‘Rivals are talking to bulk mailers’
Tuesday 13th April 2010, 2:29PM BST.
POTENTIAL rivals to Guernsey Post are already conducting trials in the island, according to GP chief executive Gordon Steele.
‘I can assure you that Swiss Post, DHL, TNT, Citipost and others are all active in Guernsey right now conducting trials, working with the bulk mailers, looking to take business away from us,’ he said.
He said those companies were poised to take trade from the States-owned utility if it lost its court appeal against the Office of Utility regulation’s decision to reduce the price level of the reserved area to £1 and exclude packets from that control.
‘If we lose then we will see more competition than exists, and we will lose money, I expect, going from a profitable business to loss,’ said Mr Steele (pictured).
‘We will see profit made from postal business go to companies based in the UK, in Holland, Germany and Switzerland.’
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I can’t actually see rivals setting up post boxes around the island, it’s just so much easier to post a letter in a postbox than it is to go to the post office. I hope the OUR is removed from the island, it just isn’t needed here.
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Ha ha ha Mr. Steele
Nat west, HSBC, Lloydstsb and others are all here too!!
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GG – Competitors will be restricted to items over £1, so post boxes are the least of their concern. They will be after the more profitable parcels etc / leaving the GP with basic letters which believe it or not are not profitable. So what the general public will likely see is less post box collections, reduced house deliverers (say twice a week) and a local stamp increase
All good for us locals
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Can’t have your cake and eat it. We want easy and affordable communications, faster broadband speeds, more shopping choice and almost instant gratification but grumble when the price of a stamp might go up or hear that the beloved postie might have to hang up his helmet.
There’s an explosion in social media, mobile telecommunications and e-mails. We have never had it easier or cheaper to stay in touch but, as a consequence, the need for individual letters/cards etc is dwindling. As the numbers drop away the current business model becomes untenable but using other areas of the business (bulk mail) to subsidise the price of a stamp is suicide.
Why pander to the individual postal user, when this segment will only ever shrink before expiring completely? Meanwhile, the consequence of the world shifting from physical documents to online activity is a boom in parcels/mail order etc…driven by businesses that are being overpriced and underserviced by the very organisation that relies on them! No wonder the PO don’t want OUR sniffing around and scrutinising their business model….it’s based purely on exploiting their monopoly, whilst simultaneously hastening their own demise. Leave it to them and we’ll have no bulk mail industry, the price of stamps will still go up and the GPO senior management will turn the lights out as they head back to the UK.
The Post office service can only survive if it goes about efficiently managing the unavoidable decline in its core business, diversifying into complimentary disciplines (communications/logistics/storage/freight etc) and competing for bulk mail business by providing a first class service….not lip service.
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I quite agree with Carts, that if Mr Steele spent less time bewailing his lot and justifying the ridiculous amount of money that he spent on projects that wouldn’t fly to the media, perhaps he could focus on doing his job, which he was imported and is incredibly well paid for.
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perhaps they could save a few pennies ( and some trees to boot) by stopping that pointless little magazine they send round every few month?
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I am all for competition. The GP have got very lazy recently. They prefer to post their little white cards rather than deliver the actual packages. The amount of times I have been home & in a position to receive the items has got beyond a joke.
If competition means operators that do the job they are supposed to, then bring it on. I don’t pay for services only to be expected to go out of my way & meet the service provider half way in order for them to accomplish their business activities.
I have lodged many complaints with GP & the problem seems to have stopped. I bet I am not the only one that has experienced this either.
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Paul ( who is definitely NOT Arnold. Paul tends to have views on all subjects unlike Arnold )
I agree re the Posties leaving their calling card
They’re in and out of the gate like a rat up a drain.It may be something to do with being able to knock off early if they finish their round early?
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It seems from some of the previous posts here that there is still a misconception of what the regulators version of “competition” in the postal market will really mean to the general public.
The “Competitors” will NOT be interested in setting up postal boxes around the island as they will only be dealing in items that cost above £1 and they will NOT bring down the cost of postage for normal letters.
“Competitors” that deliver parcels already are certainly worse then GPL at shoving a ticket through your door or worse just leaving items on the doorstep. Most of these “Competitors” do not open or offer a collection service after normal office hours or the weekend like GPL already does.
The existence of competition will only share the existing business around more operators meaning slimmer profits for all, and if the “competition” decide that the business isn’t worth the investment in business terms they will pull the plug and leave it to someone else, if all of the “competitors” pulled out after a year or two perhaps because the UK government close the VAT deminimus loophole then all the supporters of “competition” in the postal market will be looking to GPL to sort the mess out, which by that time it may not be able to do if it has shrunk in size and infrastructure because of the “competition”.
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Jimmy
There is indeed confusion. By all accounts the Bulk Mailers have been subsidising the local postal rate for years. The last ‘guess’ at the real cost of local letter delivery was somewhere around £1.40 per letter?
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As someone who is employed in a Company using Bulk Mail products I feel I should add some of the facts that Mr Steele omitted.
Guernsey Post has only recently signed a Contract with DHL to offer a Bulk Mail service using down stream access, or DSA, so it is disingenuous of Mr Steele to state that DHL are working with Bulk Mailers in Guernsey to take their business, indeed, our company has yet to be canvassed by any potential competitors. In actual fact, Guernsey Post itself has set out a Tariff to offer this type of service, which will be via the use of DHL, however, they are not proposing to offer this service for at least another month, maybe a co-incidence but that is about the same time as the OUR dispute may be determined.
Have you noticed that Jersey Post is similarly fighting a rearguard action against the introduction of real competition, having been cushioned from this by their monopoly status. In both cases, these businesses have been pushed, into commercial status by politicians who recognised that the monopoly model was not working, and who hoped that the costs in the business could be trimmed to match real commercial businesses. FAT CHANCE…. to give an example, a postal delivery worker, with the protection of the Union, earns between £30,000 and £35,000 per year for delivering items to the door, and a delivery driver in the private sector, earns around £18,000 to £20,000 pa for exactly the same activity.
It doesn’t take much working out why both post offices are scared witless by the prospect of real competition.
Guernsey Post is fighting the regulator because it is easier than fighting the Union.
The OUR has visibility of the costs of GP, including the excessive earnings of the Postal workers, which is why OUR is pressuring Guernsey Post to reduce their overheads.
The politicians are back peddling on the role of the OUR because they are frightened of a Union backlash which could see the non delivery of mail to the Island.
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A thought-provoking contribution, Anthony.
In purely commercial terms, nurses, teachers, police officers, etc. might be regarded as costing more than the market might dictate.
The issue might then revolve around which activities are to be regarded as part of a service for our community and which should be merely dictated by market conditions.
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Anthony
Excellent excellent post!
GP are scared of competition because basically they have become too bloated to effectively compete.
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Funny how the “rent-a-cause” deputies (Jones, Fallaise etc) – dont seem to be posting on this thread? Doesnt fit with their mental paradigm and prejudices – so why not just ignore the facts eh?
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the only group missing from the party is Postwatch – surprised Gordon hasnt wheeled them out yet, we have had Gordon’s partner from the charity pulling the strings for the facebook campaign – time for postwatch to charge in?
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Anthony, Jack.
To what extent, if any, do you regard post as an essential service which might (at least in part) be subsidised by the exchequer… i.e. the taxpayer?
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Hi Sean
Is there a difference in terms of engagement between the OUR and the Telco companies and the OUR and the GPL? The reason I ask this is that CW had to ensure clear separation between different parts of their business. Broadband profit could not be used to keep mobile minute charges down.
Does the same apply to the GPL? The Bulk Mailers would suggest that they subsidise the local delivery.
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Neil,
To ensure an accurate response it is best to put your question to John Curran at the OUR.
I am not familiar with the protocols of corporate governance but I seem to recollect economic textbooks dealing with commercial cross-subsidies via “lost leaders”, etc.
I take your point re. the perspective of the bulk mailers. For the recent arrivals at least, their decision to locate here was probably made knowing the nature of the Guernsey market. That said, it is quite understandable that they would wish to to see the regulated market here move in their favour… or at least not see their existing conditions worsen.
I would be reluctant to see this issue as merely local consumers versus bulk mailers, or indeed as merely GPL versus the OUR in a proxy conflict. Hence, in part, my attempt to seek opinions on the role of the state and the need for clarity on the status (service or not) of postal operations.
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Sean
Thanks for the question -the fact you’re asking implies you have bought the claptrap emanating from the Envoy House spin machine. Answer is no – taxpayer should not bail out post office board. If they did their job properly we would not have to. But then the muppets up there should not be spending almost a million quid on a banking venture and other vanity projects. Does anyone on the Board have banking experience, I don’t know, but safe bet perhaps is no. Go on make my day and surprise me. I keep reading that the business is doomed and mail volumes are down – I thought outbound mail was doing bloney well with moonpig and the other companies. Our volumes are growing year on year, you guys are being misled or that fact isn’t convenient to the argument for today. Sean instead of asking me questions why not pose some probing questions of the management and post the answers you get here? I still don’t know who the chairman of the post office board is.
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Jack’s colourful reply prompts me to point out that rather then having “bought” the stance “emanating from the Envoy House spin machine”, I have instead taken the time to speak with a range of voices including the OUR, bulk mailers, GPL management and “postie” staff (and former staff)other commercial users and, perhaps most importantly, a fair number of ordinary Bailiwick consumers.
I hope that Jack and other readers will understand the sensitivities which prevent me from posting comments made in private by many of those to whom I have spoken.
In the interests of informed debate I am still collecting considered opinions ahead of the debate around the Jones’ requete next week.
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Sean ecstatic to hear you are researching this, will be very interested to hear your contribution to the debate and will try and listen in. Please surprise me!
Still waiting for jones, fallaise etc chip in to this discussion – I cant hear you!!!!!!!!!!!!!!! I set very low expectations for our elected representatives and they never cease to fail to meet them.
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(colourful) Jack,
I contributed recently to another thread on the regulation of utilities. Sorry – I can’t remember now what the title of the thread was.
I haven’t posted under this thread thus far because I can’t add anything to what I wrote previously. Also I have very little spare time this week to be on here.
I will say one thing, though: my support for the Jones Requete has nothing to do with sympathy for the management at GP or GE, and everything to do with the best interests of the island in securing sustainable postal and electricity provision in the long-term.
You may disagree with my conclusions, but I can assure you that they are not based on buying “clap trap emanating from the Envoy House spin machine”, as you put it.
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(Colourful) Jack,
My view is simple we suffer from chronic over regulation in this island, whether it is in the way the publicly owned utilities are run or the wretched, intrusive so called Health & Safety laws. The world has become obsessed with regulating everything. My Requete calls for a complete review of the Office of Utility regulation, its powers and its functions. Simple really and I have nothing more to add until after the debate.
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Hello Boys!
Its a bit like waiting for a bus, here I am waiting for days and then three of you in one go! cant wait to hear your views in da house. great to read your views here too – I have a sure fire vote winner for you – believe it or not but our system of government is cracked, Davey you say we are over regulated, many of us out here think we are over represented – why not take a useful racket to the states and get rid of the number of deputies? you can have my vote (and respect) if you did that. you guys will now be thinking about reelection soon i guess (and one of you will be planning to be a career politician for the rest of your life!) so why not test what your electorate think of getting rid of some deputies – you all say you listen to the people – lets see you talk the talk and walk the walk Not holding my breath on this one though – turkeys voting for christmas heh?
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what a hoot – Dennis and Postwatch right on cue (see April 18 – 9-44pm post) – could not have written it meself. What has he got planned next!
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