Paul Carvell, chief executive of Business Post Group, has predicted that, following liberalisation of the postal market, Royal Mail will retain a profitable 80% share of the UK market.
Carvell said that the 20% that the Royal Mail would lose falls into two categories: some 15% would probably be shared by four competitors who would provide a nationwide service, and a further 5% would go to city centre specialist deliverers.
According to Carvell, the UK domestic mail market is worth £5.8 billion per year, while the international market is worth a further £0.8 billion. Since its first letter in May 2004, Business Post has now moved more than one hundred million letters.
“The Royal Mail has had three competitors since 2001 and it now retains a 98% market share,” said Carvell. “However, as Business Post, and others, rise to the challenge of collecting, sorting and delivering mail, this percentage will fall.”
“We are already providing an excellent service for our large corporate customers. We are moving into the small- and medium-sized business market, and soon we will be into the consumer market. Business Post is currently considering a wide range of options for how it will implement its service to consumers, but we have a pretty clear idea of what this will look like.”
This follows Royal Mail’s recent whining that it is up against unfair competition, and reports that it could lose some of its biggest and most lucrative customers since a number of government departments, high street banks and insurers are considering a switch to rival postal operators.
The Royal Bank of Scotland has already defected to Business Post, and other banks such as HSBC, Lloyds, TSB, Barclays and HBOS are reportedly looking at their options. TNT and DHL are reportedly bidding for this postal business.
Despite this, Carvell concluded that the consumer postal market will continue to grow, despite some substitution by e-mails. “There is a £1 billion market opportunity out there for companies like ours, and so the market will change,” he said. “There will be, however, one constant: Postmen are here to stay.”
