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Royal Mail loses Amazon contract worth £25m

kippy Avatar
7y, 3m agoPosted 7 years, 3 months ago
Threat to deliveries forces major client to pull plug on £25m deal

Royal Mail has lost a crucial contract with its second largest customer, the online retailer Amazon, as a wave of strikes threaten parcel deliveries in the busy pre-Christmas sales period.

The news comes on the eve of a national strike announcement by the Communication Workers Union that is likely to bring the simmering industrial dispute to the boil and further disrupt deliveries across the country.

CWU members are angry about the Royal Mail's handling of its modernisation programme and are expected to escalate their programme of local strikes in a dispute they say is about consultation over changes to working practices.

But a backlog of undelivered mail has worried customers, particularly small businesses and internet retailers who argue that the unpredictable nature of the strikes has led to a collapse in reliability. The loss of this business will be a severe blow to Royal Mail, which was relying on the growth of online shopping to compensate for the decline of its letters business due to rising email use.

Customers of eBay have already been particularly vociferous, claiming the strikes are causing damage to small businesses that suffer negative feedback and lose their online reliability ratings.

Now the Guardian has learned that Amazon.co.uk has cancelled its long-term contract to use the Royal Mail for parcels over 500 grams and will use a rival service, Home Delivery Network (HDN), which also delivers for Tesco and Argos.

HDN declined to comment directly, citing commercial confidentiality, but the Amazon contract is thought to be worth at least £25m and is one of the first times a major sender of medium-sized parcels has chosen to defect from the Royal Mail in this way. Until now, the state-owned operator has won the bulk of new internet business.

HDN's chief executive, Brian Gaunt, said he expected others to follow suit once the national strike ballot was passed. "We are seeing a number of our customers preparing to start marketing their deliveries as free of Royal Mail risk," he added.

Two years ago Royal Mail lost a smaller Amazon contract worth £8m to deliver second class parcels during the last national strike, but fought hard to win the business back, claiming improved industrial relations. Losing the new, bigger contract will exacerbate the operator's financial woes, which lay behind its need to cut staff, but more worryingly sends a dangerous signal to other suppliers about Amazon's faith in the network during the crisis.

Last night the CWU said it regretted disruption caused by the strikes, but added: "We are very concerned that if we don't get this right now, there will be a lot more disruption to customer services in future." It blames the way private competition has been allowed to "cherry pick" profitable parts of the postal market and fears more damage will be done in future: "The scale of change planned is frightening."

Royal Mail declined to comment.

Even if private sector rivals do step in to take some of the contracts, it is unlikely to prevent major disruption. HDN says it would be unlikely to get enough resources in place at short notice to compensate.

More importantly, there is very little alternative for delivery of letters, with private operators such as TNT and DHL using Royal Mail for crucial parts of their delivery infrastructure.

The last time CWU members called a national strike in 2007, it was solved when Royal Mail managers agreed to series of pay deals and also offered to talk further about consulting the union on changes.

Complaints against Royal Mail

Local strikes have been spreading across the country, largely unreported. This week alone, 24-hour stoppages are scheduled in locations including Bristol, Kilmarnock, London, Carlisle, Coventry, Chelmsford, Leeds, Nottingham, Swindon and Warrington.
There have been reports of mountains of undelivered mail in sorting offices and claims that postal workers are not waiting to see if customers are in before leaving cards asking them to pick parcels up from the sorting office.

The Royal Mail disputes some of the claims, but has used managers to try to shift the backlog, exacerbating tensions. The CWU is not expected to give details of its strike plans, but they are likely to involve rolling action, targeting different parts of the chain on different days, causing maximum disruption without too much loss of pay.

by Dan Roberts
guardian.co.uk
Wednesday 7 October 2009 22.28 BST
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kippy Avatar
7y, 3m agoPosted 7 years, 3 months ago
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#1
cant be good news *sigh.
http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2009/10/7/1254948433668/Amazon-centre-near-Milton-003.jpg
#2
Thank God for that - Royal Mail are ***** & need a good kick up the ****
#3
ChrisUK
Thank God for that - Royal Mail are ***** & need a good kick up the ****


And your option is? :whistling:
banned#4
HDN the company that leaves parcels inside wheelie bins lol
#5
Nitro111;6511763
And your option is? :whistling:


I love em :thumbsup:

They have "lost" (robbin gits) so much of my stuff & take weeks to deliver a simple parcel :x
#6
the union is slowly destroying royal mail ....
#7
What confuses me about strikes is that they are doing it on purpose to lose RM business so they prove how much the company needs its staff but by losing the company money they arent able to pay staff!
#8
ChrisUK
I love em :thumbsup:

They have "lost" (robbin gits) so much of my stuff & take weeks to deliver a simple parcel :x


i find royal mail better than a lot of courier companies :whistling: I have only ever had 2 items go missing with RM but stuff with couriers goes all the time :?
#9
ryouga
What confuses me about strikes is that they are doing it on purpose to lose RM business so they prove how much the company needs its staff but by losing the company money they arent able to pay staff!


exactly .....
#10
ryouga
What confuses me about strikes is that they are doing it on purpose to lose RM business so they prove how much the company needs its staff but by losing the company money they arent able to pay staff!


Most people don't think logically. Just think of earning a few more short-term £££

Also, why would RM want to pay these people more money after losing a massive client? Their route will now be shorter and so will their workload.
#11
ChrisUK
I love em :thumbsup:

They have "lost" (robbin gits) so much of my stuff & take weeks to deliver a simple parcel :x


I understand your frustration, but are we going to give all our major services to the French/German/Spanish? I for one are totalloy against that! :x
I have two sons that would dearly like a job with RM.
#12
I'm still waiting for 3 items i bought from ebay 3 weeks ago all royal mail. I also got a card though my letterbox saying that i was not in and to collect at the office of course i was in i was waiting for the items that i still haven't received what a joke :w00t: sack the lot inc the management and well done hdn and amazon.
#13
Tbh, I would hate it if royal mail went. Thinking back, their success:fault ratio is nearly 10000000:1 in my book. I understand other people have problems but this i feel is because of the change happening to royal mail over the past, i think 5 years.
#14
Nitro111
I understand your frustration, but are we going to give all our major services to the French/German/Spanish? I for one are totalloy against that! :x


and the dutch TNT :whistling:

Tesco's internal mail is done via tnt, that's worth a fair bob, they got rid of RM as the items weren't getting to the stores in time (it's mostly large banners for promotions)
#15
lumoruk
HDN the company that leaves parcels inside wheelie bins lol


Yeah lol, they've also just thrown stuff over my back garden fence before
#16
faevilangel
the union is slowly destroying royal mail ....


Agreed.
Prolonged strike action to something as vital as the royal mail is sickeningly selfish.
lots of people rely on it to trade, and i bet there are several companies that may just go under because of this.

Essentially people arentgoing to stop using Royal mail, it may lose a contract (ala Amazon) etc but the only people that are getting hurt are the customers who pretty much have no other choice but to use it.
#17
Artonox
Tbh, I would hate it if royal mail went. Thinking back, their success:fault ratio is nearly 10000000:1 in my book. I understand other people have problems but this i feel is because of the change happening to royal mail over the past, i think 5 years.


+ 1
#18
faevilangel
the union is slowly destroying royal mail ....


The staff discuss and vote on the situation. The union isn't something other than it's members. The government has been trying to cripple Royal Mail since 1986.
#19
tinkerbell28
That's the thing they are just so blind they cannot see it, they are striking themselves out of jobs and speeding up privatisation this will be the tip of a very large iceberg.

Everyone is facing cutbacks and tighter working conditons they need to get on with it.


people don't realise a lot of small businesses rely on mail by Rm as its a lot cheaper than a courier such as tnt ...
#20
faevilangel
and the dutch TNT :whistling:

Tesco's internal mail is done via tnt, that's worth a fair bob, they got rid of RM as the items weren't getting to the stores in time (it's mostly large banners for promotions)


Sorry, forgot them :thumbsup:
#21
Nitro111
I understand your frustration, but are we going to give all our major services to the French/German/Spanish? I for one are totalloy against that! :x
I have two sons that would dearly like a job with RM.


TBH i couldnt give a toss who deliveres my post as long as it gets here in a timly fashion.. which at the moment it isnt.
#22
cufc90
Yeah lol, they've also just thrown stuff over my back garden fence before


HDN gave a £500 pc I bought to someone else before even told them my name i.e went "are you Mr X X" to which the person of course said yes and then claimed it wasnt their fault.
#23
it's our own fault - cant keep supporting companies and the culture of being charged more for rubbish service.
#24
chalkysoil
The staff discuss and vote on the situation. The union isn't something other than it's members. The government has been trying to cripple Royal Mail since 1986.


No RM has been doing business and trying to streamline it's operations, like merging sorting offices etc. But the union wants more pay, less hours and other crap, which RM won't do so it goes to strikes
#25
Unions will be losing all the jobs for the workers.

Royal mail can afford to lose contracts like that...

Unfortunately they are expensive, and companies like HDL are much more efficient and cost effective. Cheaper drivers, cheaper equipment etc....

No doubt the government will step in and waste more cash on it, but business is business and royal mail staff should have no free meal tickets like most of the rest of us.
banned#26
lumoruk
HDN the company that leaves parcels inside wheelie bins lol


Not anymore.
banned#27
I think all unions should be banned. They are not needed any more imo.
#28
faevilangel
No RM has been doing business and trying to streamline it's operations, like merging sorting offices etc. But the union wants more pay, less hours and other crap, which RM won't do so it goes to strikes


I think job security has something to do with it too. Don't fully understand about the RM situation, but surely at the recession, asking for more pay is the last thing to protest for
#29
Jetpac
Agreed.
Prolonged strike action to something as vital as the royal mail is sickeningly selfish.
lots of people rely on it to trade, and i bet there are several companies that may just go under because of this.

Essentially people arentgoing to stop using Royal mail, it may lose a contract (ala Amazon) etc but the only people that are getting hurt are the customers who pretty much have no other choice but to use it.


I use RM to send any small item as courier for a letter isn't worth it. a lot od businesses rely on RM too.
banned#30
Chiptivo
Unions will be losing all the jobs for the workers.

Royal mail can afford to lose contracts like that...

Unfortunately they are expensive, and companies like HDL are much more efficient and cost effective. Cheaper drivers, cheaper equipment etc....

No doubt the government will step in and waste more cash on it, but business is business and royal mail staff should have no free meal tickets like most of the rest of us.


let capitalism do its job.
#31
kippy
it's our own fault - cant keep supporting companies and the culture of being charged more for rubbish service.


And who supplies youe Gas/Electricity & Mobile Supplies? Perhaps the union should support UK businesses instead of berating them to the extent that they do a (BMW/Delorean) on us! :whistling:
#32
At first i was sympathetic to their cause.
Now i have no sympathy for them, the only people losing out are the customers.
I hope the strikers get sacked. im sure there are plenty of people willing to fill their shoes in these current trying economic times.
#33
bykergrove
I think all unions should be banned. They are not needed any more imo.


they can sort disputes at work, but striking is 80's style and the CWU need to take a look at how the other unions sort the problem

Tinks, i agree they to improve and modernise but how can they when their workers keep striking, and pushing away valuable business
#34
Jetpac
At first i was sympathetic to their cause.
No i have no sympathy for them, the only people losing out are the customers.
I hope the strikers get sacked. im sure there are plenty of people willing to fill their shoes in thes current trying economic times.


I must agree, we really don't need to be taken over by people within our own country!
#35
good on amazon, for making a move like that
#36
Jetpac
At first i was sympathetic to their cause.
No i have no sympathy for them, the only people losing out are the customers.
I hope the strikers get sacked. im sure there are plenty of people willing to fill their shoes in thes current trying economic times.


there is, but cos the workers are part of the union, RM can't sack them without a fight :whistling:
#37
Jetpac
At first i was sympathetic to their cause.
No i have no sympathy for them, the only people losing out are the customers.
I hope the strikers get sacked. im sure there are plenty of people willing to fill their shoes in thes current trying economic times.


Good point, they could easily replace the staff. The workers have really shot themselves in the foot with this one, loosing a big contract like that, things will only get worst
#38
hdizzle
good on amazon, for making a move like that


Sorry, I forgot that Amazon had the U.K economy at heart! A member are you?
#39
faevilangel
there is, but cos the workers are part of the union, RM can't sack them without a fight :whistling:


Exactly... however doesnt make me what them sacked any less!
Its a really selfish move that is hurting mainly the customer and not the company.

They dont deserve a pay increase.
#40
Chidda
Good point, they could easily replace the staff. The workers have really shot themselves in the foot with this one, loosing a big contract like that, things will only get worst


expect more streamlining, jobs cuts and more strikes :whistling:

like we used to have a royal mail sorting office in the next 2 towns, one sent mail north, one sent it south, they closed the one and integrated the 2... 500 job cuts

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