If private companies can pick the best bits of the network, the obligation to deliver to all is undermined. That’s why we’re considering action.
From the Guardian, Comment is free, Thursday 6 December 2012 15.05 GMT
According to a headline in Wednesday’s Daily Mail, postal workers are threatening “to ditch half of their deliveries in bid to protect Royal Mail from ‘unfair’ competition“.
The Mail makes it clear with those quotation marks exactly where it stands on plans by the Communication Workers’ Union (CWU) to ballot its members on whether to boycott letters handled by rival companies.
As the article says: “Royal Mail has lost business to the likes of TNT Post and UK Mail over the past seven years. Currently, half of all letters are handled by a rival company, with Royal Mail responsible for only the final mile of the delivery.” Again, it’s that little word “only” which betrays its prejudice. In case you’ve forgotten, the business of a postal delivery service is to deliver the post.
The Royal Mail doesn’t “only” deliver the final mile. The final mile is the actual work. All the rival companies do is collect the mail from the bulk mail contractors (such as banks and utility companies) and then drive it to one of the Royal Mail’s delivery hubs for distribution around the country. We do all the rest.
It is Royal Mail postal workers like me who walk along your street and up and down your garden path, six days a week, in order to get the mail to you. The technical term is downstream access. Private mail companies have access to the Royal Mail’s distribution system. The Royal Mail has to apply something known as “headroom” in fixing its price for this service. Headroom is the difference between what the Royal Mail is allowed to charge for its bulk mail contracts and what it can charge its rivals for access to the network. It has to allow rival companies headroom to make a profit.
The whole system is administered by Ofcom, the postal regulator. In other words, the Royal Mail is heavily regulated to achieve what is sometimes called “deregulation”, ie access of private companies to the postal market.
This is what the CWU is talking about to when it refers to “unfair competition”. As the union says: “CWU is concerned that unfair competition is undermining the sustainability of the universal service … Private postal company mail makes up 45% of letter volumes delivered by Royal Mail, a figure which has consistently grown under competition arrangements. New end-to-end competition is a worrying expansion, further undermining the USO [universal service obligation].”
Guardian readers will not be surprised by this statement, as I’ve been banging on about the issue for the last three years at least. What is new is the introduction of so-called end-to-end competition into the postal market. Currently only one company, TNT, is doing this, with around 300 delivery staff delivering mail to about 350,000 households in west and central London.
What this means is that TNT continues to use the Royal Mail’s downstream access service in all but those 350,000 households, although in a recent press release it said it planned to increase the number of its postal employees to 20,000 in the next five years.
There is no obligation on TNT to deliver the universal service, therefore it is able to cherry-pick those parts of the network that are the most profitable. Nor is there any obligation to match the Royal Mail’s pay and conditions.
In other words, what this amounts to is an attack upon our jobs. If TNT and other private mail companies are able to pick the best bits of the network with no obligation to deliver to the rest of the country and, at the same time, are able to pay reduced wages, then this is clearly a threat – not only to our pay and conditions, but also to the universal service. Personally, I will be voting yes when my ballot paper arrives.
Read more here.
Royal Mail may be viewed with a high level of affection by the public now, but will that still be the case after it’s privatised?
From the Guardian Comment is free
The inevitable has happened. The government has announced its schedule for the privatisation of the Royal Mail, due to begin in 2013.
It’s not clear yet whether it will be full privatisation or part-privatisation, whether it will be sold off to another mail company or to a private equity firm, or whether it will be floated on the stock market as an IPO (initial public offering) and advertised to the public in the manner of the “Tell Sid” campaign for the sale of British Gas way back in 1986. “We see no reason why this company should not be IPO-able,” said one senior figure. “Royal Mail is viewed with a high level of affection by the public.”
The reasons given for the privatisation were outlined in the Hooper report in 2010.
They are as follows:
1) Falling volumes of mail due to competition from electronic media such as email and texts.
2) The inefficiency of the Royal Mail compared with its competitors.
3) The need for modernisation and the private investment to complete this.
Hooper consulted widely throughout the industry. However, he has never, as far as I know, spoken to any postal workers.
What we would have told him is that while it may be true that mail volumes have fallen, staff numbers have been falling at a faster rate. Up to 50,000 job losses since 2002.
In other words, the weight of mail for the average postal worker has been increasing. We are carrying more mail, to greater numbers of people, on larger rounds than ever. Our sacks are heavier. We work longer hours, and we’ve taken an effective pay cut since the postal agreement of 2010 in which door-to-door (junk mail) – which we were previously paid for separately – has now been incorporated into our workload. In other words, falling mail volumes have been more than compensated for by staff efficiencies.
We would also have told him that the so-called inefficiency of the Royal Mail is due as much to market liberalisation as it is to anything inherent in the company.
Private mail companies have access to the Royal Mail network through a mechanism known as downstream access. They bid for the most lucrative contracts from corporate customers, but have no obligation to deliver the letters. They leave that up to the Royal Mail, dropping it off on our doorstep for final-mile delivery. In other words, our so-called competitors have a peculiar market advantage. They take a cut of the profits, while we do the actual work.
As for modernisation, that is being subsidised by the taxpayer. The government has already loaned the company £1.7bn and is proposing to write off £1bn of that.
Which brings us to the pension deficit, which has already been taken into government hands. Even then it was never as great a problem as has been made out. The deficit currently stands at £9bn but the assets stand at £28bn. That’s three times as much. The deficit only becomes a problem if all Royal Mail workers cash in their pensions immediately, something that is not going to happen.
These are just some of the ways in which the argument for privatisation has been skewed.
Meanwhile, in preparation for the event, the new regulator, Ofcom, has announced a lifting of the cap on how much the company can charge for first-class mail. The public are hardly likely to enjoy that. Nor is this going to increase public affection for the company.
However, here’s the problem. The cost of mail delivery has been way too cheap for way too long. Sixty pence to deliver a first-class letter from the Outer Hebrides to the Scilly Isles: it’s still a bargain by anyone’s reckoning.
Traditionally the profitable parts of the company were used to supplement the unprofitable parts. This is the means by which the Royal Mail has been able to deliver the universal service obligation (USO).
It is the breaking up of the company that has lead to the threat to the USO, one of the reasons Hooper gives for the need for privatisation. (Indeed, his report is called “Saving the Royal Mail’s universal postal service in the digital age”.) The irony here is that the USO might be dropped in order to sweeten any future deal.
Anyone who wants to know what privatisation means for staff only needs to look at the Dutch model, where postal rounds have been franchised out to home workers in a system known as “sort and deliver”. Boxes of mail are dropped on a home-worker’s doorstep, who then has to sort the mail and deliver it on an agreed day. The worker is paid per item, not by the hour.
The trick here is that there is often a gross underestimation of the time it takes to do the work. Casual workers get no sick pay, no holiday pay, no health insurance, no pension and – depending on how long the round takes – often end up being paid below the minimum wage.
All of which is likely to erode that “high level of affection” felt by the public for the Royal Mail.
Read more here.
A Panorama programme on postal junk was compelling, but didn’t mention that the market is skewed against Royal Mail
Junk mail. We all hate it don’t we?
Postal workers probably hate it more than anyone else, as we see more of it than anyone else. You only have a few items a week to deal with, we have hundreds of items a day. Sometimes we have as many as six separate items per household to load into our frames. That could be well in excess of 3,000 items a week. You can’t imagine how tedious this is.
And whereas in the past we were paid separately for it, as a supplement to our wages (which compensated us for it somewhat) these days it is part of our workload; and whereas the general estimate for the number of houses we cover on a daily basis is about 85%, for junk mail it is 100%, meaning it takes longer to deliver than ordinary mail.
Now a Panorama programme has been aired all about junk mail. It seems as if the Royal Mail is addicted to it – at least if you believe Richard Hooper, author of the Hooper report into the future of our postal services.
As he said in the programme: “There is absolutely no question that advertising mail, which the critics describe as junk mail, is central to the viability of the Royal Mail in the 21st century.” As proof of this he gave us some fairly compelling figures: about a quarter of the total letters market, of around £5.4bn, is advertising mail. Or as Tom Heap, the reporter, summarised it: “On the face of it, it seems the best way of ensuring the survival of our beloved postal system is to sign up to as much junk mail as you possibly can.”
Unfortunately, as the programme also pointed out, there are some pretty serious consequences to this, not least in the cost of disposing of the stuff once it comes through our doors, and – almost immediately – is chucked into the bin. Millions of pounds a year is spent by councils around the country, either in recycling the material, or in shovelling it into landfill sites.
It seems we are stuck with junk mail. Or are we?
The problem is that we were not given all the facts. There are a number of issues that Hooper – the acknowledged expert in the field – omitted to inform you about.
Central to this is something known as downstream access (DSA). This is the means by which rival companies are allowed access to the Royal Mail’s delivery network, at a loss to the Royal Mail. According to Royal Mail’s chief executive Moya Greene in December last year, this is in the region of 2.5p for every item of DSA mail we deliver. Some price changes have since been introduced by the regulator and the extent of subsidy and loss since the changes is as yet unclear [see footnote].
Yes, that’s right: we deliver our own rivals’ mail for them, and then we take a loss on it. By law. Or, to put it another way: we postal workers, and you members of the public, are made to pay so that rival companies to the Royal Mail can make a nice profit. This is what Hooper refers to as “modernisation”. It is the real drain on the Royal Mail’s revenues, and the reason why it is now so dependent on junk mail to survive. Sometimes we are made to deliver our own competitors’ junk mail.
It is achieved through a process known as headroom. What this means is that the price the Royal Mail is allowed to charge for bulk mail delivery – the bills and statements sent out by banks and utility companies, which is the prime source of all revenue in the letters market – always has to allow headroom for its rivals to make a profit.
Without this artificial skewing of the market – in the name of the so-called “free market” – the company would not be anywhere near as dependent on junk mail for its future survival.
Actually, the Panorama programme was effectively two stories in one. Only the first part was about junk mail, the second part was about scam mail. What the programme failed to come up with was a solution to this particular problem, but I can provide that: allow postal workers to identify scam mail and to report it, and then allow the Royal Mail the legal means to stop it at its source.
There’s one old lady on my round who has been receiving scam mail. Day after day she gets a pile of letters from someone who is described on the envelope as “the world’s most trusted psychic”. The envelopes are always the same, but the return addresses are from all over the world. Sometimes I’m delivering 10 or 15 of these letters a day. I reported it to my manager and asked if we could stop delivering them, but he told me we couldn’t. It is paid-for mail and we are obliged to deliver it.
This is a perfect example of what I have been suggesting over and over again: the company should learn to trust its own workers. Because unlike the high-tech machines which are being introduced in the much heralded modernisation programme, us postal workers actually know our customers. We can tell the difference between scam mail and real mail. We know who is vulnerable and who is not, and we can alert our managers when a vulnerable person is being targeted.
I’m certain that every postal worker would recognise this material. If there was a system by which we could report it, and a legal means of stopping it, we could get rid of it overnight.
• This footnote was appended on 7 July 2011. TNT contacted the Guardian after publication of the piece to say the reference to the DSA agreement is not applicable in the context mentioned. “In fact there has been a 22 percent price increase in charges by Royal Mail this year alone which renders this argument obsolete”, a company representative said.
From the Guardian Comment is free
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New sorting machines have taken the last skill from our job and pushed back delivery times. More change, not for the better
From the Guardian, Comment is free. Read more here.
I can’t speak for anyone else, but I didn’t go on strike for money last year. I went on strike for quality: for the quality of our jobs and the quality of the service. It was the quality of service I was as concerned about as much as anything to do with money.
I was talking to one of my mates at work yesterday. I asked him if he’d read the agreement?
“There’s no point,” he said, “I’m not in the union so I can’t vote on it anyway.”
That seemed like a strange point of view to me.
“But it will affect your job for the next few years. Aren’t you interested to find out what it says?”
“No Roy,” he said, in a voice resonant with resignation and defeat, “I’ve been in the job for thirteen years now, and what I’ve found is that the management always gets what it wants.”
That seems like a loser’s attitude to me. The management always gets what it wants. Even when they are wholly wrong, we just have to accept it. It is the way of the world. If we all thought like that then nothing would ever change and we might as well roll over and die right now for all the good that breathing would do.
And then my friend said, “In the end there’s only eight hours in a day. They can’t make us work more than that.”
This is true. But they can make us work harder in those eight hours. They can make us carry more weight. They can make us break our backs with the sheer volume of mail we are obliged to carry. They can make us work till four o’clock on a Saturday, heaving out shit-loads of junk mail to households that hate us for it. They can turn our lives upside down with all of their ludicrous innovations. They can have us leaping through hoops to satisfy arbitrary management requirements which serve no other purpose than to undermine our self-esteem.
This is the thing I most dislike about this agreement. It opens the door to all of that. Longer spans. More junk mail. Later starts. Late Saturdays. A poorer service all round.
And in the end, whose interest is all of this serving? Take those late starts. What’s that for exactly? It’s so they can run their Walk Sequencing Machines to automate the job. But – hang on – aren’t Walk Sequencing Machines meant to make the job more efficient? So how come they can’t run to time then? Why do we have to start late in order to serve them? Why can’t they start early in order to serve us?
There’s the question. And the answer is – I very strongly suspect – that we are starting later in order to serve the interests of the private mail companies. It’s a strange kind of business indeed that inconveniences it’s own work force and it’s own customers in the interests of its rivals, but I’m certain that that is what is going on.
This is the point that keeps coming back to me again and again and again. We are constantly being bombarded with this propaganda about the diminishing market, when we all know, by the sheer weight we are lugging about every day, that the market is growing. There’s plenty of cash flowing about in the postal trade. What they mean is a diminishing share of the market, because the private mail companies are eating into our profit base, but without adding anything of value. We still do most of the work.
So what really puzzles me is why the union isn’t doing something about this?
There would be no need to talk about growing the market by loading our poor unsuspecting customers with yet more unwanted junk, if only the Royal Mail was being properly paid for what it does. There would be no need for later start times if we weren’t having to wait for the private mail companies to get the mail to us first, adding one more unnecessary link to the chain.
If the union told us to stop delivering Downstream Access (DSA) mail, we could kill it off instantly.
The union’s official policy is for an end to DSA mail and a return to the Royal Mail monopoly. But where are the campaign leaflets to go with this policy? Where’s the strategy? Is there a plan of action? Are the membership being informed? Do we know what steps we are going to take in order to overturn this unbalanced relationship? And, while Dave and Billy are presenting their all-singing, all-dancing never-ending musical road-show around the country, why aren’t they mentioning the one issue that could actually make a difference to all of us?
Why aren’t they telling us what they propose to do about DSA?
As I say: I didn’t go on strike for money. Money isn’t the most important issue here. What concerns me is what the job will be like in two, three, five years time, and what sort of an industry we bequeath to our kids.
Automation doesn’t worry me either. Bring it on, I say. Let’s have all that walk-sequenced mail flowing in so we can throw it off in half the time. Except that no one is expecting us to be able to do that. The estimate is that walk-sequencing will save about seven minutes a round. And meanwhile, in the real growth market, the relentless rise of on-line shopping, walk-sequencing machines are all but useless. The best way of sorting oddly shaped and uneven packets is still by hand. And until they’ve invented robots that can read the mail and rails that lead to everyone’s front door, they will always need people to deliver the mail on foot. The postal market is a growing market – or at least a steady market – and there will always be space for people within it.
It’s a question of how we fill that space: as donkeys, or as thinking human beings.
So what do you think is the real reason behind the “modernising” agenda. I put the word in inverted commas because I remain sceptical about the use of the word in current management-speak.
There’s an old-fashioned economic theory known as The Labour Theory of Value. It isn’t taught much any more. Marxists will know of it, but it isn’t only a Marxist concept. John Stuart Mill used it. Ricardo used it. It dates back to the thirteenth century. It was the traditional measure by which value was estimated.
I have all of the following from Michael Hudson, who I highly recommend as someone who makes economic theory understandable again.
The principle concern in Classical economic theory was the question of value. Where does it come from? And then it asks another question: what’s the difference between the hide of a cow and a pair of shoes? (In modern terms, what’s the difference between a pile of sand and a silicone chip?) The hide is worth less than the shoes. (The sand is worth less than the chip.) And what makes the difference? It is labour. It is the value of the labour that has gone into the making of the product, both the direct labour, and the accumulated labour in terms of education and training, which is why skilled work is worth more than unskilled work. More labour has gone into it.
And traditionally, Classical economics drew a line between earned income, and unearned income. Earned income came from adding your labour to a product to create value. That is the real economy. Unearned income is things like rents, interest, stocks and shares, land value and real estate. Unearned income is money that can be earned while twiddling your thumbs or goosing the maid. You don’t need to work to get it.
Classical economics therefore proposed taxing unearned income in order to benefit society as a whole. It is what Adam Smith meant when he talked about the free market. The free market did not become free until the burden of unearned income had been lifted from the economy by taxation: the exact opposite of current free market thinking. It was what the Labour Party was created to do. That was what was meant by the redistribution of wealth: redistribution from those who lived off unearned income to those who earned their income by work, by labour.
You can see why it’s not taught any more can’t you? Because it questions the very basis of the world we inhabit, where unearned income lords it over earned income, and we have all become serfs to the profit motive.
This is the real reason behind the euphemistic term “modernisation”. Modernisation means privatisation. What they actually mean is the right of the agencies of unearned income who now rule the world to extract private profit from every form of human endeavour: and that includes the postal market.
The postal market is not being privatised in the interests of efficiency, but in the interests of the corporations that already control most of our lives.
This, of course, is the world we live in, and I guess the union think that they are just being realistic by making compromises with it in order to survive. But here are some of the things I don’t understand. So, for instance, we are now being told that the Royal Mail were going to abolish the piece rate for door-to-door anyway, so we should consider the door-to-door supplement as a bonus.
Can you imagine what would have happened if Royal Mail had unilaterally got rid of door-to-door payments and attempted to force them into our workload without union consent? We’d have simply refused. They would have had a rebellion on their hands. They could never have got away with it.
In other words, what the union have done here is to offer the management a gift of the door-to-door payments. They’ve handed it to them on a plate.
But I wouldn’t even mind taking a pay cut if I thought this agreement was in the best interests of the work force. The trouble is there is so much in the agreement which is not.
The six-day work plan, the revision of hours, the later start times, the longer Saturdays, all of this adds up to a sell out. It’s not like we’ve given one thing in order to get something better back. It all stinks.
Take the issue of productivity, for example.
As it says in the agreement:
“We want to bring everybody’s actual performance up to the level of the top 10% performance…”
I think this is what concerns me the most.
I know I couldn’t possibly go any faster. I’m a middle-aged man and the job already knackers me out. I’m sure I’m not the only one who feels this. I know how fast the top 10% can go. I’ve worked with them, and it’s just not possible for me to go that fast.
My friend the Minister of Cucumber on Royal Mail Chat made an interesting observation about this. Why were we allowed job and knock for a period? It’s obvious now: it upped the work-rate. People started working faster so they could get home earlier. But now that work-rate, which we used to do voluntarily for ourselves, is expected of us as part of the job.
They upped the speed of Pegasus to match it, and are upping the length of our walks to reflect the greater amounts of work we are expected to do.
The agreement continues this process. Longer walks, more junk mail, longer delivery spans. It’s all a way of increasing productivity so they can siphon the profit off to the private sector.
Meanwhile the agreement assigns the role of management enforcer and collective cheerleader to the CWU.
Listen to these passages if you don’t believe me:
“Both Royal Mail and the CWU recognise that successful change needs full and meaningful involvement of all key parties. It is therefore critical that both local management and the CWU are positively and actively involved in the revisions process.”
That means they’ll decide for us what the work plan will be.
After that there will be “joint training on the relevant parts of this agreement” – that means propaganda – “CWU reps being able to play an active role in Work Time Listening and Learning (WTLL) sessions” – that means they will be expected to pass the propaganda on to us.
God help us! Our weekly WTLL propaganda sessions are dull enough as it is, without having to listen to yet more platitudinous commentary by people who have been brainwashed into management ways of thinking.
It’s all very well for the union and the management to want to improve industrial relations so we can get on with the job of delivering the mail, but this agreement just looks like the CWU are getting into bed with management.
Let’s hope they will be very happy together.
Read more by Roy Mayall
- Roy Mayall | guardian.co.uk
Roy Mayall is a pseudonym for a postal worker who has been in the job for about five years and works in a delivery office somewhere in the south-east of England. He writes a blog at roymayall.wordpress.com
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Dear Granny Smith: A Letter from Your Postman: Amazon.co.uk: Roy Mayall: Books
From the Guardian.
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Royal Mail’s deal with the CWU is not just bad for postal workers – it will leave our postboxes stuffed with junk mail.
From the Guardian.
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