Wednesday, 25 April 2012

The universal postal myth

I was listening the other today to someone from the Royal Mail moaning about competing services cherry picking and doing the lucrative postal deliveries inside London, while the poor old Royal Mail had to do all the difficult expensive stuff. And this had to be the case because of the need for a universal post, which 'everyone agrees' is essential.

Well, I don't think everyone does agree. I, for one, don't think it is essential.

Think about it. Would you expect to pay the same price for a bus into town and to get to Edinburgh? Hardly. Why should mail be any different? We understand we need to pay more to send a letter to, say, Hong Kong - why shouldn't it cost more to send it somewhere far distant and expensive to reach in the British Isles.

Yes, you might say, but what about the poor people who live at the furthest reaches of the UK? What indeed? They have every right to live there. But I'm not sure they have a right to expect me to subsidise their postal service every time I send something just down the road to Salisbury.

I think part of the problem with the universal post system is the lack of creativity applied to getting around the practical difficulties of doing anything different. At first sight you might imagine it would be a nightmare, having to work out how far it is to your destination. And it would be if you did this (although the railway manages to operate a fares system that copes - and so could the Post Office). But here are two easy-to-implement alternatives:
  • Simple banding. Anything to the same postcode letters is local, anything in the same country is country, anything to a different country within the UK is crossborder. Three bands, automatically detectable from the postcode. Easy peasy.
  • Receiver pays. This is the more interesting idea. Still have a universal price to send a letter anywhere in the UK. But if you live more than a certain distance from the nearest sorting office, you pay a premium to receive your post (or go and collect it for free). This would be fiddly to do on a per-item basis, but could be simply implemented monthly or annually through the council tax collection.
If we moved away from a universal pricing system, we could then get proper competition in the postal system and Royal Mail wouldn't be able to whinge about other companies cherrypicking as they would be adequately compensated for the difficult-to-get-to destinations and could provide a competitive base price for the local stuff. It would probably bring down the cost of many mail items.

It's not perfect - it's top of the head, 5 minutes thought stuff, I admit it. There would be extra complications. But the fact is that the idea of having a single price for a letter to anywhere in the UK is not sacrosanct, it is not written into the constitution (hardly surprising when we don't have a written constitution), and it's not necessarily the best way to go about things. It is at least worth thinking about the alternatives, rather than taking the usual stick-our-heads-in-the-sand approach.

Image from Wikipedia


  1. Brian

    I need to refine your arguments above in some small ways but I broadly agree with your views - the Post Office don't seem to have done any creative thinking about developing their services; instead they've simply put up their prices and left it at that - oh, and create some complicated pricing structure based on different weights and size formats, and whether or not you use stamps or franking machines.

    My view has always been that they need to eliminate second class post and send everything by one class; a letter with a first class stamp travels the same route as one with a second class stamp so differentiating on time introduces an unecessary (and probably expensive) process that isn't required in the overall scheme of things.

    As for your suggested "local" services, using only the same post code will cause a problem at the edges of each area as you will get examples of "country" wide postage rates being applied to a letter which progresses by perhaps only a street or two; easier would be for adjacent post codes to be at local rates with London as one post code rather than many as today.

    As for the receiver paying, dare I suggest that this would wipe out at a stroke all direct mail (a bad thing if you run the Post Office, a good thing if you're the recipient!)

    And one other thing, the range of different value stamps needs to be reduced so that all postage rates should be a multiple of the "base" stamp - so a local stamp would be 20p, a country stamp would be 40p and an international one would be 60p for Europe and 80p for the rest.


  2. All good points - as I said it was top of the head stuff, definitely needs refinement, but the main thing is that they always assume that all they can do is tweak things, and that's not true.

    I love the idea of prices being multiples of a base stamp - the pricing is currently much too complicated.