Hays ready to challenge Royal Mail

Click to follow
The Independent Online

Hays, the support services group, has applied to the postal regulator for a licence to deliver mail in parts of London, Manchester and Edinburgh, in direct competition to the Royal Mail.

Hays has previously said that it has applied for three interim licences to PostComm, the new regulator, although the Independent on Sunday can now reveal the crucial details.

PostComm has been deliberating recently over how it will be able to introduce competition into the postal service, while keeping its obligation to deliver a universal service throughout the UK. It is currently encouraging businesses to apply for the temporary licenses, in a trial period where the best method of modernising postal delivery is found.

Consignia, the new name for the Post Office, is the only company to own a licence to deliver mail that costs less than £1 to deliver, through its subsidiary the Royal Mail.

"The service will be in direct competition to the Royal Mail but it will be limited in scope. The regulator wants to see how robust Royal Mail is to direct competition, but on a limited scale so it won't affect the universal service," said David Sibbick, the director of regulatory affairs at Hays' subsidiary that deals with business post.

The postal districts chosen are in central areas with mainly business addresses. Hays will for the first time be able to collect, sort, and deliver the mail within the area.

It will use the existing infrastructure that it currently uses for limited specialist services, such as the exchange of documents between the law, travel and insurance industries. Any mail that needs to be sent out of Hays' postal district will be handed on to the Royal Mail.

In addition to the inner-city licence, Hays has applied for a separate licence to offer limited postal services to businesses nationally. A company will be able to contract Hays to deal with its mail collection and sorting for a certain price, then Hays will find the most efficient way to deliver the mail through Royal Mail's service.

"We want to try to give business as many cost-effective and reliable ways of delivering mail as we can," said Mr Sibbick.

The third licence is a highly specialised service that the company is keeping close to its chest to keep itself ahead of its competitors.