28 February 2007 | Antony Barton
Royal Mail has called for an overhaul of postal regulation to allow it to cut business mail charges and increase competitiveness.
The call follows the loss of large contracts with BT and the Department for Work and Pensions. The postal operator claims regulation is forcing business mail profits to subsidise the delivery of stamped letters, and instead wants to raise opportunities to reduce rates for business customers.
BT is among the former Royal Mail customers that recently ended its contract, instead signing a £90 million, three-year deal with delivery group TNT Post in a bid to save up to £3 million a year. (Web news, 17 January 2007)
Also last month The Department for Work and Pensions ended a contract in an attempt to cut £5 million a year from its £69 million annual postal bill. It has agreed a £12 million deal with private company UK Mail.
Adam Crozier, Royal Mail's chief executive, said: "The regulatory framework is no longer fit for today's environment where Royal Mail is competing against a growing number of rivals on a wide variety of mail services."
A spokesman for Royal Mail told supplymanagement.com that although the proposed changes would not guarantee that Royal Mail won back lost business customers, they would provide a "level playing field and allow Royal Mail the freedom to fight for every last letter".