Fierce Competition

Fierce competition

In some countries around the world, mail delivery is open to competition. In others, it remains a closely guarded government monopoly. When mail service faces competition among multiple organizations, could it ultimately put accessibility at risk?

Last year, Royal Mail went through a significant change when the British government sold a majority stake in the company. While many still debate the decision, the company itself is blaming another factor entirely on its revenue circumstances – competition.

In 2006, mail service in the United Kingdom opened to competition. Throughout the years since, Royal Mail has shared the playing field with other organizations in the collection and sorting of mail. Recently, that field includes competing delivery service TNT Post.

In 2012, TNT Post launched delivery services in certain parts of the UK in direct competition with Royal Mail. TNT Post is continuing to expand its last mile of delivery coverage map and anticipates a staff of 20,000 carriers by the end of the current decade. Though the company is enjoying a period of increased profits, Royal Mail is concerned about the ultimate impact for customers as well as its own bottom line.

Officials at Royal Mail have called on tougher regulations for its rival, stating that the competition’s ability to cherry pick delivery areas and deliver on fewer days during week will ensure higher profit margins. This leaves Royal Mail at a strategic disadvantage by continuing its universal service obligation to deliver mail to all areas in the UK, including less profitable rural areas, six days per week.

However the British postal regulator Ofcom decides to handle the situation, Royal Mail’s competition is likely here to stay.

Do you think mail service in the United States should be opened up to competition?

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7 Comments

  1. grannybunny

     /  August 21, 2014

    Mail service in the U. S. is already open to competition, with certain necessary restrictions, such as USPS’ monopoly on First-Class Mail and exclusive access to mailboxes. These restrictions should not be lifted, for the same reasons as expressed in Great Britain. Private competitors can — and do — “cherry-pick” and only deliver to the most profitable areas. Universal service — to every address in the Country — at a uniform, affordable, price is a wonderful thing, and it would be unfair to allow competitors not also required to provide universal service to destroy the Postal Service by siphoning off all the profitable deliveries and leaving USPS only the unprofitable ones.

  2. Jonn

     /  August 21, 2014

    I agree. if companies in the US had the chance to delivery mail in profitable locations, that might leave USPS with only the unprofitable ones to deliver mail to. I can’t imagine the deficit USPS would have if this happened. I don’t think that’s what Ben would have wanted when he started the service in 1775.

  3. Anonymous

     /  August 22, 2014

    Maybe if it’s opened up for competition, then it would be run like a business…

    • Anonymous

       /  August 22, 2014

      Good point !

    • grannybunny

       /  August 22, 2014

      It’s already open for competition. The only way USPS could “be run [more] like a business,” would be for Congress to allow it to openly compete with the private sector with regard to shipping alchohol, reinstituting Postal banking, setting its own delivery days, closing down or restricting hours of unprofitable locations, etc. The private sector is not interested in competing with the Postal Service with regard to universal service at a uniform, affordable, price.

  4. Anonymous

     /  August 22, 2014

    No I do not why? Because they privatized in Australia which is what this is and the people have to pay 2.00 just to mail a letter. UK has been having problems all along and the serive is better with royal mail I have had so many problems with the other companies not notifying people amoung other things, sending mail back when the person has no idea the mail was evern there. Never had an issue with Royal Mail

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