29 August 2003

Strike report - major mail users say let us have alternatives!

Triangle Management Services Limited (the leading specialist consultants to the mail industry) has interviewed a sample of Royal Mail’s leading customers and has found that they all believe any strike action should lead to some period of immediate deregulation. The majority (over 70%) of the top users interviewed, who collectively spend around £400 million a year on post, say that if there is industrial disruption then private carriers should be allowed to collect and deliver indefinitely not just during the period of any strike. All would prefer to pay the current Royal Mail tariffs but over 40% would be prepared to pay more - some up to 50% more than they are currently paying. Almost 90% of those interviewed said that a strike (if it lasted more than a month) would have a significant, major or catastrophic effect on their business.

Paul Jackson, Chief Executive of Triangle, says that the results are a surprise. “The survey shows that customers want certainty of service and any strike action, or indeed even the threat of it, removes this.” Some of those polled are looking at alternative methods of getting their message across or their bills paid and a number are considering very targeted (by post code) mailings to allow private carriers to operate effectively. But many major customers can’t switch easily from mail and competition brings alternative options to the marketplace. Jackson commented “customers have shown that they would value and even be prepared to pay more to use alternative services and this runs contrary to popular belief that the desire for increased competition is all about being able to pay less for mailings.” Triangle concludes that the results of this research make Royal Mail more vulnerable to competition than previously thought.

The survey clearly indicates that both Royal Mail and the CWU should think very carefully about the impact on their customers, and as a consequence the future of their own business, before embarking on any industrial disruption.

Editors Note

Since suggestions of a strike were first made around 100 of the top mail users in the UK were asked by email on 22nd August 2003 to respond to the following questions. Thirty customers, spending a total of approximately £400 million annually with Royal Mail (approximately 5% of Royal Mail’s total revenue) a good representative sample, responded as follows:

Q1. If the Communication Workers Union (CWU) goes on strike, do you think that companies other than Royal Mail should be allowed to collect and deliver mail? Say “yes” to one of the following:

a) For the duration of the strike? 23.3%
b) For one year 3.3%
c) Indefinitely 73.4%
d) Not at all 0%

Q2. If new competing services came to the market as a result of the strike at what price would your company be likely to try them? Say “yes” to as many of these as you wish.

a) Prices the same as Royal Mail 97%
b) Prices up to 5% more expensive 43%
c) Prices 5% to 15% more expensive 17%
d) Prices 15% to 25% more expensive 7%
e) Prices 25% to 50% more expensive 7%
f) Prices over 50 % more expensive 7%
(NB Multiple answers were possible)

Q3. If the strike lasted more than one month continuously, what would the financial effect on your business be? Say “yes” to one of these.
a) Catastrophic 25%
b) Major 43%
c) Significant 25%
d) Moderate 7%
e) Insignificant 0%

Triangle also organises The UK Mail Show.
The next show in November has a key focus on the Mail User and many leading names on the speaker platform including Elmar Toime of Royal Mail Group, Graham Corbett of Postcomm, Billy Hayes of the CWU and Alan Goddard of Deutsche Post UK.

• Details of more speakers and seminar topics can be found on Triangle’s website (click here)

• Press delegates are welcome to attend

For further information, please contact Paul Jackson, Chief Executive of Triangle Management Services on +44 (0)870 950 7900 or mobile +44 (0)7974 565618 email at PaulJ@triangle.eu.com

Triangle Management Services Ltd., founded in 1984 is today the pre-eminent independent specialist management services company within the global mail, express, and logistics sectors. As well as market research surveys, Triangle also offers the following services to clients: Recruitment, Consultancy, Mergers & Acquisitions and Conferences - all focussed on the mail and express industry sectors.

Triangle Contacts:

Triangle Links:

For further information contact:

Paul Jackson
Tel: +44 (0)870 950 7900
Fax: +44 (0)870 950 7910

• 4th UK Mail Show •
• Post Office Retail Forum •
• ME-News •
• UK Mail News •
• Top Mail & Express Vacancies •