Postal strikes leaves small firms out of pocket

| October 23, 2007 | 0 Comments

Many small businesses have been left out of pocket by the recent postal strikes. The postal strikes by Royal Mail staff have resulted in deliveries piling up, orders from customers slowing and payments being delayed.

Many small businesses looked into hiring private couriers to clear the backlog but were found to be expensive. Non-heavy goods would only cost £1 with Royal Mail but courier firms such as TNT would charge approximately £7.

According to the British Chambers of Commerce, approximately 50% of small businesses are now considering using private delivery but the majority say that private couriers such as TNT, Deutsche Post, DHL and Business Post are costly and not interested in winning their business.

According to The Federation of Small Businesses, 94% of small businesses only use Royal Mail. Matthew Knowles, a spokesperson for the company, said private couriers don’t see small businesses as money makers and 69% of businesses use the Royal Mail to send their invoices. Delayed payments can be damaging to a small business.

The British Chambers of Commerce anticipates that it costs companies £2.5 million each time Royal Mail strikes whereas the total cost to London businesses is more than £300 million.

DX is one of the few private couriers that is aimed at small businesses. During the postal strikes, it has gained around £10 million in new business. James Greenbury, Chief Executive, said there is practically no other company serving small businesses. Larger couriers don’t think it’s worth their while.

Mr Greenbury concluded that many businesses don’t want to be affected by the postal strikes again, particularly if the competition is not there to serve them. The regulator needs to focus on this.

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