UK To See Full Postal Competition in 2007

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Consignia, the British postal service, will open to full competition by April 2007, a year later than initially planned, the Postal Services Commission said yesterday.


Competition will be introduced in three phases. Bids for bulk-mail services begin Jan. 1, 2003. The second phase will open 60 percent of the postal market to competition in April 2005. Phase three will see full competition starting in April 2007.


The Postal Services Commission, or Postcomm, said earlier this year that Consignia's performance had deteriorated so severely that it faced little choice but to open the postal service to alternative operators. It added a year to the schedule, however, after warnings from Consignia and unions that the cash-strapped organization would be forced to slash jobs and raise stamp prices if faced with competition too early.


"While keeping the essential framework intact, we have made a number of detailed changes which collectively add up to a material shift in the balance of risk in Consignia's favor," Postcomm chairman Graham Corbett said. "We want to see a robust and competitive Consignia at the core of a robust and competitive postal market. That can only strengthen the universal postal service."


Corbett said competition in the postal market would provide more reliable and innovative customer services.


Postcomm said that during the transition period to full market opening, it would intervene if necessary to prevent price increases.


Consignia said it was encouraged by the delays Postcomm made to its timetable for introducing more competition into the UK mail market but that one key element still undecided is the price Consignia is to be paid by rival companies that want to use Royal Mail's network for delivering mail over the "final mile" to customers' addresses.


Meanwhile, among other delivery companies, a UK-based dairy reportedly applied for permission to deliver letters and parcels with morning milk.


Express Dairies, Leicester, England, seeks a license to let employees deliver business mail to households. If Postcomm grants the application, Express Dairies will get a 12-month license to carry up to 4.6 million items.


Express Dairies has 106 warehouses in England and Wales and has 3,500 routes making delivering to 1.5 million households and 26,000 businesses. It already delivers 12.8 million leaflets and catalogs for itself and other firms.


Postcomm is seeking responses to the application by June 24 before deciding.


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