Royal Mail set to deliver a strike this Christmas

With a national strike announcement expected from the Communication Workers
Union today, customers are increasingly worried about the reliability of
Royal Mail.

In the past few months, a series of local strikes has led to backlogs of
undelivered mail.

A spokesman for Amazon said: “We have not cancelled any long term contracts
with the Royal Mail. They continue to be one of a number of carriers that we
use. However, with the possibility of strike action in the near future, we
have been working on contingency measures with our other carriers to ensure
that we can continue to deliver to the high standards that our customers
expect from us.”

The internet retailer, which started out selling books but now sells
everything from toys to electronic equipment, is understood to be
negotiating with Home Delivery Network, a Royal Mail rival, which also
delivers for Tesco and Argos, over the delivery of parcels over 500 grams.

Brian Gaunt, chief executive of HDN, declined to comment on specific contracts
but said: “We are seeing a number of our customers preparing to start
marketing their deliveries as free of Royal Mail risk.”

Royal Mail was unavailable for comment last night.

The postal service had hoped to benefit from the rise in internet retailing,
as its revenue from letters dwindles owing to the advent of e-mail.

But a growing number of small businesses that operate through sites such as
eBay, the online auction house, have complained about the recent strikes,
with eBay telling customers during last month’s strikes that deliveries are
likely to be delayed by at least three days.

Also reports of mountains of undelivered mail in recent weeks will only serve
to exacerbate their concerns.

The CWU is angry about changes to working practices brought about by a
large-scale modernisation programme instituted by Royal Mail. Reports last
night suggested that its 120,000 members who work for Royal Mail voted in
favour of further strike action over coming months, which could soon start
to impact pre-Christmas post.

The CWU said yesterday it regretted disruption caused by the strikes, but
added: “We are very concerned that if we don’t get this right now, there
will be a lot more disruption to customer services in future.”

During this week alone, 24-hour stoppages are set to go ahead in various
locations around the country, from Bristol to Kilmarnock.

During the last series of strikes, in 2007, Royal Mail lost a smaller Amazon
contract worth £8 million to deliver second class parcels.

At that time, the stand-off was solved when Royal Mail managment agreed to a
series of pay deals and also offered further discussions about consulting
the union on future changes.

There is also little alternative for delivery of letters within the UK.
Private sector rivals such as TNT and DHL use parts of the Royal Mail
delivery infrastructure to operate.

In July Lord Mandelson, the Business Secretary, told the House of Lords that
proposed legislation to reform Royal Mail by selling a 30 per cent stake had
been shelved. If he had been able to attract £3 billion for the stake and
convince the 140 backbench Labour MPs who opposed the move, the Government
would have taken responsibility for the Royal Mail pension pot.

The pension scheme has a deficit of £3.4 billion and a revaluation is expected
to show a deficit of up to £10 billion. Such a shortfall would almost triple
the sum that Royal Mail would have to contribute to the fund and plunge the
postal service deeper into the red.