Royal Mail has warned that rivals could ‘cherry-pick’ the most profitable delivery routes after TNT Post UK launched its long-anticipated end-to-end delivery trial in West London.
Plans to expand the trials from Liverpool to London were first revealed in January by TNT Post boss Nick Wells, who said: “We will be extending our plans this year. It will not be long before you see orange postmen on the streets.”
But Royal Mail claims the potential loss of business poses a “significant risk” to the Universal Service.
Royal Mail currently provides about 99% of final mile deliveries, even though 40% of UK letters and 70% of bulk mail are collected and processed by private sector competitors.
TNT Post UK has been seeking to challenge the current near-monopoly on full end-to-end delivery since running a trial in Liverpool in 2009, and this week launched a second trial, this time in London.
The company still believes Royal Mail’s VAT exemptions on postal services pose a barrier to a rival running a full end-to-end service, and has been lobbying the EU to scrap the subsidy.
Royal Mail has described the West London trial as “modest”, but said the service could be replicated in other highly populated areas to leave Royal Mail with only unprofitable areas.
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