Even the government think Royal Mail is too expensive
There’s something that’s been puzzling me about Royal Mail – why doesn’t our own Government exclusively use them? Some Government departments choose to use alternative postal services. Of course what using a competitor really means is that the competitor picks up the mail from the government and passes it to Royal Mail who are obliged to deliver it from the local sorting office.
The government hopes to sell off Royal Mail and leave them for the private investors to sort out. Except of course they won’t be free – whilst Royal Mail’s competitors can continue to cherry pick the most lucrative parts of the mail service, Royal Mail will still be obliged to cover the least profitable bits that are left over.
So the government are trying to sell Royal Mail and to convince potential investors that regardless of the constraints which Royal Mail operate under (such as the Universal delivery service, and delivering their competitors mail when it’s uneconomical for their competitors to do so, and delivering mail from overseas at rock bottom prices) the Royal Mail is actually a great company to invest in.
If the Royal Mail is such a great company providing such a great service how come the government don’t exclusively use them? If you were an investor would you buy a company that the current owner thought was so uncompetitive chose an alternative?
No wonder Royal Mail is struggling, even their owners don’t choose to use them.