Royal Mail letting down businesses

Postwatch said that, mainly due to strike action taken last autumn, it expected Royal Mail not to meet any of its 15 targets, with letter reliability dropping dramatically between October and December.

Cash-strapped Royal Mail now looks likely to be hit with another fine, after paying out £7.5 million in early 2003 after failing 12 of its 15 performance targets.

However, Postwatch said that businesses will now be able to claim compensation for poor performance on their yearly postage service.

Small businesses have already suffered badly due to the plight of the ailing postal company, with October’s pay strike stopping all deliveries in and around London.

Despite Royal Mail’s poor performance, small firms were still handed a price increase on all post last year.

This latest drop in Royal Mail’s reliability level could force small firms who rely on the post to turn to other expensive methods, such as couriers, to ensure items are delivered.

Peter Carr, chairman of Postwatch, said that customers don’t cause strikes but they do suffer the consequences.

“Poor industrial relations are only one reason for Royal Mail failing to meet its targets. It is not, however, an acceptable excuse.

“Customers of Royal Mail’s business products will for the first time receive compensatory rebates of up to five per cent of their year’s postage bills. This will add up to many millions of pounds.

“These unnecessary losses should incentivise management to redouble its efforts to provide a satisfactory service.

“Customers want the service they are paying for – not compensation for failure,” he said.

Adam Crozier, chief executive of Royal Mail, said that the strikes and internal changes were to blame for the series of missed targets.

“But we don’t make changes lightly and the truth it change is necessary to put us in a position where we can consistently meet – and exceed – our regulatory targets,” he said.