent to UK the ones where there has been a delivery problem can be counted on one hand. I’m not even sure that *any* correctly addressed package has gone astray till the last month. I am *very* pleased with the Royal Mail, though they have managed to have problems with two packages recently (one was returned due to a “block of flats” problem in Glasgow which may have been exacerbated by their new policy of not always delivering before 10am – the flats had a service buzzer which was operational until 10am; the other package, sent to England, disappeared completely).
Peter Reynolds