Royal Mail considers delivery charges

The Royal Mail is trying to find savings as it faces competition

The UK's Royal Mail may start charging customers who want to receive their post before 9.30 in the morning.

Its publicly-owned parent company, once the Post Office and now known as Consignia, is also planning to scrap the second daily delivery of post, which still exists in some parts of the UK and delivers about 3 million items every day.

Consignia said it has yet to settle on exactly how much it might charge for early deliveries, despite press reports suggesting a £50 annual fee is on the cards.

But it stressed it was looking at other options as well, such as getting customers to pick up their post on the way to work rather than having it delivered, or redirecting mail, if asked to do so by e-mail.

Unaccustomed competition

Part of the reason for the planned shake-up is that Consignia is facing competition in letter delivery for the first time.

Services firm Hays is already delivering some business post in some parts of London, Edinburgh and Manchester.

And on Tuesday express delivery firm Business Post received a trial licence to pick up business mail from customers in a number of major urban areas and take it to the Royal Mail for sorting and delivery.

The licence runs for one year from April 2002.

Slipping services

The new complications have been compounded by industrial unrest at Consignia, in advance of a planned £1.2bn cost-cutting drive which could see 15,000 of its 160,000 staff get the axe.

Unions have accused managers of being dictatorial and management in turn says the workforce is stuck in the past.

The organisation is missing its targets, too.

The government's regulator, Postcomm, set a yardstick of 92.1% of first-class post arriving within one working day, but Consignia managed only 75-86%.

And after years of surpluses, the organisation slumped to a loss this year of £3m, compared with a £550m profit last year.

In the City, shares in Business Post rose 11% in morning trade before slipping back close at 356.5p, up 16.5p or 4.8%.