Competition could soften Britons' hatred for Royal Mail

LONDON -- It seems that nearly everyone in Britain has a horror story to tell about the country's beleaguered postal service, the Royal Mail.

The inhabitants of the British territory Ascension Island, for instance, did not receive holiday packages in December because they had been delivered to Asunción, the capital of Paraguay.

``I would say a significant amount of my post doesn't arrive -- bank statements, holiday presents, junk mail," said Tim Frost, 26, a financial services worker in London whose mother now sends his girlfriend two birthday cards, hoping that one will reach her.

Stories about Royal Mail no longer surprise him, though; he said ``everyone knows how awful they are."

Bashing Royal Mail has become something of a sport in Britain, with such websites as Hellmail.co.uk springing up to organize the resentment.

Stephen Tall, an Oxford councilman who has a section on his website dedicated to complaints about Royal Mail, said that he's received correspondence from as far as Wales and Northern Ireland.

But change is afoot, as the postal service is being pushed and pulled into the world of competition.

As a consequence, Tall said, ``people's expectations are going up."

On Jan. 1, the government ended Royal Mail's 350-year monopoly on mail delivery in Britain, allowing private companies to compete for delivery contracts.

Last month, new delivery trucks adorned with different colors and logos began to contend with Royal Mail's signature red.

Like other state-owned industries before it, Royal Mail is experiencing the growing pains of modernization.

But as the company tries to cut costs, it is struggling with the dilemma of how to be competitive while still fulfilling its traditional role of serving the farthest-flung villages, whose post offices it keeps open with a $300 million yearly subsidy.

The government seems confused about Royal Mail's future.

Many of the problems lay with Post Office Ltd., the subsection of Royal Mail that runs the national network of post offices.

In the past year, the government has discontinued a handful of profitable services traditionally offered through post offices.

The services include the distribution of government benefits and pensions, and the renewal of car and television licenses (in Britain, it is required to have a license to watch television to help pay for the BBC).

In Parliament, discussions about Royal Mail have evolved into a debate about the future of rural Britain, with politicians portraying post office closures as the downfall of traditional Britain, and of Royal Mail as something as British as Big Ben or a cup of tea.

``The government wants Royal Mail to act like a commercial service," said Colin Baker, secretary general of the National Federation of Sub-Postmasters. ``But when a post office closes, the heart of a village dies and the village starts to die."

Some post offices are looking for different ways to stay in business, including, in one town, offering a rotating postal service in a local pub. Most post offices now exchange currency and offer travel and car insurance.

But since 2003, nearly 3,000 post offices have closed. According to Postwatch, a consumer watchdog, about 90 percent of post offices would close without government subsidies.

``The whole network is under considerable strain," said Jim Forsyth, a Postwatch spokesman.

The post office system is not the only segment of Royal Mail facing problems.

In June, Royal Mail was fined $18.3 million for failing to adequately protect the mail in its care.

A spokesman said the fine was levied when Postcomm, the independent regulator for the postal services, found the organization was poorly managing the recruitment of temporary staff, which led to some mail being stolen or misdelivered.

Hardly a month goes by without newspaper stories about troubled postal workers who, for a variety of reasons, decided to stop delivering mail and kept it until customers got suspicious. One postal worker jailed in March had accumulated 7 1/2 tons of undelivered mail over six years; investigators could barely open the door of her house to remove the mail.

Royal Mail said it is improving: In 2004, it failed to meet all 15 of the targets the postal regulator set; this year, it expects to meet all of them. It is adjusting its policies to become more efficient. On Aug. 21, it introduced a new pricing system that charges senders based on the bulk and size of an item, as well as its weight.

But even with its substantial changes, the fact that Royal Mail is a state-owned company is a handicap.

``We are the most heavily regulated postal service in Europe, and probably in the world," said David Simpson, a Royal Mail spokesman. The postal service in Germany, for example, is required to meet two annual targets.

Still, Simpson said, the organization was going to ``fight to handle every single letter, and be as competitive as we possibly can."

Such people as Frost hope that increased competition will help Royal Mail improve.

Until then, he said he's resigned to losing some of his mail along the way, which is, after all, a quintessentially British experience.

``I'm sick of it, but I'm not about to write them a letter to complain," he said. ``It probably wouldn't get there anyway."