Street Fight in London: TNT Post UK vs. Royal Mail
Starting in April, the private company TNT Post UK plans to test street delivery in the West End of London. Currently, TNT collects and sorts mail and then hands it over to Royal Mail, the traditional government-run postal provider in the United Kingdom, for final street delivery. Now, however, TNT Post UK wants to provide street delivery as well. TNT is seeking assistance from the UK government to provide a level playing field that will allow it to compete effectively with Royal Mail’s delivery service.
Royal Mail says that rival delivery networks hurt mail customers by undermining the efficiencies of a single delivery network, stating “If a rival delivery service cherry picks profitable, easy-to-deliver mail, it will weaken and ultimately undermine the Universal Service that only Royal Mail currently has the ability and commitment to deliver…” Britain’s postal regulator, Ofcom, plans to monitor the situation. Overall, this move represents another step toward a liberalized postal market in the UK, similar to those in other European Union countries. What are the benefits and risks of promoting this type of competition in the delivery market?
What could happen if a private company sets up a rival street delivery network that only served profitable areas, such as West End of London?
Could the traditional provider, Royal Mail, compete in the more profitable areas if it also is forced to provide delivery services to less profitable addresses in rural areas?
This blog is hosted by the OIG’s Risk Analysis Research Center.
Read MoreU.S. Mail: A Perpetual Duty
As America was expanding in the 1780s, the founding fathers realized that open access to secure and private communication among its dispersed citizens was critical to forming political groups and holding free elections without fear of retribution. The U.S. Constitution empowered Congress “to establish post offices and post roads,” the most common form of telecommunication (communication over a distance) in 1789. The founding fathers provided the necessary infrastructure to “bind” the growing nation together through communication and commerce. Thereby, the Post Office Department (now the U. S. Postal Service) was born.
In the late 1800s, the U.S. Supreme Court, in a case involving conflicting interest between two electric telegraph companies, stated a broad interpretation of Congress’ constitutional postal powers:
Read MoreTo Decouple or not to Decouple…
The Postal Service has “coupled” its retail and delivery operations, both managerially and physically, since delivery services were first established almost 150 years ago. Historical patterns, or the needs for delivery service efficiencies, primarily determined the location of physical facilities, which typically house both delivery and retail operations. Demands for postal retail services are changing both geographically and demographically as consumers age and population centers shift.
Read MoreIs “Coopetition” a Good Thing for the Postal Service?
Coopetition, is a buzzword cropping up in many business publications these days. Basically, it means that competing firms look for ways to cooperate with each other, rather than compete head-to-head for business. Working in conjunction with the U.S. Postal Service, the United Parcel Service (UPS) now has a program that allows customers of participating retailers to return merchandise by dropping it in any U.S. Postal Service mailbox, or at any post office. The program features a special label that makes the service possible. After a return package is dropped off at a Postal Service location, a UPS driver picks it up and the UPS ground network transports it back to the retailer. UPS, which has its main air hub in Louisville, KY, began testing the service last year with a few retailers and is expanding it because of “positive response.” Some say this is an example of successful coopetition.
There are a number of other current partnership programs with competitors. The Postal Service acts as a “last mile” partner for both UPS and FedEx, handling thousands of deliveries. Federal Express performs similar duties for the Postal Service providing air service for Postal Service parcels domestically as well as providing international logistics for the Postal Service’s Global Express Guaranteed service. In certain conditions, coopetition can be a “win-win-win”; helping not only the two businesses, but also the consumer.
Do you think these partnerships benefit the public through greater efficiencies or hurt the competitive level? Let us know what you think!
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Automated Package Stations – Rapidly Expanding Service in Europe!
online ordering and shipment integration.
About a year ago, we ran a short blog about Deutsche Post’s Automated Packstations. Operated via touch screens, Packstation services include 24/7 customer pick-up and the ability to mail parcels and letters as well as print postage. When a parcel arrives, the recipient is notified via e-mail for pick up at the kiosk. Customers can have their packages delivered to a Packstation of their choice.
Since our last blog, Packstations have caught on. The numbers have expanded, to about 2,500 Packstations in Germany and over 1 million registered customers. Typically located in high volume pedestrian areas along streets and in commuter rail stations, Packstations offer a myriad of customer choices for items being sent or received.
Mailing a parcel from a Packstation is cheaper than mailing a parcel from traditional post office counters, and there is a bonus rewards program as well. Points are earned for sending a package, buying stamps, picking up a package, having a friend register or simply reading the online newsletter. The points are redeemable for shopping vouchers, stamps, and gifts.
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