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BreakfastMonday, 15 July, 2002, 07:05 GMT 08:05 UK
Second post stopped in pilot areas
Post van delivering mail
The scheme aims to help save the company �350m
The second post has been abolished in 14 areas of the UK, as part of a pilot scheme looking at ways to save delivery firm Consignia.

From Monday, homes and businesses in the selected postcodes will only get one delivery a day, with no guarantee that it will be before 9am unless a fee of up to �14 is paid.

Consignia, which has suffered losses of more than �1bn, believes that it could save �350m a year if the scheme was introduced nationwide.



On Breakfast we talked to David Beardsley who runs a small website business in Plymouth, one of the pilot areas. We also spoke to Peter Carr from Postwatch.

David Beardsley said:

We are being asked to pay twice. It is inconvenient, the early mail is crucial to small businesses who work with small margins and are dependent on prompt responses.

Peter Carr said:

�14 for mail deliveries before 9am for Businesses is nonsensical, the chair has expressed displeasure, the sender is the client and they are already paying. This clumsy press release fails to highlight the merit, our post hasn't changed for over 30 years. The pilot is to test proposals that we need to eliminate the One million pound loss. There is a wind of change, the leadership has changed. We will se more changes.


On Sunday it was confirmed that the pilot schemes would go ahead with three price bands instead of a single flat rate of �14 a week, as had been planned.

Strong public reaction to the charge had prompted Consignia to reconsider these charges.

"One of the things we have to do for our customers is we have to deliver some value. And I think that �14 is a lot of money for small businesses," Allan Leighton, Consignia chairman said.

'Common sense'

Under the schemes businesses and individuals that want to receive post before 9am will now have to pay a weekly fee of either �5, �10 or �14 if they get fewer than 20 letters a day.


So many costs are linked to providing daily deliveries that it is the obvious area to look at

Postwatch
Customers receiving more than 20 letters a day will receive their mail before 9am, while others will be delivered by noon.

At present the second post accounts for only 4% of letters delivered but 20% of the postal service's costs.

Gillian Wilmot, Royal Mail's managing director for mail markets, said: "Royal Mail is cutting costs and improving efficiency in a common sense and responsible way.

"We are balancing the needs for a reliable next day service with safeguarding an affordable service for everyone."

'No sacred cows'

Postwatch, the industry regulator has supported the pilot schemes.

Chairman Peter Carr said: "It's quite right for Royal Mail to examine every option to improve its profitability.

"There can be no sacred cows. So many costs are linked to providing daily deliveries that it is the obvious area to look at."

Other cost-cutting measures include redundancy for more than 17,000 workers.

The pilot areas where the charges will be introduced include:

  • Crawley, West Sussex
  • Bow, east London
  • Edinburgh Dell
  • Sheringham, Norfolk
  • east Manchester
  • Llanelli, Wales
  • Newbury, Berks
  • Newhaven, East Sussex
  • Loughborough, Leicestershire
  • Halifax, West Yorkshire
  • Plymouth, Devon
  • Ballymena, Northern Ireland
  • Thirsk, north Yorkshire
  • St Helens, Merseyside.

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10 Jul 02 | Business
25 Mar 02 | Business
05 May 02 | Business
13 Jun 02 | Business
25 Mar 02 | Business
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