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The Post Office exclusivity with Royal Mail could soon end

By Chris Dawson November 19, 2020 - 9:00 am

On the 1st of April 2012 the Post Office became independent of Royal Mail and the two companies inked a business agreement to allow the Post Offices to continue issuing stamps and accept letters and parcels for Royal Mail. This contract was for a decade and needs to be renewed but there’s a problem. The Post Office wants to spread it’s wings and handle parcels for other carriers breaking the 10 year Post Office exclusivity agreement they’ve had to work under since they became ‘independent’.

The Times has reported negotiations are under way with Royal Mail and the Post Office exclusivity is top of the agenda to open the door and allow couriers and potentially even Amazon to have packages handled by the Post Office. This is eminently sensible but the end of the Post Office exclusivity deal with Royal Mail is going to cause ructions for both companies.

Currently, the Post Office can’t even handle all Royal Mail services – Tracked 24 and 48 can be purchased online at Royal Mail Click and Drop but unlike most other Royal Mail services you can’t even drop Tracked 24 and 48 parcels at the Post Office – their Horizon system can’t even scan them and if you try to dump them at the Post Office you’ll be told to drop them at your local Royal Mail delivery office. Cross fingers a new deal with Royal Mail would sort out anomalies like this.

The Post Office board is interesting as there are some time served members who have been around forever and are ideologically attached to the Royal Mail. There are also newer board members that don’t see the centuries old partnership with Royal Mail as something that should determine the future and would happily see the Post Office become a mega parcel shop hub selling services and accepting parcels for multiple couriers.

Royal Mail need the Post Office and it’s inconceivable that they wouldn’t want them still selling stamps, but they’re unlikely to welcome your local Post Master saying “Yes, you can send your parcel via Royal Mail or Parcelforce, but you could save money by sending via [insert names of various courier companies here]”.

Royal Mail would still pick up the less profitable letter type post, but if the Post Office could sell services with a range of couriers and, dare I say, alternative postal carriers using Royal Mail downstream services for final mile delivery, the national postal service could see their business ebbing away in communities across the country.

**** Corrected to remove reference to Post Office branches using PayPoint as this was incorrect, they use ‘Paystation’ terminals and/or are Payzone outlets.

  • victor
    1 week ago

    post office can be done without
    stamps are history, online purchase is the future
    not beyond the wit of man to have a bar code scanner and ticket printer on larger post boxes or locker style despatch points at super markets shopping malls etc that accept parcels

  • victor
    1 week ago

    we avoid post office counters jobsworths trying to break the Guinness book of records for queueing

  • Stuart Waudby
    1 week ago

    Both companies are stuck in the past. Why does Royal Mail not roll out more parcel post boxes and cut the Post Office out of half the sending transactions? Why do I need to goto a post office to get a receipt for tracked post to get my proof of posting for insurance I am forced to pay for? Why is it so expensive for business collections when the van passes my house daily? Why is it cheaper for a domestic collection than a business collection?

    Currently my only exposure to other people and Covid 19 is unnecessary trips to the post office to get receipts for my parcels. All Royal Mail need to do is roll out parcel boxes to more rural locations and scan tracked mail when they receive it to dramatically reduce cost and exposure of Post Office staff to Covid 19….

  • victor
    1 week ago

    our local post office is in the same building as the royalmail delivery office
    yet royal mail pay the post office to accept mail
    how daft is that ?

  • Charlie
    1 week ago

    I purchase a small amount of pre-paid postage via Amazon, ebay, and Royal Mail etc, as it is easier, quicker, sometimes cheaper, and gives me more protection, and doesn’t cause a queue in the Post Office.

    But when I drop it off they say that it is people like me that are killing the local Post Offices. They claim they get paid nothing from Royal Mail for handling pre-paid postage.

    The Post Office tried to fight back with “Drop & Go”, but I found it a clunky, manual, and unreliable system.

    This is an utterly ludicrous situation whereby the Royal Mail directly competes against the Post Office by selling their own postage online, and via Amazon, ebay etc, and then the Post Office apparently agrees to process it for free.

    The Post Office might as well handle parcels for myHermes etc. At least they would make some money from that.

  • 1 week ago

    To me it would make complete sense that Post Offices would handle multiple Couriers mail, especially in Small Villages etc etc, I would rarely ever use one, however, if the Post Office are to survive then they need to evlove.

  • Mark
    1 week ago

    Why is any one concerned the whole way forward is AMAZON AMAZON AMAZON

    there will be no high streets and no postage without using Amazon they are already in Morrisons delivery so next will be the store itself and then we can all sit back and moan that they are running everything in the UK and pay no tax.

    The whole setup is geared around a slow monopolisation of the world.

  • Victor
    1 week ago

    sub postmasters receive remuneration for handling mail
    Thats a fact

  • 1 week ago

    @ Mark

    Though it’s digressing from the article (as usual) I’d say don’t worry about Amazon. I like some of the stuff they do, but they are too greedy to monopolise the world. Here’s an example:

    I’ve an item listed on ebay for over £60. It’s a bit niche, but it sells OK considering. My total selling fees under ebay managed payments for each one that sells is £5. On Amazon, the estimated fee per sale is £10.25. They want over twice as much, not that it matters, as the item hasn’t sold on Amazon since 2018. All sales since then have been either ebay sales or direct sales. Amazon has missed out entirely by being too greedy on the fees. This is not the only item I have with this sales pattern.

    That’s what will prevent Amazon taking over the world. They want too big a cut, so others will always be able to undercut them. It’s the same reason Aldi and Lidi can take on Asda or Tesco, or why Hermes can beat Royal Mail, which, linking back to the article, is why the Post Office would like some of that parcel processing business that people are currently going to the local shops with.

  • Gareth
    1 week ago

    Stamps are certainly not dead, there’s a collectability, a nostalgia, a practical purpose and an age old tradition. Postage labels are a convenience for some things, but there’s still plenty of uses for stamps. Also, not everybody has internet access and a printer. I for one use stamps almost exclusively and will continue to do so.

  • Victor
    1 week ago

    Dare bet the post Office Wont plan their future on stamp sales

  • Diane Hunter
    1 week ago

    Most of my post is franked large letter for personalised ribbon sales. We do send albeit a smaller amount of small parcels. We would consider using the post office for DPD next day delivery if we could drop off there. At the moment the drop off is at the nearest Curry’s which is much further away.

  • NorthCrystal
    1 week ago

    I used to visit local post office Mon-Fri for over a year.
    From the queues I can remember the majority of customers were there to get their money(pension?), Exchange travel money, occasionally drop off a parcel/return. That’s high street PO within large city.
    If PO want to survive they need to accept more couriers, and train their staff to be less stinky (e.g. I come with postage paid through C&D and they’re like “what do I do with this??!”.

  • I run a mail order business dealing in stamps old and new, so obviously my customers expect me to use stamps. Not only that it has been possible to buy older stampd at a discount from face value from retiring collectors, estates and other dealers due to over supply of that market in the past. This is much cheaper than using PayPal/eBay-postage. Of course you need scales to accurately weigh, but they are also cheap.

    Business is well down because of the pandemic because I don’t want people to have to wait for international mail which is still iffy. But even so now, and when I visited more often, our Crown Post Office rarely has queues except at lunch and just after school time (and not then in 1st lockdown), so queues are becoming a thing of the past if you choose your time. And all the staff (employed by POL not self-employed) are very friendly despite the fact that my post is pre-stamped.

  • John
    3 days ago

    This could work both ways though.

    If the tie up between Royal Mail and the Post Office is loosened, this opens up Royal Mail to start accepting parcels at other locations, like Hermes Drop Off, etc and you may be able to drop Royal Mail parcels at more convenient drop off points, Tesco’s, Co-op etc.

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