Royal Mail has lost a "critical" £8m contract to collect second class mail from online retailer Amazon.
The group blamed higher costs caused by their "failure to modernise operations" for the loss of business.
The blow comes as Royal Mail staff prepare to strike for the first time since 1996. They are demanding a better pay settlement than the 2.5% offered.
Earlier this year, the postal service was ditched by the Department for Work and Pensions in favour of UK Mail. Royal Mail will continue to make Amazon's first class deliveries in the UK. http://news.bbc.co.uk/1/hi/business/6768983.stm