This week saw the first evidence session in the Business, Innovation and Skills Committee’s inquiry into competition in the post and parcel sector take place.

The session mainly focused on the level of competition that Royal Mail is facing and what impact this might have on the universal service it is required to provide.

The Hub decided to take a closer look at some of the evidence provided to the committee by some of the major players in the industry.

Whistl

In its submission, Whistl (formerly TNT Post) defended its growing final-mile delivery service, which is currently in place in Liverpool, Greater Manchester and some areas of London. Royal Mail earlier this year warned that it was threatening the prospects of its own delivery service.

Whistl responded to Royal Mail’s allegations of ‘cherry picking’ the areas it delivers in, stating that “between 2004 and 2011, [Royal Mail] developed an extremely sophisticated and demanding pricing structure, which requires those competitors who are active in urban areas to pay a price which reflects Royal Mail’s increased costs of delivery elsewhere”.

Whistl said if competition in the sector was reduced then consumers would be at risk of significant price increases.

“Government should send a clear signal that the United Kingdom is open for investment, innovation and job creation and that the benefits it will bring to consumers, as it has done in many other industries, are to be warmly welcomed,” it added.

UK Mail

The benefits of competition in the sector was also highlighted by UK Mail, which in its evidence submission said competition is a “vital spur to improved choice for mail users”.

It said competition also forces parcel and mail firms to improve the efficiency of their operations, but said Royal Mail needed to do more to achieve its own efficiency targets and secure the provision of its last-mile delivery service.

UK Mail 1

The submission continued: “UKM believes that the development of postal competition has acted as a spur to RM in improving efficiency. It is vital for a healthy RM and in the interests of all postal users that effective competition is allowed to continue to provide commercial challenges to RM.”

Amazon

Online retail giant Amazon, which Royal Mail recognised as potential threat to its business if its own logistics network continues to grow, also provided written evidence to the inquiry. Itsaid that it relied on other carriers to make deliveries for its recently launched logistics network- including Royal Mail.

“Amazon Logistics complements our relationships with larger, established delivery partners; in total, we now work with more than 30 carrier partners across the UK," it said.

Royal Mail

Royal Mail argued that government and regulatory intervention is needed if its 'universal service' is to remain.

Its submission document said: "If the market were left to its own devices, it would focus only on areas where volumes and profits were high, particularly in the light of the decline in letters and the growth of electronic communications.

"Regulatory approaches should seek to safeguard the Universal Service against these financially undermining arbitrage opportunities, not promote them," it continued.

It also called for, among other things, an industry standard for the parcels market to be developed. It requested that this include a rigorous vetting process for staff; proof of safe delivery to door or neighbour as standard; proof of paying a living wage; and publishing clear compensation guidelines.