Royal Mail pushed against the ropes by private mail companies

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Royal Mail has approached Postcomm, the mail service regulator, asking to increase the price of both first and second class stamps by 6p to stem its growing losses.

In an interview with the ‘Financial Times’, Adam Crozier, chief executive of Royal Mail blamed private companies for “creamskimming” the profitable bulk business mail and said that the company needed to make changes to remain viable.

It is also asking to renegotiate its UK service obligation contract which outlines its coverage requirements.

At present the Royal Mail is losing around 6p on each stamped letter it delivers, and is facing increasing competition in the market.

Royal Mail’s pension problems have been well recorded in the media, after the government bailed it out with a multi-billion pound support package to help deal with its pensions deficit.

Crozier said: “The best solution to the massive pressures building up against Royal Mail is for Postcomm to focus the Universal Service on stamped mail to ensure its future for everyone while lifting regulatory constraints on Royal Mail to allow it to compete fairly for business mail.”

“We need to be able to compete freely and fairly in the business mail market. The current arrangements do not allow that.”

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