Page last updated at 22:49 GMT, Wednesday, 21 October 2009 23:49 UK

Royal Mail's one-man competitor


Ken Holder from City Cycle Couriers on how his business has been boosted by fears of a postal strike

By Will Smale
Business reporter, BBC News, Plymouth

As biblical levels of rain pour down on Plymouth's streets, Ken Holder still manages to have a smile on his soaked face as he cycles though the deluge with a heavy rucksack of post on his back.

He's been working since 7.30 in the morning, and won't stop until 7.30 at night, riding up and down the Devon city's notoriously steep roads collecting and delivering mail.

And while Royal Mail workers are beginning a two-day nationwide strike, Mr Holder, 39, will definitely still be working.

This is because Mr Holder is one of Royal Mail's 29 competitors, and with just one member of staff - himself - he is its smallest rival.

There is only one problem for firms or individuals thinking of switching from the Royal Mail to his services - his company, City Centre Couriers, currently only collects and delivers across three Plymouth postcodes.

Ken Holder of City Cycle Couriers
I am shattered at the end of the week - I'm cycling 250 miles each five days, and burning 15,000 calories more than a normal person
Ken Holder, City Centre Couriers

In business as a courier since September of last year, Mr Holder has been in competition with the Royal Mail since March, when he was awarded a licence by postal service regulator Postcomm.

The way this works is that anyone can set themselves up as a courier firm to deliver parcels, but if you wish to deliver standard letters - those weighing 350 grams or less - you need a postal licence from Postcomm.

Armed with his licence, Mr Holder now collects, sorts and delivers 200 letters per day on average, compared with the Royal Mail's 95 million items.

But while Mr Holder is currently not likely to be giving Royal Mail bosses sleepless nights, he does have plans to grow the business.

'Word of mouth'

"Applying for a licence was surprisingly easy," he says. "The application fee was only £50, and it didn't take much longer than a month.

Ken Holder with a pile of mail
Any firm that wishes to deliver letters needs a licence

"The licence is UK-wide, but as the business is essentially just me and my bike, I don't have the legs - or the time - to deliver outside of Plymouth."

Mr Holder now collects and delivers the local mail for 12 companies in Plymouth, ranging from solicitors to estate and travel agents, and a roofing firm.

For standard-sized letters he charges 32 pence for guaranteed next day delivery, which compares with 39p for a first class stamp with the Royal Mail.

"Business is growing slowly through word of mouth," he says. "And enquiries have certainly grown in recent weeks as more and more companies are concerned about the Royal Mail strike action."

Plymouth-based solicitors Foot Anstey is one of Mr Holder's customers.

'Very disruptive'

Julian Summerhayes, an associate at the firm, said the impact of past Royal Mail strikes had made the firm keen to find a replacement for local deliveries.

Full-time staff - One
Transport equipment - Bike
Turnover - £60 to £70 per day

"As solicitors we still have a great many documents that can't be sent out electronically - deeds, wills and the like," he says.

"The impact of a Royal Mail strike is always very disruptive for us, so having an alternative service in place does offer considerable peace of mind."

121,000 frontline postal staff
Transport equipment - More than 30,000 lorries, vans and other motorised vehicles, 33,000 bicycles
Annual turnover last year of £6.7bn at its main letters and packages business, profit of £58m

One of Mr Holder's other customers, estate agents Plymouth Homes, puts forward a similar argument.

"How can I say this? The Royal Mail hasn't always been constantly good," says director Susan Tamblyn.

"We have letters such as invoices that we definitely want to see delivered, and Ken gives us that guarantee."

Expansion plans

Another cycle courier business that recently obtained a licence to deliver letters is Coventry-based Yellow Jersey Delivery.

With two full-time members of staff it is twice as big as Mr Holder's City Centre Couriers, but also only operates in a limited geographical area - six postcodes in Coventry.

"We have only had our mail licence for a couple of months," says Yellow Jersey director Jonathan Prime.

"We are now delivering approximately 1,000 letters a week, and use about three or four extra workers on a part-time basis.

"We've certainly had a lot more inquiries in recent weeks. I wouldn't say people are unduly concerned about Royal Mail strike action, but they are certainly exploring alternative services."

The picture is the same at another bicycle-based postal delivery firm, Birmingham-based Cycle 4 U, which has had its post licence for six months, and has five full-time workers.

"Inquiries have doubled this week thanks to the threat of the postal strike," says owner Stephen Young. "We are the busiest we have ever been, and are thinking of expanding outside of Birmingham to Wolverhampton and Walsall."

Meanwhile, a spokeswoman for Postcomm says it has seen a slight increase in licence inquiries in recent weeks.

Environmentally friendly

Back in Plymouth, Mr Holder admits he does get tired.

"It's a great job for me, as I have always been an avid cyclist, but I am shattered at the end of the week - I'm cycling 250 miles each five days, and burning 15,000 calories more than a normal person," he says.

"The bonus is that I can eat pretty much what I want."

To help ease the workload, Mr Holder now employs a student one afternoon a week to help with the collections, and his longer term plan is to consider franchising the business in other cities.

"Some people have told me I should buy a van, but I think a large part of the attraction for customers is that it is just me and my bike - it's as environmentally friendly as possible.

"I'm currently earning between £60 and £70 per day, which isn't a lot, but it is still early days.

"There is the odd day I question my sanity, but I really believe the business has a lot of potential, especially as more firms explore alternatives to the Royal Mail."

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