21 June 2007 | Paul Snell
Internet retailer Amazon has decided to cease its second-class mail contract with Royal Mail.
The contract to deliver the retailer's second-class post was worth around £8 million a year. Amazon is the latest firm to take its mail contract away from the group. Both BT (Web news, 17 Jan) and the Department for Work and Pensions (News, 18 Jan) have moved contracts away from Royal Mail this year.
A spokesman for Royal Mail said in a statement: "The loss of such a significant piece of [Amazon's] business demonstrates very clearly that Royal Mail's higher costs, directly caused by our failure to fully modernise our operations, are costing us business."
The spokesman added it was vital for Royal Mail to modernise if it was able to compete with its more efficient rivals. The statement added potential strike action was aimed at preventing the modernisation "that could keep big customers on board".
Amazon would not comment on who would be taking over the contract in the future.